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EXHIBIT 4(C)
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FRUIT OF THE LOOM, INC.
and
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
Rights Agreement
Dated as of March 8, 1996
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TABLE OF CONTENTS
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3. Issuance of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . 10
Section 8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9. Availability of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 10. Preferred Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights . . . . . . . . . . . . . 14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . 22
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 17. Rights Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 27
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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Exhibit A - Form of Certificate of Designations of Series A Junior
Participating Preferred Stock of FRUIT OF THE LOOM, INC. . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Series A Rights Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
Exhibit C - Form of Series B Rights Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
Exhibit D - Summary of Rights to Purchase Preferred Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
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RIGHTS AGREEMENT
Agreement, dated as of March 8, 1996, between FRUIT OF THE LOOM, INC.,
a Delaware corporation (the "Company"), and CHEMICAL MELLON SHAREHOLDER
SERVICES, L.L.C., a New York limited liability company (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Series A Right") for each
Common Share (as hereinafter defined) of the Company outstanding on March 22,
1996 (the "Record Date"), each Series A Right representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter defined), upon
the terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Series A Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined). The Series A Rights and the
terms hereof obligate the Company to issue Series B Rights (as hereinafter
defined) and other securities to holders of valid Series A Rights under certain
circumstances.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Common Shares of the
Company then outstanding, but shall not include (i) the Company, (ii)
any Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit plan of the Company or any Subsidiary of
the Company, (iv) any entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan, or (v) any
"Xxxxxx Affiliate" (which shall have the same meaning in this
Agreement as provided in the Company's Restated Certificate of
Incorporation). Notwithstanding the foregoing, no Person shall become
an "Acquiring Person" as the result of (a) an acquisition of Common
Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the
Company then outstanding or (b) the acquisition by such Person of
newly issued Common Shares directly from the Company (it being
understood that a purchase from an underwriter or other intermediary
is not directly from the Company); provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of the Common Shares
of the Company then outstanding by reason of share purchases by the
Company or the receipt of newly-issued Common Shares directly from the
Company and shall, after such share purchases or direct issuance by
the Company, become the Beneficial Owner of any additional Common
Shares of the Company, then
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such Person shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be
an "Acquiring Person", as defined pursuant to the foregoing provisions
of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an Acquiring Person, as
defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement. The term "Incumbent Board of
Directors" shall mean those individuals who, as of the date hereof,
constitute the Board.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has (A) the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (x) securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (y) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering
Event or (z) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event which Rights
were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the "Original
Rights") or, with respect to Series B Rights, pursuant to the
exercise or exchange of valid Series A Rights under Section
11(a)(ii) or Section 24(b) hereof; or (B) the sole or shared
right to vote or dispose pursuant to any agreement,
arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement
or understanding to vote such security (1) arises solely from
a revocable proxy or consent given to such Person in response
to a public proxy or consent solicitation
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made pursuant to, and in accordance with, the applicable rules
and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange
Act (or any comparable or successor report); or (C) has
"beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange
Act); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding, whether written or oral (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities), for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used
with reference to a Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in Illinois
are authorized or obligated by law or executive order to close.
(e) "Class A Shares" when used with reference to the
Company, shall mean shares of Class A Common Stock, $.01 par value, of
the Company, but when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) of such
other 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.
(f) "Class B Shares" shall mean shares of Class B Common
Stock, $.01 par value, of the Company.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Chicago, Illinois time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Chicago,
Illinois time, on the next succeeding Business Day.
(h) "Common Shares" when used with reference to the
Company shall mean the Class A Shares and Class B Shares, taken
together. "Common Shares" when used with reference to any Person
other than the Company shall mean the capital stock (or equity
interest) of such other Person with the greatest voting power, or the
equity
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securities or other equity interest having power to control or direct
the management of such Person.
(i) "Continuing Director" shall mean (i) any member of the
Board of Directors of the Company, while such Person is a member of
the Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an Acquiring
Person or of any such Affiliate or Associate, and was a member of the
Board prior to the date of this Agreement, or (ii) any Person who
subsequently becomes a member of the Board, while such Person is a
member of the Board, who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing Directors.
(j) "Distribution Date" shall have the meaning set forth
in Section 3 hereof.
(k) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(l) "Final Expiration Date" shall have the meaning set
forth in Section 7 hereof.
(m) "Person" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(n) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, par value $.01 per share, of the
Company having the rights and preferences set forth in the Form of
Certificate of Designations attached to this Agreement as Exhibit A.
(o) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(p) "Rights," unless otherwise expressly provided, shall
mean both the Series A Rights and Series B Rights.
(q) "Section 11(a)(ii) Event" shall mean an event
described in Section 11(a)(ii) hereof.
(r) "Series B Rights" shall mean the Rights evidenced by a
Certificate in the form of Exhibit B attached hereto which the Company
is obligated to issue upon the occurrence of a Section 11(a)(ii) Event
or any of the events described in Section 24(a) hereof.
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(s) "Shares Acquisition Date" shall mean the first date of
public announcement (which for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act, by the Company or an Acquiring Person that an
Acquiring Person has become such.
(t) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
(u) "Triggering Event" shall mean a Section 11(a)(ii)
Event or an event described in Section 13(a) hereof.
Whenever a determination of the percentage of outstanding shares held
by a Person or any other fact or circumstance is required for purposes of
deciding whether a Person or entity is or is not one of the items defined in
this Section 1, the decision of the Company's Board of Directors regarding such
fact or circumstance shall be final and binding upon the Company, the Rights
Agent, and all other Persons. The Company reserves the right to require, or
cause the Rights Agent to require, that Persons prove that Rights held by them
remain valid.
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 (who, with respect to the Series A Rights, in accordance with
Section 3 hereof, shall prior to the Distribution Date, also be the holders of
the Common Shares) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such co-Rights Agents as it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth day after the Shares Acquisition Date or (ii) the Close of
Business on the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, a Xxxxxx
Affiliate, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company, a
Xxxxxx Affiliate, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) to commence, a tender or
exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 15% or more
of the then outstanding Common Shares (including any such date which
is after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Series A
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Rights will be evidenced (subject to the provisions of Section 3(b)
hereof) by the Certificates for Common Shares registered in the names
of the holders thereof (which Certificates shall also be deemed to be
Series A Rights Certificates) and not by separate Series A Rights
Certificates, (y) the right to receive Series A Rights Certificates
will be transferable only in connection with the transfer of Common
Shares and (z) each transfer of Common Shares (including a transfer to
the Company) shall constitute a transfer of the Series A Rights
associated with such Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Shares
as of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company, a Series A Rights
Certificate, in substantially the form of Exhibit B hereto (a "Series
A Rights Certificate"), evidencing one Series A Right for each Common
Share so held. As of the Distribution Date, the Series A Rights will
be evidenced solely by such Series A Rights Certificates. Under the
circumstances described in Sections 11(a)(ii) and 24 hereof, the
holders of valid Series A Rights certificates will be entitled to
receive Series B Rights Certificates from the Company, and
accordingly, in that sense, so long as the Series A Rights
Certificates are evidenced by certificates for Common Shares of the
Company, the Series B Rights will be evidenced by Certificates
evidencing ownership of Common Shares (including a transfer to the
Company) and shall be transferred with, and transferable only by, a
transfer of Common Shares (including a transfer to the Company). As
soon as practicable after (x) an exercise of Series A Rights after the
occurrence of a Section 11(a)(ii) Event or (y) an event described in
Section 24 hereof, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Shares
as of the Close of Business on the Distribution Date, at the address
of such holder shown on the records of the Company, a Series B Rights
Certificate, in substantially the form of Exhibit C hereto (a "Series
B Rights Certificate"), evidencing Series B Rights issuable under such
circumstances as provided herein. As of such date, the Series B
Rights will be evidenced solely by such Series B Rights Certificate.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to
Purchase Preferred Shares, in substantially the form of Exhibit D
hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such Certificates registered in the
names of the holders thereof together with a copy of the Summary of
Rights attached thereto. Until the Distribution Date (or the earlier
of the Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights
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attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common Shares
referred to in the last sentence of this paragraph (c)) after the
Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
This Certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
FRUIT OF THE LOOM, INC. and CHEMICAL MELLON SHAREHOLDER
SERVICES, L.L.C. dated as of March 8, 1996 (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 FRUIT OF THE LOOM, INC. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate Certificates and will no
longer be evidenced by this Certificate. FRUIT OF THE LOOM,
INC. will mail to the holder of this Certificate a copy of the
Rights Agreement without charge after receipt of a written
request therefor. As described in the Rights Agreement,
Rights issued to any Person who becomes an Acquiring Person or
any Associate or Affiliate thereof (all as defined in the
Rights Agreement) shall become null and void.
With respect to such Certificates containing the foregoing legend,
until the Distribution Date, the Series A Rights associated with the
Common Shares represented by such Certificates shall be evidenced by
such Certificates alone, and the surrender for transfer of any such
Certificate shall also constitute the transfer of the Series A Rights
associated with the Common Shares represented thereby. In the event
that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) The Series A Rights Certificates and Series B Rights
Certificates (collectively the "Rights Certificates"), and the forms
of election to purchase and of assignment to be printed on the reverse
thereof, shall be substantially the same as Exhibit B and Exhibit C
hereto, respectively, and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may
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be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the terms, provisions and
restrictions elsewhere herein, the Rights Certificates shall entitle
the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by:
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or
understanding, whether written or oral, regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company
has determined in good faith is part of a plan, arrangement or
understanding, whether written or oral, which has as a primary purpose
or effect avoidance of the second paragraph of Section 11(a)(ii)
hereof, and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
11(a)(ii) of such Agreement.
The provisions of the second paragraph of Section 11(a)(ii) shall
apply whether or not any rights Certificate actually contains the foregoing
Legend.
Section 5. Countersignature and Registration. The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
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facsimile signature. The Rights Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect as
though the Person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificate may be signed on behalf of
the Company by any Person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office, books for registration and transfer of the
Rights Certificates of each series issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 4(b), 14 and 24
hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Rights Certificate
or Rights Certificates (other than Series A Rights Certificates
representing Series A Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section 24
hereof) may be transferred, split-up, combined or exchanged for
another Rights Certificate or Rights Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a
Preferred Share (or Class A Shares, other securities or property, as
the case may be) as the Rights Certificate or Rights Certificates
surrendered then entitle such holder to purchase. Any registered
holder desiring to transfer, split-up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split-up,
combined or exchanged at the principal office of the Rights Agent.
Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have
completed and signed the Certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon
the Rights Agent shall, subject to Sections 4 and 11(a)(ii) hereof,
countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to
cover any tax or
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governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, 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 Rights Certificate, if mutilated, the Company will make and
deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 11(a)(ii) hereof, the registered
holder of any valid Series A Rights Certificate may exercise the
Series A Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set
forth in Section 9(c) hereof) in whole or in part at any time after
the Distribution Date upon surrender of the Series A Rights
Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal office of
the Rights Agent, together with payment of the Purchase Price (as
defined below) for each one one-hundredth of a Preferred Share (or
Class A Shares, other securities, cash or other assets, as the case
may be) as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on March 21, 2006 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date"), or (iii) the
time at which such Rights are exchanged as provided in Section 24
hereof.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share to be issued upon exercise of a Right shall initially
be $90, shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (d) below.
(c) At any time after Series B Rights are purchased by or
distributed to holders of valid Series A Rights Certificates, a holder
of any valid Series B Rights Certificate may exercise the Series B
Rights evidenced thereby (except as otherwise provided herein) in
whole or in part upon surrender of the Series B Rights Certificate,
with the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the principal offices of the Rights
Agent, together with payment of the Purchase Price which is then in
effect for the Series A Rights (and if no Series A Rights remain
outstanding, the Purchase Price which would have been in effect had
the Series A Rights remained outstanding and all of the applicable
adjustments to the Purchase Price had been made) and shall receive
upon such exercise the number of one one-hundredths of Preferred
Shares (or Class A Shares, other securities, cash or other assets, as
the case may be)
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which such exercising holder would have received had such holder
exercised Series A Rights at the time of exercise.
(d) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate on the reverse side of the Rights Certificate duly
executed, accompanied by payment of the Purchase Price for the shares
(or other securities or property, as the case may be) to be purchased
and an amount equal to any applicable transfer tax required to be paid
by the holder of such Rights Certificate in accordance with Section 9
hereof by wire transfer, certified check, cashier's check or money
order payable to the order of the Company, or such other payment
method reasonably required by the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or make available if the Rights Agent is the
transfer agent of the Preferred Shares) certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or (B)
requisition from the depositary agent depositary receipts as provided
in Section 14(b) hereof, representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the depositary
agent and the Company hereby directs the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company
or such other entity the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to
be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of
such Rights Certificate. In the event that the Company elects or is
obligated to issue other securities (including Class A Shares) of the
Company, pay cash and/or distribute other property pursuant to Section
11(a)(iii) hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or property are available for
distribution by the Rights Agent, if and when appropriate.
(e) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby,
a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Rights Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) except as set forth in
Section 7(h) below completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and
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(ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
(g) Notwithstanding any statement to the contrary
contained in this Agreement or in any Rights Certificate, if the
Distribution Date or the Shares Acquisition Date shall occur prior to
the Record Date, the provisions of this Agreement, including (without
limitation) Sections 3 and 11(a)(ii), shall be applicable to the
Rights upon their issuance to the same extent such provisions would
have been applicable if the Record Date were the date of this
Agreement.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or to
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
Preferred Shares (and, following the occurrence of a Distribution
Date, out of its authorized and unissued Class A Shares and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of Preferred Shares (or Class A Shares and/or
other securities, as the case may be) that will be sufficient to
permit the exercise in full of all outstanding Rights as provided in
this Agreement.
(b) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares
(or Class A Shares and/or other securities, as the case may be)
delivered upon exercise of Rights shall be, at the time of delivery of
the Certificates for such Preferred Shares (or Class A Shares and/or
other securities, as the case may be) (subject to any necessary
payment of the Purchase Price), duly and validly authorized and issued
and fully paid and nonassessable shares.
(c) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates or of any Preferred Shares (or
Class A Shares and/or other securities, as the case may be) upon the
exercise of
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Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the
Preferred Shares (or Class A Shares and/or other securities, as the
case may be) in a name other than that of, the registered holder of
the Rights Certificate evidencing Rights surrendered for exercise or
to issue or to deliver any certificates or depositary receipts for
Preferred Shares (or Class A Shares and/or other securities, as the
case may be) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax
is due.
(d) So long as the shares of Preferred Stock (and,
following the occurrence of a Distribution Date, Class A Shares and/or
other securities, as the case may be) issuable and deliverable upon
the exercise of the Rights may be listed on any inter-dealer quotation
system or national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(e) The Company shall use its best efforts to (i) file on
the appropriate form, as soon as practicable following the earliest
date after the first occurrence of a Section 11(a)(ii) Event on which
the consideration to be delivered by the Company upon exercise of the
Rights has been determined hereunder, a registration statement under
the Securities Act of 1933, as amended (the "Act"), with respect to
the securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which
the Rights are no longer exercisable for such securities, and (B) the
Final Expiration Date. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no
longer in effect. In addition, if the Company shall determine that a
registration statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared
effective. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not be permitted
under applicable law or a registration statement shall not have been
declared effective.
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Section 10. Preferred Shares Record Date. Each Person in whose
name any certificate for Preferred Shares (or Class A Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Class A Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights certificate evidencing such Rights was duly surrendered and
payment of the applicable Purchase Price (and any applicable transfer taxes)
was made (or Rights were duly surrendered in exchange for Class A Shares
pursuant to Section 24 hereof); provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Shares (or Class A
Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares (or Class A Shares and/or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a holder of Preferred Shares
(or Class A Shares and/or other securities, as the case may be) for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by and obtainable upon exercise of each Right, and the number of Rights
outstanding, are subject to adjustment from time to time as provided in
Sections 11 and 13 of this Agreement.
(a) (i) In the event the Company shall at
any time after the date of this Agreement (A) declare a
dividend on the Preferred Shares payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer
books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of
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one Right. If an event occurs which would require adjustment
under both 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) Subject to Section 24 of this
Agreement, in the event any Person shall become an Acquiring
Person, each holder of a valid Series A Right shall thereafter
have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of
this Agreement, and in lieu of Preferred Shares, (1) such
number of Class A Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share
for which, a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price
of the Company's Class A Shares (determined pursuant to
Section 11(d) hereof) on the date of the occurrence of the
event described above, and (2) one Series B Right for each
valid Series A Right surrendered. In the event that any
Person shall become an Acquiring Person and the Rights shall
then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be
afforded by the Rights.
From and after the time when a Person becomes an
Acquiring Person (a "Section 11(a)(ii) Event") any Rights that
are or were acquired or beneficially owned by (i) any
Acquiring Person (or any Associate or Affiliate of such
Acquiring Person), (ii) a transferee of such Acquiring Person
(or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person became an Acquiring
Person or (iii) a transferee of such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person's becoming
an Acquiring Person and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring
Person has any continuing agreement, arrangement or
understanding, whether written or oral, regarding the
transferred Rights or (B) a transfer which the Board of
Directors has determined in good faith is part of a plan,
arrangement or understanding, whether written or oral, which
has as a primary purpose or effect the avoidance of this
Section 11(a)(ii), shall each be void and any holder of such
Rights shall thereafter have no exercise or any other rights
whatsoever with respect to such Rights under any provision of
this Agreement or otherwise. No Rights Certificate shall be
issued pursuant to Section 3, this Section 11(a)(ii) or
Section 24 that represents Rights beneficially owned by an
Acquiring Person or any Associate or Affiliate thereof whose
Rights would be void pursuant to the preceding sentence; no
Rights Certificate shall be issued at any time upon the
transfer of any Rights
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to an Acquiring Person or any Associate or Affiliate thereof
whose Rights would be void pursuant to the preceding sentence
or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Rights Certificate delivered to the Rights
Agent for transfer to an Acquiring Person, Associate or
Affiliate thereof whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) In lieu of issuing Class A Shares of
the Company in accordance with Section 11(a)(ii) hereof, the
Company may, in the sole discretion of the Board of Directors,
elect to (and, in the event that the Board of Directors has
not exercised the exchange right contained in Section 24
hereof and there are not sufficient issued but not outstanding
and authorized but unissued Class A Shares to permit the
exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall) take all such
action as may be necessary to authorize, issue or pay, upon
the exercise of the Rights, cash (including by way of a
reduction of the Purchase Price), property, other securities
or any combination thereof having an aggregate value equal to
the value of the Class A Shares of the Company which otherwise
would have been issuable pursuant to Section 11(a)(ii), which
aggregate value shall be determined by a majority of the Board
of Directors. For purposes of the preceding sentence, the
value of the Class A Shares shall be determined pursuant to
Section 11(d) hereof and the value of any equity securities
which a majority of the Board of Directors determines to be a
"common stock equivalent" (including the Preferred Shares, in
such ratio as the Board of Directors shall determine) shall be
deemed to have the same value as the Class A Shares. Any such
election by the Board of Directors must be made and publicly
announced within 60 days following the date on which the event
described in Section 11(a)(ii) shall have occurred. Following
the occurrence of the event described in Section 11(a)(ii), a
majority of the Board of Directors then in office may suspend
the exercisability of the Rights for a period of up to 60 days
following the date on which the event described in Section
11(a)(ii) shall have occurred to the extent that such
directors have not determined whether to exercise the
Company's right of election under this Section 11(a)(iii). In
the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the
Rights has been temporarily suspended.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section
11(d)) on such record date,
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the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares which could be purchased at the current
per share market price for the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) and the denominator of which
shall be the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price
may be paid in a 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. Preferred Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights,
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 the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets (other
than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share
market price of the Preferred Shares on such record date, less the
fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of
the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
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(d) (i) For the purpose of any computation hereunder,
the "current per share market price" of any security (a "Security" for
the purpose of this Section 11(d)(i)) on any date shall be deemed to
be the average of the daily closing prices (determined as provided in
the next sentence) per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for the purpose of any computation under Section
11(a)(iii) hereof, the "current per share market price" of a Security
on any date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trading Days
immediately following such date; provided, however, that in the event
that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share
market price shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security as if such
dividend, distribution, combination or reclassification has not been
declared. 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 on the Nasdaq
National Market or, if the Security is listed or admitted for trading
on a national exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed
or admitted to trading, or, if the Security is not listed on the
Nasdaq National Market or 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 any other system then in use,
or, if on any such date the Security is 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
Security selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is
not listed or admitted to trading on any national securities exchange,
a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the
"current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the
Class A Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by
one hundred. If neither the Class A Shares nor the Preferred Shares
are publicly held or so listed or traded,
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"current per share market price" shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent.
(e) 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, however, that any
adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or security,
as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Sections 11(a), 11(b) and 11(c), and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
11(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
Preferred Share (calculated to the nearest one one-millionth of a
Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths of
a Preferred Share purchasable upon the exercise of a
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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 Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior
to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one 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 Rights Certificates have been issued, shall be
at least 10 days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a Preferred
Share issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number of one one-hundredths of a Preferred
Share which were expressed in the initial Rights Certificates issued
hereunder, without prejudice to the validity of such Rights
Certificate(s) or the application of the provisions hereof.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of the
then par value, if any, of the Preferred Shares 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 Preferred
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the Preferred Shares and
other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the
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Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional
shares 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 Shares, issuance wholly
for cash of any Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred
Shares or issuance of rights, options or warrants referred to in
Section 11(b), hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Shares Acquisition Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (i) the number of one one-hundredths of
a Preferred Share purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of one
one-hundredths of a Preferred Share so purchasable immediately prior
to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding
immediately after such event, and (ii) each Common Share outstanding
immediately after such event shall have issued with respect to it that
number of Rights which each Common Share outstanding immediately prior
to such event had issued with respect to it. The adjustments provided
for in this Section 11 shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate in accordance with
Section 25 hereof.
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Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) If, after the Shares Acquisition Date, directly or
indirectly, (w) the Company shall consolidate with, or merge with and
into, any other Person, (x) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be
the continuing or surviving corporation of such merger and, in
connection with such merger or consolidation all or part of the
outstanding Common Shares are changed into or exchanged for stock or
other securities of any other Person (or the Company) or cash or any
other property, or (y) the Company shall sell, mortgage or otherwise
transfer (or one or more of its Subsidiaries shall sell, mortgage or
otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person other
than the Company or one or more of its wholly-owned Subsidiaries,
then, and in each such case, (i) each holder of a Series A Right or
Series B Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable in accordance with the terms of this Agreement, and in
lieu of Preferred Shares, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable Class A Shares
of the Principal Party (as hereinafter defined) not subject to any
liens, encumbrances, rights of first refusal or other adverse claims,
as shall equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product
by (B) 50% of the then current per share market price of the Class A
Shares of the Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger,
sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale
or transfer all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party; and (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its Class A Shares in accordance with Section 9
hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to the Class A Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in
(w) or (x) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which Common Shares
of the Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is the
surviving entity of such merger or consolidation (including
the Company if applicable); and
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(ii) in the case of any transaction described in
(y) of the first sentence in Section 13(a), the Person that is
the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case described in clauses (b)(i)
and (b)(ii): (1) if the Class A Shares of such Person are not at such
time and have 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 Shares of
which is and has been so registered, "Principal Party" shall refer to
such other Person; (2) in case such Person is a Subsidiary, directly
or indirectly, or more than one person, the Common Shares of two or
more of which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common Shares
having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the
same person, the rules set forth in (1) and (2) above shall apply to
each of the chains of ownership having an interest in such joint
venture as if such party were a "Subsidiary" of both or all of such
joint venturers and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of
such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party
shall have sufficient Class A Shares authorized to permit the full
exercise of the Rights and prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that,
as soon as practicable after the date of any consolidation, merger,
sale or transfer mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Final
Expiration Date;
(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; and
(iii) take such actions as may be necessary or
appropriate under the blue sky laws of the various states.
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The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities outstanding
or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The
provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, sales or transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard
to which such fractional Rights would otherwise be issuable, an amount
in cash equal to the same fraction of the current market value of a
whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the principal national
securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system
then in use, or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of Preferred Shares (other than fractions which are integral multiples
of one one-hundredth of a Preferred Share) upon exercise of the Rights
or to distribute certificates which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a
depositary selected by it; provided, that such agreement shall provide
that the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are
not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Rights Certificates at
the time such Rights are exercised as
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herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share shall be
the closing price of a Preferred Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Distribution Date, the
Company shall not be required to issue fractions of Class A Shares
upon exercise of the Rights or to distribute Certificates which
evidence fractional shares of Common Stock. In lieu of fractional
Class A Shares, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one Class A Share. For purposes of this Section
14(c), the current market value of one Class A Share shall be the
closing price of one Class A Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(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 provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Shares), may, in
his own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, 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 Rights Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Series A Rights
(and accordingly, any right to receive Series B Rights) will be
transferable only in connection with the transfer of the Common
Shares;
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(b) after the Distribution Date with respect to the Series
A Rights, and after issuance with respect to the Series B Rights, the
Rights Certificates will be transferable only on the registry books of
the Rights Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of transfer
and with appropriate forms and certificates fully executed;
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Rights Certificate (or, prior to the
Distribution Date, the associated Certificate for Common Shares) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Certificate for Common Shares
made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary; 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 any 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.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this
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Agreement, including the costs and expenses of defending against any claim of
liability arising, directly or indirectly, therefrom.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Rights
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, 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
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authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
Certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and
such Certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such Certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii)
hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Section 3, 11, 13,
23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual
notice that such change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares (or Common
Shares and/or other securities, as the case may be) to be issued
pursuant to this agreement or any Rights Certificate or as to whether
any Preferred Shares (or Common Shares and/or other securities, as the
case may be) will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
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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, prior to the Shares Acquisition Date, instructions with
respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Secretary or the Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those
instructions.
(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 Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and thereafter 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 Shares or Preferred Shares by registered
or certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 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 Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent (other than the
Right Agent appointed hereunder), whether appointed by the Company or by such a
court, shall be a corporation organized and doing
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business under the laws of the United States or any state of the United States
so long as such corporation is authorized to do business as a banking
institution and is authorized to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Series A Rights (and accordingly the right to
receive Series B Rights) may be redeemed by action of the Board of
Directors pursuant to paragraph (b) of this Section 23 and shall not
be redeemed in any other manner. The Series B Rights when and if
issued shall not be redeemable in any manner at any time.
(b) The Board of Directors of the Company may, at its
option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all, but not less than all, of the then
outstanding Series A Rights at a redemption price of $.01 per Series A
Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price");provided, however, if the Board of Directors of the Company
authorizes redemption of the Series A Rights on or after the date of a
change (resulting from a proxy or consent solicitation) in a majority
of the directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated (or,
if upon the commencement of such solicitation, a majority of the Board
of Directors of the Company has determined in good faith) that such
Person (or any of its Affiliates or Associates) intends to take, or
may consider taking, any action which would result in such Person
becoming an Acquiring Person or which would cause the occurrence of a
Triggering Event, then for a period of 180 days following such date,
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34
there must be Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such
Continuing Directors unless, concurrent with such solicitation, such
Person (or one or more of its Affiliates or Associates) is making a
cash tender offer pursuant to Schedule 14D-1 (or any successor form)
filed with the Securities and Exchange Commission for all outstanding
Common Shares not beneficially owned by such Person (or by its
Affiliates or Associates). The redemption of the Series A Rights by
the Board of Directors may be made effective at such time on such
basis and with such conditions as the Board of Directors in its sole
discretion may establish. If redemption of the Rights is to be
effective as of a future date, the Rights shall continue to be
exercisable, subject to Section 11(a)(ii) hereof, until the effective
date of the redemption, provided that nothing contained herein shall
preclude the Board of Directors from subsequently causing the Rights
to be redeemed at a date earlier than the previously scheduled
effective date of the redemption. The Company may, at its option, pay
the Redemption Price in cash, Common Shares (based on the current per
share market price of the Common Shares at the time of redemption) or
any other form of consideration deemed appropriate by the Board of
Directors.
(c) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Series A Rights pursuant
to paragraph (b) of this Section 23 (or at the effective time of such
redemption established by the Board of Directors of the Company
pursuant to paragraph (b) of this Section 23), and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price. The Company shall promptly give
public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action of
the Board of Directors ordering the redemption of the Series A Rights
pursuant to paragraph (b) of this Section 23 or if later, the
effectiveness of the redemption of the rights pursuant to the last
sentence of paragraph (b), the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. 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.
The Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press release announcing the
manner of redemption of the Rights, (ii) depositing with a bank or
trust company having a capital and surplus of at least $100 million,
funds necessary for such redemption, in trust, to be applied to the
redemption of the Rights so called for redemption and (iii) arranging
for the mailing of the Redemption Price to the registered holders of
the Rights; then, and upon such action, all outstanding Rights
Certificates shall be null and void without further action by the
Company. 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 this Section 23
or in Section 24 hereof,
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35
and other than in connection with the purchase of Common Shares prior
to the Shares Acquisition Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Series A
Rights (which shall not include Series A Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for both (1)
Class A Shares at an exchange ratio of one Class A Share per Series A
Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof and
(2) Series B Rights at an exchange ratio of one Series B Right for
each Series A Right. 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, a Xxxxxx Affiliate, any
Subsidiary of the Company, any employee benefit plan of the Company or
any such Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Series A Rights pursuant
to subsection (a) of this Section 24 and without any further action
and without any notice, the right to exercise such Series A Rights
shall terminate and the only right thereafter of a holder of such
Series A Rights shall be to receive (1) that number of Class A Shares
equal to the number of valid Series A Rights held by such holder, and
(2) that number of valid Series B Rights equal to the number of valid
Series A Rights held by such holder. The Company shall promptly give
public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each
such notice of exchange will state the method by which the exchange of
the Common Shares and Series B Rights for Series A Rights will be
effected and, in the event of any partial exchange, the number of
Series A Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Series A Rights (other
than Series A Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Series A Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for
Class A Shares exchangeable for Rights, at the initial rate of one
one-hundredth of a Preferred Share (or equivalent preferred share) for
each Class
32
36
A Share, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Shares pursuant to the terms thereof,
so that the fraction of a Preferred Share delivered in lieu of each
Class A Share shall have the same voting rights as one Class A Share.
(d) In the event that there shall not be sufficient Class
A Shares or Preferred Shares issued but not outstanding or authorized
but unissued to permit any exchange of Series A Rights as contemplated
in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Class A Shares or
Preferred Shares for issuance upon exchange of the Series A Rights.
(e) The Company shall not be required to issue fractions
of Common Shares or to distribute Certificates which evidence
fractional Common Shares. In lieu of such fractional Common Shares,
the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Common Share. For the purposes of
this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant
to the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred
Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular quarterly cash dividend), (ii)
to offer to the holders of its Preferred Shares rights or warrants to
subscribe for or to purchase any additional Preferred Shares or shares
of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other
Person, (v) to effect the liquidation, dissolution or winding up of
the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclassification
or otherwise), then, in each such case, the Company shall give to each
holder of a Rights Certificate, in accordance with Section 26 hereof,
a notice of such proposed action, which shall specify the record date
for such event, and the date of participation therein by the holders
of the Common Shares and/or Preferred Shares, if any such date is to
be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at
least 10 days prior
33
37
to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such
event, which notice shall describe such event and the consequences of
such event to holders of Rights under Section 11(a)(ii) hereof.
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
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
FRUIT OF THE LOOM, INC.
5000 Sears Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from time
to time supplement or amend this Agreement without the approval of any holders
of Rights Certificates in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes
an
34
38
Acquiring Person, this Agreement may only be amended in a manner which would
not adversely affect the interests of the holders of Rights (except the
interests of any Acquiring Person and its Affiliates and Associates), which
amendment shall be effective only if there are Continuing Directors and shall
require the concurrence of a majority of such Continuing Directors.
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. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person or corporation other than the Company,
the Rights Agent and the registered holders of valid Rights Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of valid Rights Certificates (and, prior to the Distribution
Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
FRUIT OF THE LOOM, INC.
Attest:
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------ --------------------------------------
Title: Assistance Secretary Title: Senior Executive Vice President
& Chief Financial Officer
CHEMICAL MELLON SHAREHOLDER
SERVICES, L.L.C.
Attest:
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------ --------------------------------------
Title: Assistant Vice Title: Vice President
President
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40
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
FRUIT OF THE LOOM, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
_____________________________________
FRUIT OF THE LOOM, INC., a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"Company"), hereby certifies that the following resolution was adopted by the
Board of Directors of the Company as required by Section 151 of the General
Corporation Law at a meeting duly called and held on February 22, 1996:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Company (hereinafter called the "Board of Directors"
or the "Board") in accordance with the provisions of the Restated Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall initially be 1,500,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights
or warrants or upon the conversion of any outstanding securities or rights
issued by the Company convertible into Series A Preferred Stock and further
provided that the Board of Directors shall increase the number of shares
A-1
41
constituting the Series A Preferred Stock to the extent necessary for the
Company to have available sufficient shares of such Series A Preferred Stock
available to fulfill all of the Company's obligations to holders of securities
and Rights of the Company.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to
the holders of Class A Common Stock, and Class B Common Stock, par
value $.01 per share of the Company (the "Class A Common Stock" and
"Class B Common Stock" respectively, collectively, the "Common
Stock"), and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds
legally available for the purpose, dividends payable when and as
dividends are declared on the Company's Common Stock in an amount,
subject to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, declared on the Company's
Common Stock (except as provided in the next sentence). In the event
the Company shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under 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 Company shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on
the Common Stock.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of
the holders of Class A Common Stock of the Company, voting together
with the holders Class A Common Stock as a class.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or
any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Class A Common Stock and
any other capital stock of the Company having general voting rights
shall vote together as one class on all matters submitted to a vote of
stockholders of the Company.
A-2
42
(C) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set forth herein,
in the Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 5. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, 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 A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of shares of Class A
Common Stock. In the event the Company shall at any time declare or pay any
dividend on the Class A Common Stock payable in shares of Class A Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Class A Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Class A Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A 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 6. Consolidation, Merger, etc. In case the Company shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Class A Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Class A Common Stock is changed or
exchanged. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A 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
A-3
43
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. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 8. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Company's Preferred Stock.
Section 9. Amendment. The Restated Certificate of Incorporation
of the Company shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by its Chairman of the Board on this ____ day of
________________, 199__.
--------------------------
Chairman of the Board
A-4
44
EXHIBIT B
Form of Series A Rights Certificate
Certificate No. A ____ _____ Series A Rights
NOT EXERCISABLE AFTER _______________, 200__ OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT, AND ARE VOIDABLE AND SUBJECT TO EXCHANGE ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN THE SECOND
PARAGRAPH OF SECTION 11(A)(II) OF SUCH AGREEMENT.]*
Series A Rights Certificate
FRUIT OF THE LOOM, INC.
This certifies that ____________________, or registered assigns, is
the registered owner of the number of Series A Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of _______________, 199__ (the
"Rights Agreement") between FRUIT OF THE LOOM, INC., a Delaware corporation
(the "Company"), and CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C. (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 p.m.,
Chicago, Illinois time on ________________, 200__ at the principal office of
the Rights Agent, or at the office of its successor as Rights Agent, one
one-hundredths of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $90 per one one-hundredths of
a Preferred Share (the "Purchase Price"), upon presentation and surrender of
this Series A Rights Certificate with the Form of Election to Purchase duly
executed. The number of Series A Rights evidenced by this Series A Rights
Certificate (and the number of one one-hundredths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth
__________________________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
B-1
45
above, are the number and Purchase Price as of ________________, 199__, based
on the Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Series A Rights
evidenced by this Series A Rights Certificate are subject to modification and
adjustment upon the happening of certain events.
This Series A Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned offices of the Rights
Agent.
This Series A Rights Certificate, with or without other Series A
Rights Certificates, upon surrender at the principal office of the Rights
Agent, may be exchanged for another Series A Rights Certificate or Series A
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of Preferred Shares as the Series A
Rights evidenced by the Series A Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Series A
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Series A Rights Certificate or Series A
Rights Certificates for the number of whole Series A Rights not exercised.
Subject to the provisions of the Rights Agreement, the Series A Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged in whole or in part
for both (A) Preferred Shares or shares of the Company's Class A Common Stock,
par value $.01 per share, and (B) Series B Rights, on the terms set forth in
the Rights Agreement.
No fractional Preferred Shares will be issued upon the exercise of any
Series A Right or Series A Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredths of a Preferred Share, 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.
No holder of this Series A Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Series A Rights evidenced by this Series A
Rights Certificate shall have been exercised as provided in the Rights
Agreement.
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This Series A Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _________________, 19__.
ATTEST: FRUIT OF THE LOOM, INC.
By:
------------------------------ -----------------------------
Countersigned:
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
By:
----------------------------------------
Authorized Signature
B-3
47
[FORM OF REVERSE SIDE OF SERIES A RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Series A Rights Certificate.)
FOR VALUE RECEIVED, ______________________________ hereby sells,
assigns and transfers unto ____________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
(Please print social security or other identifying number of transferee)
this Series A Rights Certificate, together with all interest therein, and does
hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Series A Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________________, 19__
___________________________________
Signature
Signature Guaranteed: _________________________________________________________
Signature must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such 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 Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
Dated: _________________________, 19__
______________________________________
Signature
Signature Guaranteed: __________________________________________________________
NOTICE
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
The signature must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-5
49
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Series A Rights Certificate.)
To: FRUIT OF THE LOOM, INC.
The undersigned hereby irrevocably elects to exercise _____________
Series A Rights represented by this Series A Rights Certificate to purchase the
Preferred Shares issuable upon the exercise of such Series A 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
Preferred Shares be issued in the name of:
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
If such number of Series A Rights shall not be all the Series A Rights
evidenced by this Series A Rights Certificate, a new Series A Rights
Certificate for the balance remaining of such Series A Rights shall be
registered in the name of and delivered to:
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
Dated: _________________________, 19__
___________________________________
Signature
Signature Guaranteed: __________________________________________________________
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
B-6
50
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
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 Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
Dated: _________________________, 19__
___________________________________
Signature
Signature Guaranteed: __________________________________________________________
NOTICE
The signatures to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
The signature must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad 15).
B-7
51
NOTICE
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Series A Rights evidenced by this Series A Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
B-8
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EXHIBIT C
Form of Series B Rights Certificate
Certificate No. B ____ ______ Series B Rights
NOT EXERCISABLE AFTER _______________, 200__. [THE RIGHTS REPRESENTED BY
THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN THE SECOND PARAGRAPH OF SECTION 11(A)(II) OF SUCH
AGREEMENT.]*
Series B Rights Certificate
FRUIT OF THE LOOM, INC.
This certifies that ____________________, or registered assigns, is
the registered owner of the number of Series B Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of _________, 199__ (the "Rights
Agreement") between FRUIT OF THE LOOM, INC., a Delaware corporation (the
"Company"), and CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C. (the "Rights
Agent"), to purchase from the Company at any time after issuance and prior to
5:00 p.m., Chicago, Illinois time on ________________, 200__ at the principal
office of the Rights Agent, or at the office of its successor as Rights Agent,
one one-hundredths of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company, at a purchase price of $90 per one one-hundredths of
a Preferred Share (the "Purchase Price"), upon presentation and surrender of
this Series B Rights Certificate with the Form of Election to Purchase duly
executed. The number of Series B Rights evidenced by this Series B Rights
Certificate (and the number of one one-hundredths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of _______________,
199__, based on the Preferred Shares as constituted at such date. As provided
in the Rights Agreement, the Purchase Price and the number of one
one-hundredths of a Preferred Share which may be purchased upon the exercise of
the Series B Rights evidenced by this Series B Rights Certificate are subject
to modification and adjustment upon the happening of certain events.
__________________________________
*The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
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53
This Series B Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Series B
Rights Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned offices of
the Rights Agent.
This Series B Rights Certificate, with or without other Series B
Rights Certificates, upon surrender at the principal office of the Rights
Agent, may be exchanged for another Series B Rights Certificate or Series B
Rights Certificates of like tenor and date evidencing Series B Rights entitling
the holder to purchase a like aggregate number of Preferred Shares as the
Series B Rights evidenced by the Series B Rights Certificate or Series B Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Series B Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Series B Rights Certificate
or Series B Rights Certificates for the number of whole Series B Rights not
exercised.
The Rights Agreement provides that the Series B Rights evidenced by
this Certificate, when and if issued, may not be redeemed by the Company.
No fractional Preferred Shares will be issued upon the exercise of any
Series B Right or Series B Rights evidenced hereby (other than fractions which
are integral multiples of one one-hundredths of a Preferred Share, 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.
No holder of this Series B Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Series B Right or Series B Rights evidenced by
this Series B Rights Certificate shall have been exercised as provided in the
Rights Agreement.
This Series B Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
C-2
54
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _________________, 19__.
ATTEST: FRUIT OF THE LOOM, INC.
By:
------------------------------ -----------------------------
Countersigned:
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
By:
---------------------------------------
Authorized Signature
C-3
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[FORM OF REVERSE SIDE OF SERIES B RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Series B Rights Certificate.)
FOR VALUE RECEIVED, ______________________________ hereby sells,
assigns and transfers unto _____________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
(Please print social security or other identifying number of transferee)
this Series B Rights Certificate, together with all interest therein, and does
hereby irrevocably constitute and appoint ______________________ Attorney, to
transfer the within Series B Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________________, 19__
___________________________________
Signature
Signature Guaranteed: __________________________________________________________
Signature must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such 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 Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
Dated: _________________________, 19__
__________________________________
Signature
Signature Guaranteed: __________________________________________________________
NOTICE
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
The signature must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
C-5
57
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Series B Rights Certificate.)
To: FRUIT OF THE LOOM, INC.
The undersigned hereby irrevocably elects to exercise _____________
Series B Rights represented by this Series B Rights Certificate to purchase the
Preferred Shares issuable upon the exercise of such Series B 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
Preferred Shares be issued in the name of:
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
If such number of Series B Rights shall not be all the Series B Rights
evidenced by this Series B Rights Certificate, a new Series B Rights
Certificate for the balance remaining of such Series B Rights shall be
registered in the name of and delivered to:
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
Dated: _________________________, 19__
_____________________________________
Signature
Signature Guaranteed: __________________________________________________________
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
C-6
58
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
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 Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
Dated: _________________________, 19__
___________________________________
Signature
Signature Guaranteed: __________________________________________________________
NOTICE
The signatures to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
The signature must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
C-7
59
NOTICE
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Series B Rights evidenced by this Series B Rights Certificate to be an
Acquiring Person or an Affiliate, Associate or Group Member thereof (as defined
in the Rights Agreement) and such Assignment or Election to Purchase will not
be honored.
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EXHIBIT D
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES UNDER PLAN ADOPTED BY
FRUIT OF THE LOOM, INC.
On February 22, 1996, the Board of Directors of FRUIT OF THE LOOM,
INC. (the "Company") declared a dividend of one Series A Right (a "Series A
Right") for each outstanding share of its common stock (Class A and Class B),
par value $.01 per share (the "Common Shares"), of the Company. The dividend
is payable on March 22, 1996 (the "Record Date") to the shareholders of record
on that date. Each Series A Right entitles the registered holder to purchase
from the Company one one-hundredths of a share of Series A Junior Participating
Preferred Stock, par value $.01 per share (the "Preferred Shares"), of the
Company at a price of $90 per one one-hundredths of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Series A Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C., as Rights
Agent (the "Rights Agent").
Until the earlier of (i) the close of business on the tenth day after
the first public announcement that a person or group of affiliated or
associated persons have acquired beneficial ownership of 15% or more of the
outstanding Common Shares (an "Acquiring Person"), or (ii) the close of
business on the tenth day (or such later date as may be determined by action of
the Board of Directors prior to such time as any Person becomes an Acquiring
Person) following the commencement of, or announcement of an intention to make,
a tender offer or exchange offer the consummation of which would result in the
beneficial ownership of such person or group of 15% or more of such outstanding
Common Shares (the earlier of such dates being called the "Distribution Date"),
the Series A Rights will be evidenced by the Common Share certificates, will be
transferable only by the transfer of the Common Shares associated with such
Rights and any transfer of the Common Shares (including a transfer to the
Company) will constitute a transfer of the Series A Rights. As described
below, after a person or group becomes an Acquiring Person, the Series A Rights
may not be redeemed may only be amended in limited circumstances.
Until the Distribution Date (or earlier redemption or expiration of
the Series A Rights), new Common Share certificates issued after the Record
Date, upon transfer or new issuance of Common Shares, will contain a legend
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Series A Rights), the surrender for
transfer of any certificates for Common Shares outstanding as of the Record
Date, even without such notation or a copy of this Summary of Rights being
attached, will also constitute the transfer of the Series A Rights associated
with the Common Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Series A
Rights ("Series A Rights Certificates") will be mailed to holders of record of
the Common Shares as of the close of business on the Distribution Date and such
separate Series A Rights Certificates alone will evidence the Series A Rights.
D-1
61
The Series A Rights are not exercisable until a person, entity or
group becomes an Acquiring Person. The Series A Rights will expire on March
21, 2006 (the "Final Expiration Date"), unless the Final Expiration Date is
extended or unless the Series A Rights are redeemed earlier by the Company, in
each case, as described below.
If a person or group of affiliated or associated persons becomes an
"Acquiring Person" by obtaining beneficial ownership of more than 15% of the
then outstanding Common Shares, each holder of a Series A Right (other than
those described in the next sentence) will thereafter have the right to
receive, upon exercise, both (1) Class A Common Shares (or, in certain
circumstances, cash, property or other securities of the Company) having a
value equal to two times the Purchase Price of the Series A Right, and (2) a
Series B Right. All Series A Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person will be void. The Series B Rights are very much like the Series A
Rights.
At any time after the first date of public announcement by the Company
or an Acquiring Person than an Acquiring Person has become such (a "Shares
Acquisition Date"), if (i) the Company is the surviving corporation in a merger
with any other company or entity, (ii) the Company is acquired in a merger or
other business combination transaction, or (iii) 50% or more of the Company's
consolidated assets or earning power are sold, each holder of a Series A Right
or a Series B Right (other than those whose rights have become void) will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Series A or Series B Right, that number of shares
of common stock of the surviving or acquiring company which at the time of such
transaction will have a market value of two times the exercise price of such
Right.
At any time after a person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Series A Rights (other than Series A Rights owned by such person or group
which have become void), in whole or in part, without any additional payment,
for both (1) Class A Common Shares at an exchange ratio of one Class A Common
Share (or of a share of a class or series of the Company's preferred shares
having equivalent rights, preferences and privileges), per Series A Right
(subject to adjustment), and (2) Series B Rights at an exchange ratio of one
Series B Right per Series A Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredths of a Preferred
share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the Shares Acquisition Date, the Board of
Directors of the Company may redeem all, but not less than all, of the Series A
Rights at a price of $.01 per Series A Right (the "Redemption Price"). Under
certain circumstances set forth in the Rights Agreement, the decision to redeem
shall require the concurrence of a majority of the Continuing Directors. The
redemption of the Series A Rights may be made effective at such time, on such
basis and
D-2
62
with such conditions as the Board of Directors in its sole discretion may
establish. The Series B Rights, if an when issued, are not redeemable.
Immediately upon any redemption of the Series A Rights, the right to
exercise the Series A Rights will terminate and the only right of the holders
of Series A Rights will be to receive the Redemption Price.
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
Other than those provisions relating to the principal economic terms
of the Series A Rights and the Series B Rights, any of the provisions of the
Series A Rights and, prior to their issuance, the Series B Rights, may be
amended by the Board of Directors of the Company prior to the Shares
Acquisition Date. After the Shares Acquisition Date, the provisions of the
Rights Agreement may be amended by the Board to make changes which do not
adversely affect the interests of holders of Series A Rights or Series B Rights
(excluding the interests of any Acquiring Person) which amendment shall require
the concurrence of a majority of the Continuing Directors. Series B Rights, if
and when issued, may not thereafter be amended.
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 dated
March 11, 1996. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Series A and Series B Rights
does not purport to be complete and is qualified in its entirety by reference
to the Rights Agreement, which is hereby incorporated herein by reference.
D-3
