RIGHTS AGREEMENT, Dated as of May 20, 2009, By and Between THE J. M. SMUCKER COMPANY and COMPUTERSHARE TRUST COMPANY, N.A., As Rights Agent
Exhibit 4.1
Dated as of May 20, 2009,
By and Between
THE X. X. XXXXXXX COMPANY
and
COMPUTERSHARE TRUST COMPANY, N.A.,
As Rights Agent
As Rights Agent
TABLE OF CONTENTS
| Page | ||||||
1. |
Certain Definitions | 1 | ||||
2. |
Appointment of Rights Agent | 5 | ||||
3. |
Issue of Right Certificates | 5 | ||||
4. |
Form of Right Certificates | 6 | ||||
5. |
Countersignature and Registration | 6 | ||||
6. |
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates | 6 | ||||
7. |
Exercise of Rights; Purchase Price; Expiration Date of Rights | 7 | ||||
8. |
Cancellation and Destruction of Right Certificates | 8 | ||||
9. |
Company Covenants Concerning Securities and Rights | 8 | ||||
10. |
Record Date | 9 | ||||
11. |
Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights | 9 | ||||
12. |
Certificate of Adjusted Purchase Price or Number of Securities | 15 | ||||
13. |
Consolidation, Merger or Sale or Transfer of Assets or Earning Power | 15 | ||||
14. |
Fractional Rights and Fractional Securities | 17 | ||||
15. |
Rights of Action | 18 | ||||
16. |
Agreement of Rights Holders | 18 | ||||
17. |
Right Certificate Holder Not Deemed a Xxxxxxxxxxx | 00 | ||||
00. |
Concerning the Rights Agent | 19 | ||||
19. |
Merger or Consolidation or Change of Name of Rights Agent | 20 | ||||
20. |
Duties of Rights Agent | 20 | ||||
21. |
Change of Rights Agent | 21 | ||||
22. |
Issuance of New Right Certificates | 22 | ||||
23. |
Redemption | 22 | ||||
24. |
Exchange | 23 | ||||
25. |
Notice of Certain Events | 23 | ||||
26. |
Notices | 24 | ||||
27. |
Supplements and Amendments | 24 | ||||
28. |
Successors; Certain Covenants | 25 | ||||
29. |
Benefits of This Agreement | 25 | ||||
30. |
Governing Law | 25 | ||||
31. |
Severability | 25 | ||||
32. |
Descriptive Headings, Etc. | 25 | ||||
33. |
Determinations and Actions By the Directors | 26 | ||||
34. |
Counterparts | 26 | ||||
35. |
Force Majeure | 26 | ||||
-i-
This Rights Agreement, dated as of May 20, 2009 (this “Agreement”), is made and entered into
by and between The X. X. Xxxxxxx Company, an Ohio corporation (the “Company”), and Computershare
Trust Company, N.A., as rights agent (the “Rights Agent”).
1. Certain Definitions. For purposes of this Agreement, the following terms have the meanings
indicated:
(a) “Acquiring Person” means any Person (other than the Company or any Related Person or any
Exempted Person) who or which, together with all Affiliates and Associates of such Person, is or
becomes the Beneficial Owner of 10% or more of the then-outstanding Common Shares;
provided, however, that a Person will not be deemed to have become an Acquiring
Person solely as a result of a reduction in the number of Common Shares outstanding unless and
until such time as (i) such Person or any Affiliate or Associate of such Person thereafter becomes
the Beneficial Owner of additional Common Shares representing 1% or more of the then-outstanding
Common Shares, other than as a result of a stock dividend, stock split or similar transaction
effected by the Company in which all holders of Common Shares are treated equally, or (ii) any
other Person who is the Beneficial Owner of Common Shares representing 1% or more of the
then-outstanding Common Shares thereafter becomes an Affiliate or Associate of such Person.
Notwithstanding the foregoing, if the Directors of the Company determine in good faith that a
Person who would otherwise be an “Acquiring Person” as defined pursuant to the foregoing provisions
of this Section 1(a), has become such inadvertently, and such Person divests as promptly as
practicable or agrees with the Company to divest 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 Section 1(a), then such Person shall not be deemed to be an
“Acquiring Person” for any purposes of this Agreement.
(b) “Affiliate” and “Associate” will 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, provided however, that a Person will not be deemed to be the
Affiliate or Associate of another Person solely because either or both Persons are or were
Directors of the Company.
(c) A Person will be deemed the “Beneficial Owner” of, and to “Beneficially Own,” and to have
“Beneficial Ownership” of, any securities:
(i) which such Person or any of such Person’s Affiliates or Associates is deemed to
beneficially own, directly or indirectly, within the meaning of Rule 13d-3 of the General
Rules and Regulations under the Exchange Act as in effect on the date of this Agreement;
(ii) the beneficial ownership of which such Person or any of such Person’s Affiliates
or Associates, directly or indirectly, has the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise of conversion
rights, exchange rights, warrants, options or other rights (in each case, other than upon
exercise or exchange of the Rights); provided, however, that a Person will
not be deemed the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for purchase or
exchange; or
(iii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, including pursuant to any
agreement, arrangement or understanding (whether or not in writing); or
(iv) of which any other Person is the Beneficial Owner, if such Person or any of such
Person’s Affiliates or Associates has any agreement, arrangement or understanding (whether
or not in writing) with such other Person (or any of such other Person’s Affiliates or
Associates) with respect to acquiring, holding, voting or disposing of any securities of the
Company; or
(v) in respect of which such Person or any of such Person’s Affiliates or Associates
has a Synthetic Long Position that has been disclosed in a filing by such Person or any of
such Person’s Affiliates or Associates with the Securities and Exchange Commission pursuant
to Regulation 13D-G or Regulation 14D under the Exchange Act in respect of which Common
Shares are the “subject security” (as such term is used in such Regulations);
provided, however, that a Person will not be deemed the Beneficial Owner of, or to
Beneficially Own, any security (A) if such Person has the right to vote such security pursuant to
an agreement, arrangement or understanding (whether or not in writing) which (1) arises solely from
a revocable proxy or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises solely as a result of
such Person’s status as a “clearing agency,” as defined in Section 3(a)(23) of the Exchange Act;
provided further, however, that nothing in this Section 1(c) will cause a
Person engaged in business as an underwriter of securities to be the Beneficial Owner of, or to
Beneficially Own, any securities acquired through such Person’s participation in good faith in an
underwriting syndicate until the expiration of 40 calendar days after the date of such acquisition,
or such later date as the Directors of the Company may determine in any specific case.
(d) “Business Day” means any day other than a Saturday, Sunday or a day on which banking
institutions in the Commonwealth of Massachusetts are authorized or obligated by law or executive
order to close.
(e) “Close of Business” on any given date means 5:00 p.m., Eastern time, on such date;
provided, however, that if such date is not a Business Day it means 5:00 p.m.,
Eastern time, on the next succeeding Business Day.
(f) “Common Shares” when used with reference to the Company means the common shares, without
par value, of the Company, provided, however, that, if the Company is the
continuing or surviving corporation in a transaction described in Section 13(a)(ii), “Common
Shares” when used with reference to the Company means shares of the capital stock or units of the
equity interests with the greatest aggregate voting power of the Company. “Common Shares” when used
with reference to any corporation or other legal entity other than the Company, including an
Issuer, means shares of the capital stock or units of the equity interests with the greatest
aggregate voting power of such corporation or other legal entity.
(g) “Company” means The X. X. Xxxxxxx Company, an Ohio corporation.
(h) “Distribution Date” means the earlier of: (i) the Close of Business on the tenth calendar
day following the Share Acquisition Date (or, if the tenth calendar day following the Share
Acquisition Date occurs
2
before the Record Date, the Close of Business on the Record Date), or (ii) the Close of
Business on the tenth Business Day (or, unless the Distribution Date shall have previously
occurred, such later date as may be specified by the Directors of the Company) after the
commencement of a tender or exchange offer by any Person (other than the Company or any Related
Person), if upon the consummation thereof such Person would be the Beneficial Owner of 10% or more
of the then-outstanding Common Shares.
(i) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(j) “Exempted Person” means any Xxxxxxx Family Member.
(k) “Expiration Date” means the earliest of (i) the Close of Business on the Final Expiration
Date, (ii) the time at which the Rights are redeemed as provided in Section 23, and (iii) the time
at which all exercisable Rights are exchanged as provided in Section 24.
(l) “Final Expiration Date” means the tenth anniversary of the Record Date.
(m) “Flip-in Event” means any event described in clauses (A), (B) or (C) of Section 11(a)(ii).
(n) “Flip-over Event” means any event described in clauses (i), (ii) or (iii) of Section
13(a).
(o) “Issuer” has the meaning set forth in Section 13(b).
(p) “Person” means any individual, firm, corporation, limited liability company or other legal
entity, and includes any successor (by merger or otherwise) of such entity.
(q) “Preferred Shares” means shares of Series A Junior Participating Preferred Shares, without
par value, of the Company having the rights and preferences set forth in the form of Certificate of
Adoption of Amendment to Amended Articles of Incorporation attached as Exhibit A.
(r) “Purchase Price” means initially $140.00 per one one-hundredth of a Preferred Share,
subject to adjustment from time to time as provided in this Agreement.
(s) “Record Date” has the meaning set forth in the Recitals to this Agreement.
(t) “Redemption Price” means $0.001 per Right, subject to adjustment by resolution of the
Directors of the Company to reflect any stock split, stock dividend or similar transaction
occurring after the Record Date.
(u) “Related Person” means (i) any Subsidiary of the Company or (ii) any employee benefit or
stock ownership plan of the Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan.
(v) “Right” has the meaning set forth in the Recitals to this Agreement.
(w) “Right Certificates” means the certificates evidencing the Rights in substantially the
form attached as Exhibit B.
(x) “Rights Agent” means Computershare Trust Company, N.A., unless and until a successor
Rights Agent has become such pursuant to the terms of this Agreement, and thereafter, “Rights
Agent” means such successor Rights Agent.
(y) “Securities Act” means the Securities Act of 1933, as amended.
(z) “Share Acquisition Date” means the first date of public announcement by the Company (by
press release, filing made with the Securities and Exchange Commission or otherwise) that an
Acquiring Person has become such.
3
(aa) “Xxxxxxx Family Member” means (i) any of the individuals, trusts, foundations,
partnerships or other entities listed on Schedule I, (ii) any trust created by (or on
behalf of) and for the benefit of any individual listed on Schedule I, or (iii) the
dependents of any individual listed on Schedule I that share the same household with such
individual.
(bb) “Subsidiary” when used with reference to any Person means any corporation or other legal
entity of which a majority of the voting power of the voting equity securities or equity interests
is owned, directly or indirectly, by such Person; provided, however, that for
purposes of Section 13(b), “Subsidiary” when used with reference to any Person means any
corporation or other legal entity of which at least 20% of the voting power of the voting equity
securities or equity interests is owned, directly or indirectly, by such Person.
(cc) “Synthetic Long Position” means any option, warrant, convertible security, stock
appreciation right or other contractual right, whether or not presently exercisable, which has an
exercise or conversion privilege or a settlement payment or mechanism at a price related to Common
Shares or a value determined in whole or part with reference to, or derived in whole or in part
from, the market price or value of Common Shares, whether or not such right is subject to
settlement in whole or in part in Common Shares, and which increases in value as the value of
Common Shares increases or which provides to the holder of such right an opportunity, directly or
indirectly, to profit or share in any profit derived from any increase in the value of Common
Shares, but shall not include:
(i) rights of a pledgee under a bona fide pledge of Common Shares;
(ii) rights of all holders of Common Shares to receive Common Shares pro rata, or
obligations to dispose of Common Shares, as a result of a merger, exchange offer, or
consolidation involving the Company;
(iii) rights or obligations to surrender Common Shares, or have Common Shares withheld,
upon the receipt or exercise of a derivative security or the receipt or vesting of equity
securities, in order to satisfy the exercise price or the tax withholding consequences of
receipt, exercise or vesting;
(iv) interests in broad-based index options, broad-based index futures, and broad-based
publicly traded market baskets of stocks approved for trading by the appropriate federal
governmental authority;
(v) interests or rights to participate in employee benefit plans of the Company held by
employees or former employees of the Company; or
(vi) options granted to an underwriter in a registered public offering for the purpose
of satisfying over-allotments in such offering.
The number of Common Shares in respect of which a Person has a Synthetic Long Position shall be the
notional or other number of Common Shares specified in a filing by such Person or any of such
Person’s Affiliates or Associates with the Securities and Exchange Commission pursuant to
Regulation 13D-G or Regulation 14D under the Exchange Act in respect of which Common Shares are the
“subject security” (as such term is defined in such Regulations) or in the documentation evidencing
the Synthetic Long Position as being subject to be acquired upon the exercise or settlement of the
applicable right or as the basis upon which the value or settlement amount of such right, or the
opportunity of the holder of such right to profit or share in any profit, is to be calculated in
whole or in part or, if no such number of Common Shares is specified in such filing or
documentation, as determined by the Directors of the Company in good faith to be the number of
Common Shares to which the Synthetic Long Position relates.
(dd) “Trading Day” means any day on which the principal national securities exchange or
quotation system on which the Common Shares are listed or admitted to trading is open for the
transaction of business or, if the Common Shares are not listed or admitted to trading on any
national securities exchange or quotation system, a Business Day.
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(ee) “Triggering Event” means any Flip-in Event or Flip-over Event.
2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent
for the Company in accordance with the terms and conditions of this Agreement, and the Rights Agent
hereby accepts such appointment and hereby certifies that it complies with all applicable
requirements governing transfer agents and registrars. The Company may from time to time act as
Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or desirable, upon ten
(10) days’ prior written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any such Co-Rights Agent.
Any actions which may be taken by the Rights Agent pursuant to the terms of this Agreement may be
taken by any such Co-Rights Agent. To the extent that any Co-Rights Agent takes any action pursuant
to this Agreement, such Co-Rights Agent will be entitled to all of the rights and protections of,
and subject to all of the applicable duties and obligations imposed upon, the Rights Agent pursuant
to the terms of this Agreement.
3. Issue of Right Certificates. (a) Until the Distribution Date, (i) the Rights will be
evidenced by the certificates representing Common Shares registered in the names of the record
holders thereof, which certificates representing Common Shares will also be deemed to be Right
Certificates or, if the Common Shares are uncertificated, by the registration of the associated
Common Shares on the stock transfer books of the Company, (ii) the Rights will be transferable only
in connection with the transfer of the underlying Common Shares, and (iii) the transfer of any
Common Shares in respect of which Rights have been issued will also constitute the transfer of the
Rights associated with such Common Shares. Commencing as promptly as practicable after the Record
Date, the Company will make available a copy of a Summary of Rights to Purchase Preferred Stock in
substantially the form attached as Exhibit C.
(b) Rights will be issued by the Company in respect of all Common Shares (other than Common
Shares issued upon the exercise or exchange of any Right) issued or delivered by the Company
(whether originally issued or delivered from the Company’s treasury) after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date. Certificates evidencing such
Common Shares will have stamped on, impressed on, printed on, written on, or otherwise affixed to
them the following legend or such similar legend as the Company may deem appropriate and as is not
inconsistent with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange or quotation system on which the Common Shares may from time to time be
listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof to certain Rights as set
forth in a Rights Agreement between The X. X. Xxxxxxx Company and Computershare Trust
Company, N.A., as Rights Agent, dated as of May 20, 2009 (as it may be amended from time to
time, the “Rights Agreement”), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of The X. X.
Xxxxxxx Company. The Rights are not exercisable prior to the occurrence of certain events
specified in the Rights Agreement. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may be exchanged, may expire, may be amended, or may
be evidenced by separate certificates and no longer be evidenced by this Certificate. The X.
X. Xxxxxxx Company will mail to the holder of this Certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances as set forth in the Rights Agreement,
Rights that are or were beneficially owned by an Acquiring Person or any Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) may
become null and void.
(c) Any Right Certificate issued pursuant to this Section 3 that represents Rights
beneficially owned by an Acquiring Person or any Associate or Affiliate thereof and any Right
Certificate issued at any time upon the transfer of any Rights to an Acquiring Person or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate
and any Right Certificate issued pursuant to Section 6 or 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this sentence, shall be
subject to and contain the following legend or such similar legend as the Company may deem
appropriate and as is not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to
conform to usage:
5
The Rights represented by this Right Certificate are or were beneficially owned by a Person
who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). This Right Certificate and the Rights
represented hereby may become null and void in the circumstances specified in Section
11(a)(ii) or Section 13 of the Rights Agreement.
(d) As promptly 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, at the expense of the Company), by first class, insured,
postage prepaid mail, to each record holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the Company, a Right
Certificate evidencing one Right for each Common Share so held, subject to adjustment as provided
herein. As of and after the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(e) In the event that the Company purchases or otherwise acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such Common Shares will
be deemed canceled and retired so that the Company will not be entitled to exercise any Rights
associated with the Common Shares so purchased or acquired.
4. Form of Right Certificates. The Right Certificates (and the form of election to purchase
and the form of assignment to be printed on the reverse thereof) will be substantially in the form
attached as Exhibit B with such changes and marks of identification or designation, and
such legends, summaries or endorsements printed thereon, as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or quotation system on which the Rights may from time to time be
listed or quoted, or to conform to usage. Subject to the provisions of Section 22, the Right
Certificates, whenever issued, on their face will entitle the holders thereof to purchase such
number of one one-hundredths of a Preferred Share as are set forth therein at the Purchase Price
set forth therein, but the Purchase Price, the number and kind of securities issuable upon exercise
of each Right and the number of Rights outstanding will be subject to adjustment as provided
herein.
5. Countersignature and Registration. (a) The Right Certificates will be executed on behalf
of the Company by any of its Chairman, its Executive Chairman or any Vice President, either
manually or by facsimile signature, and will have affixed thereto the Company’s seal or a facsimile
thereof which will be attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates will be countersigned by the Rights
Agent, either manually or by facsimile signature, and will not be valid for any purpose unless so
countersigned. In case any officer of the Company who signed any of the Right Certificates ceases
to be such an officer of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such an officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, is a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any such person was not
such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at the
principal office of the Rights Agent designated for such purpose and at such other offices as may
be required to comply with any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any stock exchange or any quotation system on which the Rights
may from time to time be listed or quoted, books for registration and transfer of the Right
Certificates issued hereunder. Such books will show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates. (a) Subject to the provisions of Sections 7(d) and 14, at any
time after the Close of Business on the Distribution Date and prior to the Expiration Date, any
Right Certificate or Right Certificates representing exercisable Rights may be transferred, split
up, combined or exchanged for another Right Certificate or
6
Right Certificates, entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or
exchange any such Right Certificate or Right Certificates must make such request in a writing
delivered to the Rights Agent and must surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon or as promptly as practicable
thereafter, subject to the provisions of Sections 7(d) and 14, the Company will prepare, execute
and deliver to the Rights Agent, and the Rights Agent will countersign and deliver, a Right
Certificate or Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Right Certificate and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and, if requested
by the Company, reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will prepare, execute and deliver a new Right Certificate of
like tenor to the Rights Agent and the Rights Agent will countersign and deliver such new Right
Certificate to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) The registered holder
of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date and prior to the Expiration
Date, upon surrender of the Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment in cash, in lawful money of the United States of
America by certified check or bank draft payable to the order of the Company, equal to the sum of
(i) the exercise price for the total number of securities as to which such surrendered Rights are
exercised and (ii) an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with the provisions of Section 9(d).
(b) Upon receipt of a Right Certificate representing exercisable Rights with the form of
election to purchase duly executed, accompanied by payment as described above, the Rights Agent
will promptly (i) requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent) certificates representing the number of one
one-hundredths of a Preferred Share to be purchased or, in the case of uncertificated shares or
other securities, requisition from any transfer agent therefor (or make available, if the Rights
Agent is the transfer agent) a notice setting forth such number of shares or other securities to be
purchased for which registration will be made on the stock transfer books of the Company (and the
Company hereby irrevocably authorizes and directs its transfer agent to comply with all such
requests), or, if the Company elects to deposit Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a Preferred Share as are to be purchased (and the
Company hereby irrevocably authorizes and directs such depositary agent to comply with all such
requests), (ii) after receipt of such certificates (or notices or depositary receipts, as the case
may be), cause the same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such holder, (iii) when
appropriate, requisition from the Company or any transfer agent therefor (or make available, if the
Rights Agent is the transfer agent) certificates representing the number of equivalent common
shares (or, in the case of uncertificated shares, a notice of the number of equivalent common
shares for which registration will be made on the stock transfer books of the Company) to be issued
in lieu of the issuance of Common Shares in accordance with the provisions of Section 11(a)(iii),
(iv) when appropriate, after receipt of such certificates or notices, cause the same to be
delivered to or upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, (v) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of the issuance of fractional shares in accordance
with the provisions of Section 14 or in lieu of the issuance of Common Shares in accordance with
the provisions of
7
Section 11(a)(iii), (vi) when appropriate, after receipt, deliver such cash to or upon the
order of the registered holder of such Right Certificate, and (vii) when appropriate, deliver any
due xxxx or other instrument provided to the Rights Agent by the Company for delivery to the
registered holder of such Right Certificate as provided by Section 11(l).
(c) In case the registered holder of any Right Certificate exercises less than all the Rights
evidenced thereby, the Company will prepare, execute and deliver a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised and the Rights Agent will countersign and
deliver such new Right Certificate to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company will be obligated to undertake any action with respect to any purported transfer, split
up, combination or exchange of any Right Certificate pursuant to Section 6 or exercise of a Right
Certificate as set forth in this Section 7 unless the registered holder of such Right Certificate
has (i) completed and signed the certificate following the form of assignment or the form of
election to purchase, as applicable, set forth on the reverse side of the Right Certificate
surrendered for such transfer, split up, combination, exchange or exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company may reasonably request.
8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for
the purpose of exercise, transfer, split up, combination or exchange will, if surrendered to the
Company or to any of its stock transfer agents, be delivered to the Rights Agent for cancellation
or in canceled form, or, if surrendered to the Rights Agent, will be canceled by it, and no Right
Certificates will be issued in lieu thereof except as expressly permitted by the provisions of this
Agreement. The Company will deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent will so cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent will deliver all canceled Right
Certificates to the Company, or will, at the written request of the Company, destroy such canceled
Right Certificates, and in such case will deliver a certificate of destruction thereof to the
Company.
9. Company Covenants Concerning Securities and Rights. The Company covenants and agrees that:
(a) It will cause to be reserved and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its treasury, a number of Preferred Shares
that will be sufficient to permit the exercise pursuant to Section 7 of all outstanding
Rights.
(b) So long as the Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) issuable upon the exercise of the Rights may
be listed on a national securities exchange, or quoted on a quotation system, it will
endeavor to cause, from and after such time as the Rights become exercisable, all securities
reserved for issuance upon the exercise of Rights to be listed on such exchange, or quoted
on such quotation system, upon official notice of issuance upon such exercise.
(c) It will take all such action as may be necessary to ensure that all Preferred
Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) delivered (or evidenced by registration on the stock transfer books of the
Company) upon exercise of Rights, at the time of delivery of the certificates for (or
registration of) such securities, will be (subject to payment of the Purchase Price) duly
authorized, validly issued, fully paid and nonassessable securities.
(d) It will pay when due and payable any and all federal and state transfer taxes and
charges that may be payable in respect of the issuance or delivery of the Right Certificates
and of any certificates representing securities issued upon the exercise of Rights (or, if
such securities are uncertificated, the registration of such securities on the stock
transfer books of the Company); provided, however, that the Company will not
be required to pay any transfer tax or charge which may be payable in respect of any
transfer or delivery of Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts representing (or the registration of)
securities issued upon the exercise of Rights in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise, or to issue or
deliver any certificates, depositary receipts or notices representing securities issued
8
upon the exercise of any Rights until any such tax or charge has been paid (any such
tax or charge being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company’s reasonable satisfaction that no
such tax is due.
(e) It will use its best efforts (i) to file on an appropriate form, as soon as
practicable following the later of the Share Acquisition Date and the Distribution Date, a
registration statement under the Securities Act with respect to the securities issuable upon
exercise of the Rights, (ii) to cause such registration statement to become effective as
soon as practicable after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities and (B) the Expiration Date. The Company will also take such action as may
be appropriate under, or to ensure compliance with, applicable state securities or “blue
sky” laws in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time after the date set forth in clause (i) of the first sentence
of this Section 9(e), the exercisability of the Rights in order to prepare and file such
registration statement and to permit it to become effective. Upon any such suspension, the
Company will 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 determines that a registration statement
should be filed under the Securities Act or any state securities laws following the
Distribution Date, the Company may temporarily suspend the exercisability of the Rights in
each relevant jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company will issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect. Notwithstanding
anything in this Agreement to the contrary, the Rights will not be exercisable in any
jurisdiction if the requisite registration or qualification in such jurisdiction has not
been effected or the exercise of the Rights is not permitted under applicable law.
(f) Notwithstanding anything in this Agreement to the contrary, after the later of the
Share Acquisition Date and the Distribution Date the Company will not take (or permit any
Subsidiary to take) any action if at the time such action is taken it is reasonably
foreseeable that such action will eliminate or otherwise diminish the benefits intended to
be afforded by the Rights.
(g) In the event that the Company is obligated to issue other securities of the Company
and/or pay cash pursuant to Section 11, 13, 14 or 24 it will make all arrangements necessary
so that such other securities and/or cash are available for distribution by the Rights
Agent, if and when appropriate.
10. Record Date. Each Person in whose name any certificate representing Preferred Shares (or
Common Shares and/or other securities, as the case may be) is issued (or in which such securities
are registered upon the stock transfer books of the Company) upon the exercise of Rights will for
all purposes be deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and such certificate
(or registration) will be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes) was
made; provided, however, that if the date of such surrender and payment is a date
upon which the transfer books of the Company for the Preferred Shares (or Common Shares and/or
other securities, as the case may be) are closed, such Person will be deemed to have become the
record holder of such securities on, and such certificate (or registration) will be dated, the next
succeeding Business Day on which the transfer books of the Company for the Preferred Shares (or
Common Shares and/or other securities, as the case may be) are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate will not be entitled to any rights of a
holder of any security for which the Rights are or may become exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions, or to exercise any
preemptive rights, and will not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
11. Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights. The
Purchase Price, the number and kind of securities issuable upon exercise of each Right and the
number of Rights outstanding are subject to adjustment from time to time as provided in this
Section 11.
9
(a) (i) In the event that the Company at any time after the Record Date (A) declares a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivides the outstanding
Preferred Shares, (C) combines the outstanding Preferred Shares into a smaller number of Preferred
Shares, or (D) issues 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/or the number and/or kind
of shares of capital stock issuable on such date upon exercise of a Right, will be proportionately
adjusted so that the holder of any Right exercised after such time is entitled to receive upon
payment of the Purchase Price then in effect the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and at a time when the
transfer books of the Company for the Preferred Shares were open, the holder of such Right would
have owned upon such exercise (and, in the case of a reclassification, would have retained after
giving effect to such reclassification) and would have 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 issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) or
Section 13, the adjustment provided for in this Section 11(a)(i) will be in addition to, and will
be made prior to, any adjustment required pursuant to Section 11(a)(ii) or Section 13.
(ii) Subject to the provisions of Section 24, if:
(A) any Person becomes an Acquiring Person; or
(B) any Acquiring Person or any Affiliate or Associate of any Acquiring Person,
directly or indirectly, (1) merges into the Company or otherwise combines with the
Company and the Company is the continuing or surviving corporation of such merger or
combination (other than in a transaction subject to Section 13), (2) merges or
otherwise combines with any Subsidiary of the Company, (3) in one or more
transactions (otherwise than in connection with the exercise, exchange or conversion
of securities exercisable or exchangeable for or convertible into shares of any
class of capital stock of the Company or any of its Subsidiaries) transfers cash,
securities or any other property to the Company or any of its Subsidiaries in
exchange (in whole or in part) for shares of any class of capital stock of the
Company or any of its Subsidiaries or for securities exercisable or exchangeable for
or convertible into shares of any class of capital stock of the Company or any of
its Subsidiaries, or otherwise obtains from the Company or any of its Subsidiaries,
with or without consideration, any additional shares of any class of capital stock
of the Company or any of its Subsidiaries or securities exercisable or exchangeable
for or convertible into shares of any class of capital stock of the Company or any
of its Subsidiaries (otherwise than as part of a pro rata distribution to all
holders of shares of any class of capital stock of the Company, or any of its
Subsidiaries), (4) sells, purchases, leases, exchanges, mortgages, pledges,
transfers or otherwise disposes (in one or more transactions) to, from, with or of,
as the case may be, the Company or any of its Subsidiaries (otherwise than in a
transaction subject to Section 13), any property, including securities, on terms and
conditions less favorable to the Company than the Company would be able to obtain in
an arm’s-length transaction with an unaffiliated third party, (5) receives any
compensation from the Company or any of its Subsidiaries other than compensation as
a director or a regular full-time employee, in either case at rates consistent with
the Company’s (or its Subsidiaries’) past practices, or (6) receives the benefit,
directly or indirectly (except proportionately as a shareholder), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits or
other tax advantage provided by the Company or any of its Subsidiaries; or
(C) during such time as there is an Acquiring Person, there is any
reclassification of securities of the Company (including any reverse stock split),
or any recapitalization of the Company, or any merger or consolidation of the
Company with any of its Subsidiaries, or any other transaction or series of
transactions involving the Company or any of its Subsidiaries (whether or not with
or into or otherwise involving an Acquiring Person), other than a transaction
subject to Section 13, which has the effect, directly or indirectly, of increasing
by more than 1%
10
the proportionate share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries, or of securities exercisable
or exchangeable for or convertible into equity securities of the Company or any of
its Subsidiaries, of which an Acquiring Person, or any Affiliate or Associate of any
Acquiring Person, is the Beneficial Owner;
then, and in each such case, from and after the latest of the Distribution
Date, the Share Acquisition Date and the date of the occurrence of such Flip-in
Event, proper provision will be made so that each holder of a Right, except as
provided below, will thereafter have the right to receive, upon exercise thereof in
accordance with the terms of this Agreement at an exercise price per Right equal to
the product of the then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable immediately
prior to the date of the occurrence of such Flip-in Event (or, if any other Flip-in
Event shall have previously occurred, the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the date of the first occurrence of a
Flip-in Event), in lieu of Preferred Shares, such number of Common Shares as equals
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 was exercisable
immediately prior to the date of the occurrence of such Flip-in Event (or, if any
other Flip-in Event shall have previously occurred, multiplying the then-current
Purchase Price by the number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the date of the first occurrence of a
Flip-in Event), and dividing that product by (y) 50% of the current per share market
price of the Class A Common Shares (determined pursuant to Section 11(d)) on the
date of the occurrence of such Flip-in Event. Notwithstanding anything in this
Agreement to the contrary, from and after the first occurrence of a Flip-in Event,
any Rights that are Beneficially Owned by (A) any Acquiring Person (or any Affiliate
or Associate of any Acquiring Person), (B) a transferee of any Acquiring Person (or
any such Affiliate or Associate) who becomes a transferee after the occurrence of a
Flip-in Event, or (C) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with the occurrence of a
Flip-in Event pursuant to either (1) a transfer from an Acquiring Person to holders
of its equity securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (2) a transfer
which the Directors of the Company have determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of this
Section 11(a)(ii), and subsequent transferees of any of such Persons, will be void
without any further action and any holder of such Rights will thereafter have no
rights whatsoever with respect to such Rights under any provision of this Agreement.
The Company will use all reasonable efforts to ensure that the provisions of this
Section 11(a)(ii) are complied with, but will have no liability to any holder of
Right Certificates or any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder. Upon the occurrence of a Flip-in Event, no Right Certificate
that represents Rights that are or have become void pursuant to the provisions of
this Section 11(a)(ii) will thereafter be issued pursuant to Section 3 or Section 6,
and any Right Certificate delivered to the Rights Agent that represents Rights that
are or have become void pursuant to the provisions of this Section 11(a)(ii) will be
canceled. Upon the occurrence of a Flip-over Event, any Rights that shall not have
been previously exercised pursuant to this Section 11(a)(ii) shall thereafter be
exercisable only pursuant to Section 13 and not pursuant to this Section 11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if there are not sufficient Common Shares
authorized but unissued or issued but not outstanding to permit the issuance of all the
Common Shares issuable in accordance with Section 11(a)(ii) upon the exercise of a Right,
the Directors of the Company will use their best efforts promptly to authorize and, subject
to the provisions of Section 9(e), make available for issuance additional Common Shares or
other equity securities of the Company having equivalent voting rights and an equivalent
value (as determined in good faith by the Directors of the Company) to the Common Shares
(for purposes of this Section 11(a)(iii), “equivalent common shares”). In the event that
equivalent common shares are so authorized, upon the exercise of a Right in accordance with
the provisions of Section 7, the registered holder will be entitled to receive (A) Common
Shares, to the
11
extent any are available, and (B) a number of equivalent common shares, which the
Directors of the Company have determined in good faith to have a value equivalent to the
excess of (x) the aggregate current per share market value on the date of the occurrence of
the most recent Flip-in Event of all the Common Shares issuable in accordance with Section
11(a)(ii) upon the exercise of a Right (the “Exercise Value”) over (y) the aggregate current
per share market value on the date of the occurrence of the most recent Flip-in Event of any
Common Shares available for issuance upon the exercise of such Right; provided,
however, that if at any time after 90 calendar days after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of the most recent
Flip-in Event, there are not sufficient Common Shares and/or equivalent common shares
available for issuance upon the exercise of a Right, then the Company will be obligated to
deliver, upon the surrender of such Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available), equivalent common shares (to the extent
available) and then cash (to the extent permitted by applicable law and any agreements or
instruments to which the Company is a party in effect immediately prior to the Share
Acquisition Date), which securities and cash have an aggregate value equal to the excess of
(1) the Exercise Value over (2) the product of the then-current Purchase Price multiplied by
the number of one one- hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the date of the occurrence of the most recent Flip-in Event (or, if any
other Flip-in Event shall have previously occurred, the product of the then-current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right
would have been exercisable immediately prior to the date of the occurrence of such Flip-in
Event if no other Flip-in Event had previously occurred). To the extent that any legal or
contractual restrictions prevent the Company from paying the full amount of cash payable in
accordance with the foregoing sentence, the Company will pay to holders of the Rights as to
which such payments are being made all amounts which are not then restricted on a pro rata
basis and will continue to make payments on a pro rata basis as promptly as funds become
available until the full amount due to each such Rights holder has been paid.
(b) In the event that the Company fixes a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them (for a period expiring within calendar
days after such record date) to subscribe for or purchase Preferred Shares (or securities having
equivalent rights, privileges and preferences as the Preferred Shares (for purposes of this Section
11(b), “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 current per share market price of the Preferred Shares (determined
pursuant to Section 11(d)) on such record date, the Purchase Price to be in effect after such
record date will be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which is the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which 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)
would purchase at such current per share market price and the denominator of which is 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 issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration part or all of which is in a
form other than cash, the value of such consideration will be as determined in good faith by the
Directors of the Company, whose determination will be described in a statement filed with the
Rights Agent. Preferred Shares owned by or held for the account of the Company will not be deemed
outstanding for the purpose of any such computation. Such adjustment will 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 will be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In the event that the Company fixes a record date for the making of a distribution to all
holders of 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, cash (other than a regular periodic cash dividend), assets, stock (other
than a dividend payable in Preferred Shares) or subscription rights, options or warrants (excluding
those referred to in Section 11(b)), the Purchase Price to be in effect after such record date will
be determined by multiplying the Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which is the current per share market price of the Preferred Shares
(as determined
12
pursuant to Section 11(d)) on such record date or, if earlier, the date on which Preferred
Shares begin to trade on an ex-dividend or when issued basis for such distribution, less the fair
market value (as determined in good faith by the Directors of the Company, whose determination will
be described in a statement filed with the Rights Agent) of the portion of the evidences of
indebtedness, cash, assets or stock so to be distributed or of such subscription rights, options or
warrants applicable to one Preferred Share, and the denominator of which is 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 issuable upon exercise of one Right. Such adjustments will be made
successively whenever such a record date is fixed; and in the event that such distribution is not
so made, the Purchase Price will again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the “current per share market price”
of Common Shares on any date will be deemed to be the average of the daily closing prices
per share of such Common Shares for the 30 consecutive Trading Days immediately prior to
such date; provided, however, that in the event that the current per share
market price of the Common Shares is determined during a period following the announcement
by the issuer of such Common Shares of (A) a dividend or distribution on such Common Shares
payable in such Common Shares or securities convertible into such Common Shares (other than
the Rights) or (B) any subdivision, combination or reclassification of such Common Shares,
and prior to 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 will be appropriately
adjusted to take into account ex-dividend trading or to reflect the current per share market
price per Common Share equivalent. The closing price for each day will 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 quotation system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Common Shares are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated quotation system
with respect to securities listed on the principal national securities exchange on which the
Common Shares are listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the 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 such market then in use, or, if on any such date the Common Shares are not
quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Shares selected by
the Directors of the Company. If the Common Shares are not publicly held or not so listed or
traded, or are not the subject of available bid and asked quotes, “current per share market
price” will mean the fair value per share as determined in good faith by the Directors of
the Company, whose determination will be described in a statement filed with the Rights
Agent.
(ii) For the purpose of any computation hereunder, the “current per share market price”
of the Preferred Shares will be determined in the same manner as set forth above for Common
Shares in Section 11(d)(i), other than the last sentence thereof. If the current per share
market price of the Preferred Shares cannot be determined in the manner provided above, the
“current per share market price” of the Preferred Shares will be conclusively deemed to be
an amount equal to the current per share market price of the Common Shares multiplied by one
hundred (as such number may be appropriately adjusted to reflect events such as stock
splits, stock dividends, recapitalizations or similar transactions relating to the Common
Shares occurring after the date of this Agreement). If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, or the subject of available bid
and asked quotes, “current per share market price” of the Preferred Shares will mean the
fair value per share as determined in good faith by the Directors of the Company, whose
determination will be described in a statement filed with the Rights Agent. For all purposes
of this Agreement, the current per share market price of one one-hundredth of a Preferred
Share will be equal to the current per share market price of one Preferred Share divided by
one hundred.
(e) Except as set forth below, no adjustment in the Purchase Price will be required unless
such adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 11(e) are
not required to be made will be carried forward and taken into
13
account in any subsequent adjustment. All calculations under this Section 11 will be made to
the nearest cent or to the nearest one one-millionth of a Preferred Share or one ten-thousandth of
a Common Share or other security, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 will be made no later than the earlier of
(i) three years from the date of the transaction which requires such adjustment and (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a), the holder of any Right
thereafter exercised becomes entitled to receive any securities of the Company other than Preferred
Shares, thereafter the number and/or kind of such other securities so receivable upon exercise of
any Right (and/or the Purchase Price in respect thereof) will 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 (and the Purchase Price in respect thereof) contained in this Section 11, and
the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares (and the
Purchase Price in respect thereof) will apply on like terms to any such other securities (and the
Purchase Price in respect thereof).
(g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder will evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a Preferred Share issuable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as provided in Section 11(i), upon each
adjustment of the Purchase Price pursuant to Section 11(b) or Section 11(c), each Right outstanding
immediately prior to the making of such adjustment will 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 Preferred Share issuable upon exercise of a Right immediately prior to
such adjustment of the Purchase Price 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 issuable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights will 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 will 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 will 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. Such record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, will be at least 10 calendar days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company will, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing, subject to the
provisions of Section 14, the additional Rights to which such holders are entitled as a result of
such adjustment, or, at the option of the Company, will cause to be distributed to such holders of
record in substitution and replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof if required by the Company, new Right Certificates
evidencing all the Rights to which such holders are entitled after such adjustment. Right
Certificates so to be distributed will be issued, executed, and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and
will be registered in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Without respect to any adjustment or change in the Purchase Price and/or the number and/or
kind of securities issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number and kind of securities
which were expressed in the initial Right Certificate issued hereunder.
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(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 or below the then par
value, if any, of any other securities of the Company issuable upon exercise of the Rights, the
Company will 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
or such other securities, as the case may be, at such adjusted Purchase Price.
(l) In any case in which this Section 11 otherwise requires that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any Right exercised after such
record date the number of Preferred Shares or other securities of the Company, if any, issuable
upon such exercise over and above the number of Preferred Shares or other securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Company delivers to such holder a due
xxxx or other appropriate instrument evidencing such holder’s right to receive such additional
Preferred Shares or other securities upon the occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary, the Company will be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that in its good faith judgment the Directors of the
Company determine to be advisable in order that any (i) consolidation or subdivision of the
Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at less than the current per
share market price therefor, (iii) issuance wholly for cash of Preferred Shares or securities which
by their terms are convertible into or exchangeable for Preferred Shares, (iv) stock dividends, or
(v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Shares is not taxable to such shareholders.
(n) Notwithstanding anything in this Agreement to the contrary, in the event that the Company
at any time after the Record Date prior to the Distribution Date (i) pays a dividend on the
outstanding Common Shares payable in Common Shares, (ii) subdivides the outstanding Common Shares,
(iii) combines the outstanding Common Shares into a smaller number of shares, or (iv) issues any
shares of its capital stock in a reclassification of the outstanding Common Shares (including any
such reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter but prior to the Distribution Date, will be
proportionately adjusted so that the number of Rights thereafter associated with each Common Share
following any such event equals the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction the numerator of which is the
total number of Common Shares outstanding immediately prior to the occurrence of the event and the
denominator of which is the total number of Common Shares outstanding immediately following the
occurrence of such event. The adjustments provided for in this Section 11(n) will be made
successively whenever such a dividend is paid or such a subdivision, combination or
reclassification is effected.
12. Certificate of Adjusted Purchase Price or Number of Securities. Whenever an adjustment is
made as provided in Section 11 or Section 13, the Company will 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 Preferred Shares and the Common
Shares a copy of such certificate, and (c) if such adjustment is made after the Distribution Date,
mail a brief summary of such adjustment to each holder of a Right Certificate in accordance with
Section 26. The Rights Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be obligated or responsible for calculating any
adjustment nor shall it be deemed to have knowledge of such adjustment unless and until it shall
have received such certificate.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. (a) In the event
that:
(i) at any time after a Person has become an Acquiring Person, the Company consolidates
with, or merges with or into, any other Person and the Company is not the continuing or
surviving corporation of such consolidation or merger; or
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(ii) at any time after a Person has become an Acquiring Person, any Person consolidates
with the Company, or merges with or into the Company, and the Company is the continuing or
surviving corporation of such merger or consolidation and, in connection with such merger or
consolidation, all or part of the Common Shares is changed into or exchanged for stock or
other securities of any other Person or cash or any other property; or
(iii) at any time after a Person has become an Acquiring Person, the Company, directly
or indirectly, sells or otherwise transfers (or one or more of its Subsidiaries sells or
otherwise transfers), in one or more transactions, assets or earning power (including
without limitation securities creating any obligation on the part of the Company and/or any
of its Subsidiaries) representing in the aggregate more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons other
than the Company or one or more of its wholly owned Subsidiaries; then, and in each such
case, proper provision will be made so that from and after the latest of the Share
Acquisition Date, the Distribution Date and the date of the occurrence of such Flip-over
Event (A) each holder of a Right thereafter has the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement at an exercise price per Right equal
to the product of the then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to
the Share Acquisition Date, such number of duly authorized, validly issued, fully paid,
nonassessable and freely tradeable Common Shares of the Issuer, free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call or first
refusal, as equals 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 exercisable
immediately prior to the Share Acquisition Date and dividing that product by (y) 50% of the
current per share market price of the Common Shares of the Issuer (determined pursuant to
Section 11(d)), on the date of the occurrence of such Flip-over Event; (B) the Issuer will
thereafter be liable for, and will assume, by virtue of the occurrence of such Flip-over
Event, all the obligations and duties of the Company pursuant to this Agreement; (C) the
term “Company” will thereafter be deemed to refer to the Issuer; and (D) the Issuer will
take such steps (including without limitation the reservation of a sufficient number of its
Common Shares to permit the exercise of all outstanding Rights) in connection with such
consummation as may be necessary to assure that the provisions hereof are thereafter
applicable, as nearly as reasonably may be possible, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) For purposes of this Section 13, “Issuer” means (i) in the case of any Flip-over Event
described in Sections 13(a)(i) or (ii) above, the Person that is the continuing, surviving,
resulting or acquiring Person (including the Company as the continuing or surviving corporation of
a transaction described in Section 13(a)(ii) above), and (ii) in the case of any Flip-over Event
described in Section 13(a)(iii) above, the Person that is the party receiving the greatest portion
of the assets or earning power (including without limitation securities creating any obligation on
the part of the Company and/or any of its Subsidiaries) transferred pursuant to such transaction or
transactions; provided, however, that, in any such case, (A) if (1) no class of
equity security of such Person is, at the time of such merger, consolidation or transaction and has
been continuously over the preceding 12-month period, registered pursuant to Section 12 of the
Exchange Act, and (2) such Person is a Subsidiary, directly or indirectly, of another Person, a
class of equity security of which is and has been so registered, the term “Issuer” means such other
Person; and (B) in case such Person is a Subsidiary, directly or indirectly, of more than one
Person, a class of equity security of two or more of which are and have been so registered, the
term “Issuer” means whichever of such Persons is the issuer of the equity security having the
greatest aggregate market value. Notwithstanding the foregoing, if the Issuer in any of the
Flip-over Events listed above is not a corporation or other legal entity having outstanding equity
securities, then, and in each such case, (x) if the Issuer is directly or indirectly wholly owned
by a corporation or other legal entity having outstanding equity securities, then all references to
Common Shares of the Issuer will be deemed to be references to the Common Shares of the corporation
or other legal entity having outstanding equity securities which ultimately controls the Issuer,
and (y) if there is no such corporation or other legal entity having outstanding equity securities,
(I) proper provision will be made so that the Issuer creates or otherwise makes available for
purposes of the exercise of the Rights in accordance with the terms of this Agreement, a kind or
kinds of security or securities having a fair market value at least equal to the economic value of
the Common Shares which each holder of a Right would have been entitled to receive if the Issuer
had been a corporation or other legal entity having outstanding equity securities; and (II) all
other provisions of this Agreement will apply to the issuer of such securities as if such
securities were Common Shares.
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(c) The Company will not consummate any Flip-over Event if, (i) at the time of or immediately
after such Flip-over Event, there are or would be any rights, warrants, instruments or securities
outstanding or any agreements or arrangements in effect which would eliminate or substantially
diminish the benefits intended to be afforded by the Rights, (ii) prior to, simultaneously with or
immediately after such Flip-over Event, the shareholders of the Person who constitutes, or would
constitute, the Issuer for purposes of Section 13(a) shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates, or (iii) the form or nature
of the organization of the Issuer would preclude or limit the exercisability of the Rights. In
addition, the Company will not consummate any Flip-over Event unless the Issuer has a sufficient
number of authorized Common Shares (or other securities as contemplated in Section 13(b) above)
which have not been issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior to such consummation the Company and the Issuer
have executed and delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in subsections (a) and (b) of this Section 13 and further providing that as promptly as
practicable after the consummation of any Flip-over Event, the Issuer will:
(A) prepare and file a registration statement under the Securities Act with
respect to the Rights and the securities issuable upon exercise of the Rights on an
appropriate form, and use its best efforts to cause such registration statement to
(1) become effective as soon as practicable after such filing and (2) remain
effective (with a prospectus at all times meeting the requirements of the Securities
Act) until the Expiration Date;
(B) take all such action as may be appropriate under, or to ensure compliance
with, applicable state securities or “blue sky” laws in connection with the
exercisability of the Rights; and
(C) deliver to holders of the Rights historical financial statements for the
Issuer and each of its Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(d) The provisions of this Section 13 will similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Flip-over Event occurs at any time
after the occurrence of a Flip-in Event, except for Rights that have become void pursuant to
Section 11(a)(ii), Rights that shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will thereafter be exercisable in the
manner provided in Section 13(a).
14. Fractional Rights and Fractional Securities. (a) The Company will not be required to
issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, the Company will pay as promptly as practicable to the registered
holders of the Right Certificates with regard to which such fractional Rights otherwise would be
issuable, an amount in cash equal to the same fraction of the current market value of one Right.
For the purposes of this Section 14(a), the current market value of one Right is the closing price
of the Rights for the Trading Day immediately prior to the date on which such fractional Rights
otherwise would have been issuable. The closing price for any day is 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 quotation system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in the principal
quotation system with respect to securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as reported by such
market 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 Directors of the Company. If the Rights are not publicly held
or are not so listed or traded, or are not the subject of available bid and asked quotes, the
current market value of one Right will mean the fair value thereof as determined in good faith by
the Directors of the Company, whose determination will be described in a statement filed with the
Rights Agent.
(b) The Company will 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
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certificates which evidence fractional Preferred Shares or to register fractional Preferred
Shares on the stock transfer books of the Company (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 provides that the holders of such
depositary receipts 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 may pay to any Person to whom or which such fractional Preferred Shares would
otherwise be issuable an amount in cash equal to the same fraction of the current market value of
one Preferred Share. For purposes of this Section 14(b), the current market value of one Preferred
Share is the closing price of the Preferred Shares (as determined in the same manner as set forth
for Common Shares in the second sentence of Section 11(d)(i)) for the Trading Day immediately prior
to the date of such exercise; provided, however, that if the closing price of the
Preferred Shares cannot be so determined, the closing price of the Preferred Shares for such
Trading Day will be conclusively deemed to be an amount equal to the closing price of the Common
Shares (determined pursuant to the second sentence of Section 11(d)(i)) for such Trading Day
multiplied by one hundred (as such number may be appropriately adjusted to reflect events such as
stock splits, stock dividends, recapitalizations or similar transactions relating to the Common
Shares occurring after the date of this Agreement); provided further,
however, that if neither the Common Shares nor the Preferred Shares are publicly held or
listed or admitted to trading on any national securities exchange, or the subject of available bid
and asked quotes, the current market value of one Preferred Share will mean the fair value thereof
as determined in good faith by the Directors of the Company, whose determination will be described
in a statement filed with the Rights Agent.
(c) Following the occurrence of a Triggering Event, the Company will not be required to issue
fractions of Common Shares or other securities issuable upon exercise or exchange of the Rights or
to distribute certificates which evidence any such fractional securities or to register fractional
Preferred Shares on the stock transfer books of the Company. In lieu of issuing any such
fractional securities, the Company may pay to any Person to whom or which such fractional
securities would otherwise be issuable an amount in cash equal to the same fraction of the current
market value of one such security. For purposes of this Section 14, the current market value of one
Common Share or other security issuable upon the exercise or exchange of Rights is the closing
price thereof (as determined in the same manner as set forth for Common Shares in the second
sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of such exercise or
exchange; provided, however, that if neither the Common Shares nor any such other
securities are publicly held or listed or admitted to trading on any national securities exchange,
or the subject of available bid and asked quotes, the current market value of one Common Share or
such other security will mean the fair value thereof as determined in good faith by the Directors
of the Company, whose determination will mean the fair value thereof as will be described in a
statement filed with the Rights Agent.
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, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the holder of any Common
Shares), may in his own behalf and for his own benefit enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under this Agreement, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to this Agreement.
16. Agreement of Rights Holders. Every holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights are transferable only in connection with
the transfer of the Common Shares;
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(b) After the Distribution Date, the Right Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the principal office of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates fully completed and executed;
(c) The Company and the Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common Share
certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate or the
associated Common Share certificate, if any, made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent will
be affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any fractional Rights and any
fractional securities upon exercise or exchange of a Right, except as otherwise provided in
Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, neither the Company nor
the Rights Agent will have any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, that the Company will use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Shareholder. No holder, as such, of any Right
Certificate will be entitled to vote, receive dividends, or be deemed for any purpose the holder of
Preferred Shares or any other securities of the Company which may at any time be issuable upon the
exercise of the Rights represented thereby, nor will anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the
rights of a shareholder of the Company or any right to vote for the election of Directors or upon
any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting shareholders (except
as provided in Section 25), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with
the provisions of this Agreement or exchanged pursuant to the provisions of Section 24.
18. Concerning the Rights Agent. (a) The Company will 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 will also indemnify the Rights Agent for, and hold it harmless against, any
loss, liability, suit, action, proceeding or expense, incurred without gross negligence, bad faith,
or willful misconduct on the part of the Rights Agent, for anything done or omitted to be done by
the Rights Agent in connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising therefrom, directly or
indirectly. The indemnity provided for herein shall survive the expiration of the Rights, the
termination of this Agreement, and the resignation or removal of the Rights Agent. The costs and
expenses of enforcing this right of indemnification shall also be paid by the Company.
(b) The Rights Agent may conclusively rely upon and will be protected and will incur no
liability for or in respect of any action taken, suffered, or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or certificate or other
notice evidencing Preferred Shares or Common Shares or other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document believed by it to be genuine and to be
signed, executed, and, where necessary, verified or acknowledged, by the proper Person or Persons.
Notwithstanding anything in this Agreement to the contrary, in no event shall the Rights Agent be
liable for special, indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of the action.
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19. Merger or Consolidation or Change of Name of Rights Agent. (a) Any corporation into
which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation succeeding to the corporate
trust business of the Rights Agent or any successor Rights Agent, will 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. If at the time such
successor Rights Agent succeeds to the agency created by this Agreement any of the Right
Certificates shall have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and if at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates will have the full force provided in the Right Certificates and in this
Agreement.
(b) If at any time the name of the Rights Agent changes and at such time any of the Right
Certificates have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so countersigned; and if at
that time any of the Right Certificates have not been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates will have the full force provided in the Right Certificates and
in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions (and no implied duties or obligations,
except the duty of good faith, shall be read into this Agreement against the Rights Agent), by all
of which the Company and the holders of Right Certificates, by their acceptance thereof, will be
bound:
(a) Before the Rights Agent acts or refrains from acting, the Rights Agent may consult with
legal counsel (who may be legal counsel for the Company), and the opinion of such counsel will be
full and complete authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights Agent deems 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, the Executive Chairman, any Vice President, the
Secretary or the Treasurer of the Company and delivered to the Rights Agent, and such certificate
will 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 will be liable hereunder only for its own gross negligence, bad faith or
willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and recitals are and will be
deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the Company of any covenant
contained in this Agreement or in any Right Certificate; nor will it be responsible for any
adjustment required under the provisions of Sections 11 or 13 (including any adjustment which
results in Rights becoming void) or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates after actual notice
of any such adjustment); nor will it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
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stock or other securities to be issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of stock or other securities will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.
(f) The Company will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any person believed in good faith by the Rights Agent
to be one of the Chairman, the Executive Chairman, 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 will not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer or for any delay in acting while
waiting for such instructions.
(h) The Rights Agent and any shareholder, director, officer or employee of the Rights Agent
may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein will preclude the Rights Agent from acting in any other capacity for
the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent will not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection and
continued employment thereof. The Rights Agent will not be under any duty or responsibility to
ensure compliance with any applicable federal or state securities laws in connection with the
issuance, transfer or exchange of Right Certificates.
(j) If, with respect to any Right Certificate surrendered to the Rights Agent for exercise,
transfer, split up, combination or exchange, either (i) the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 or 2 thereof, or (ii) any other actual or suspected
irregularity exists, the Rights Agent will not take any further action with respect to such
requested exercise, transfer, split up, combination or exchange without first consulting with the
Company, and will thereafter take further action with respect thereto only in accordance with the
Company’s written instructions.
(k) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it.
(l) The Rights Agent shall not be required to take notice or be deemed to have any notice of
any fact, event or determination (including, without limitation, any dates or events defined in
this Agreement or the designation of any Person as an Acquiring Person, Affiliate or Associate)
under this Agreement unless and until the Rights Agent shall be specifically notified in writing by
the Company of such fact, event or determination.
21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 calendar days’ notice in writing mailed to
the Company and to each transfer agent of the Preferred Shares or the Common Shares by registered
or certified mail. In the event the transfer agency relationship in effect between the Company and
the Rights Agent (or its affiliate, Computershare Investor Services, LLC) terminates, the Rights
Agent will be deemed to have resigned automatically and be discharged from its duties under this
Agreement as of the effective date of such termination, and the Company shall be responsible for
sending any required notice. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 calendar days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Preferred Shares and the Common Shares by
registered or certified mail,
21
and to the holders of the Right Certificates by first class mail. If the Rights Agent resigns
or is removed or otherwise becomes incapable of acting, the Company will appoint a successor to the
Rights Agent. If the Company fails to make such appointment within a period of 30 calendar days
after giving notice of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who will, with such notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, will be a corporation or other legal entity organized and doing business under the
laws of the United States or of any state of the United States so long as such corporation is
authorized to do business as a banking institution in such state, in good standing, which is
authorized under such laws 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, including its Affiliates, of at least
$50 million. After appointment, the successor Rights Agent will 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 will 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 will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Preferred Shares or the Common Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, will 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.
22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind of securities issuable
upon exercise of the Rights made in accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale by the Company of Common Shares following the Distribution
Date and prior to the Expiration Date, the Company (a) will, with respect to Common Shares so
issued or sold pursuant to the exercise, exchange or conversion of securities (other than Rights)
issued prior to the Distribution Date which are exercisable or exchangeable for, or convertible
into Common Shares, and (b) may, in any other case, if deemed necessary, appropriate or desirable
by the Directors of the Company, issue Right Certificates representing an equivalent number of
Rights as would have been issued in respect of such Common Shares if they had been issued or sold
prior to the Distribution Date, as appropriately adjusted as provided herein as if they had been so
issued or sold; provided, however, that (i) no such Right Certificate will be
issued if, and to the extent that, in its good faith judgment the Directors of the Company
determine that the issuance of such Right Certificate could have a material adverse tax consequence
to the Company or to the Person to whom or which such Right Certificate otherwise would be issued
and (ii) no such Right Certificate will be issued if, and to the extent that, appropriate
adjustment otherwise has been made in lieu of the issuance thereof.
23. Redemption. (a) Prior to the Expiration Date, the Directors of the Company may, at their
option, redeem all but not less than all of the then-outstanding Rights at the Redemption Price at
any time prior to the Close of Business on the later of (i) the Distribution Date and (ii) Share
Acquisition Date. Any such redemption will be effective immediately upon the action of the
Directors of the Company ordering the same, unless such action of the Directors of the Company
expressly provides that such redemption will be effective at a subsequent time or upon the
occurrence or nonoccurrence of one or more specified events (in which case such redemption will be
effective in accordance with the provisions of such action of the Directors of the Company).
(b) Immediately upon the effectiveness of the redemption of the Rights as provided in Section
23(a), 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 will be to receive the Redemption
Price, without interest thereon. Promptly after the effectiveness of the redemption of the Rights
as provided in Section 23(a), the Company will publicly announce such redemption and, within 10
calendar days thereafter, will give notice of such redemption to the holders of the
then-outstanding Rights by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Company; provided, however, that the failure
to give, or any defect in, any such notice will not affect the validity of the redemption of the
Rights. Any notice that is mailed in the manner herein provided will be deemed given, whether or
not the holder receives the notice. The notice of redemption
22
mailed to the holders of Rights will state the method by which the payment of the Redemption
Price will be made. The Company may, at its option, pay the Redemption Price in cash, Common Shares
(based upon the current per share market price of the Common Shares (determined pursuant to Section
11(d)) at the time of redemption), or any other form of consideration deemed appropriate by the
Directors of the Company (based upon the fair market value of such other consideration, determined
by the Directors of the Company in good faith) or any combination thereof. The Company may, at its
option, combine the payment of the Redemption Price with any other payment being made concurrently
to holders of Common Shares and, to the extent that any such other payment is discretionary, may
reduce the amount thereof on account of the concurrent payment of the Redemption Price. If legal or
contractual restrictions prevent the Company from paying the Redemption Price (in the form of
consideration deemed appropriate by the Directors) at the time of redemption, the Company will pay
the Redemption Price, without interest, promptly after such time as the Company ceases to be so
prevented from paying the Redemption Price.
24. Exchange. (a) The Directors of the Company may, at their option, at any time after the
Share Acquisition Date, exchange all or part of the then-outstanding and exercisable Rights (which
will not include Rights that have become void pursuant to the provisions of Section 11(a)(ii)) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the Record Date (such
exchange ratio being hereinafter referred to as the “Exchange Ratio”). Any such exchange will be
effective immediately upon the action of the Directors of the Company ordering the same, unless
such action of the Directors of the Company expressly provides that such exchange will be effective
at a subsequent time or upon the occurrence or nonoccurrence of one or more specified events (in
which case such exchange will be effective in accordance with the provisions of such action of the
Directors of the Company). Notwithstanding the foregoing, the Directors of the Company will not be
empowered to effect such exchange at any time after any Person (other than the Company or any
Related Person), who or which, together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the then-outstanding Common Shares.
(b) Immediately upon the effectiveness of the exchange of any Rights as provided in Section
24(a), and without any further action and without any notice, the right to exercise such Rights
will terminate and the only right with respect to such Rights thereafter of the holder of such
Rights will be to receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. Promptly after the effectiveness of the exchange of
any Rights as provided in Section 24(a), the Company will publicly announce such exchange and,
within 10 calendar days thereafter, will give notice of such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the Rights Agent;
provided, however, that the failure to give, or any defect in, such notice will not
affect the validity of such exchange. Any notice that is mailed in the manner herein provided will
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 for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange
will be effected pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute
for any Common Share exchangeable for a Right (i) equivalent common shares (as such term is used in
Section 11(a)(iii)), (ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value, as determined in good faith
by the Directors of the Company (whose determination will be described in a statement filed with
the Rights Agent), equal to the current market value of one Common Share (determined pursuant to
Section 11(d)) on the Trading Day immediately preceding the date of the effectiveness of the
exchange pursuant to this Section 24.
25. Notice of Certain Events. (a) If, after the Distribution Date, the Company proposes (i)
to pay any dividend payable in stock of any class to the holders of Preferred Shares or to make any
other distribution to the holders of Preferred Shares (other than a regular periodic cash
dividend), (ii) to offer to the holders of Preferred Shares rights, options 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 assets or earning power (including,
23
without limitation, securities creating any obligation on the part of the Company and/or any
of its Subsidiaries) representing more than 50% of the assets and earning power of the Company and
its Subsidiaries, taken as a whole, to any other Person or Persons other than the Company or one or
more of its wholly owned Subsidiaries, (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 reclassification of the Common Shares then, in each such
case, the Company will give to each holder of a Right Certificate, to the extent feasible and in
accordance with Section 26, a notice of such proposed action, which specifies the record date for
the purposes of such stock dividend, distribution or offering of rights, options or warrants, or
the date on which such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein by the holders of
the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice will be
so given, in the case of any action covered by clause (i) or (ii) above, at least 10 calendar days
prior to the record date for determining holders of the Preferred Shares for purposes of such
action, and, in the case of any such other action, at least 10 calendar days prior to the date of
the taking of such proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever is the earlier.
(b) In case any Triggering Event occurs, then, in any such case, the Company will as soon as
practicable thereafter give to the Rights Agent and each holder of a Right Certificate, in
accordance with Section 26, a notice of the occurrence of such event, which specifies the event and
the consequences of the event to holders of Rights.
(c) Notwithstanding anything in this Agreement to the contrary, prior to the Distribution
Date, a filing by the Company with the Securities and Exchange Commission shall constitute
sufficient notice to the holders of any Rights or of any Common Shares for purposes of this
Agreement.
26. Notices. (a) Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the Company will be sufficiently
given or made if sent by overnight delivery service or first class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
The X. X. Xxxxxxx Company
Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Executive Chairman and Co-Chief Executive Officer
Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Executive Chairman and Co-Chief Executive Officer
(b) Subject to the provisions of Section 21 hereof, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the
Rights Agent will be sufficiently given or made if sent by overnight delivery service or
first-class mail, postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Computershare Trust Company, N.A.
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Client Services
0 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Client Services
(c) Notices or demands authorized by this Agreement to be given or made by the Company or the
Rights Agent to the holder of any Right Certificate (or, if prior the Distribution Date, to the
holder of any certificate evidencing Common Shares) will 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.
27. Supplements and Amendments. Prior to the time at which the Rights cease to be redeemable
pursuant to Section 23, and subject to the last sentence of this Section 27, the Company may in its
sole and absolute discretion, and the Rights Agent will if the Company so directs and at the
expense of the Company, supplement or amend any provision of this Agreement in any respect without
the approval of any holders of Rights or Common Shares. From and after the time at which the Rights
cease to be redeemable pursuant to Section 23, and subject to
24
the last sentence of this Section 27, the Company may, and the Rights Agent will if the
Company so directs and at the expense of the Company, supplement or amend this Agreement without
the approval of any holders of Rights or Common Shares in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to
supplement or amend the provisions hereunder in any manner which the Company may deem desirable;
provided, however, that no such supplement or amendment shall adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), and no such supplement or amendment shall cause the Rights again
to become redeemable or cause this Agreement again to become supplementable or amendable otherwise
than in accordance with the provisions of this sentence. Without limiting the generality or effect
of the foregoing, this Agreement may be supplemented or amended to provide for such voting powers
for the Rights and such procedures for the exercise thereof, if any, as the Directors of the
Company may determine to be appropriate. Upon the delivery of a certificate from an officer of the
Company which states that the proposed supplement or amendment is in compliance with the terms of
this Section 27, the Rights Agent will execute such supplement or amendment; provided,
however, that the failure or refusal of the Rights Agent to execute such supplement or
amendment will not affect the validity of any supplement or amendment adopted by the Directors of
the Company. Notwithstanding anything in this Agreement to the contrary, the limitations on the
ability of the Directors to amend this Agreement set forth in this Section 27 shall not affect the
power or ability of the Directors to take any other action that is consistent with their fiduciary
duties under Ohio law, including without limitation accelerating or extending the Expiration Date
or making any other amendment to this Agreement that is permitted by this Section 27 or adopting a
new shareholder rights plan with such terms as the Directors determine in their sole discretion to
be appropriate. Notwithstanding anything in this Agreement to the contrary, (i) no supplement or
amendment may be made which decreases the stated Redemption Price to an amount less than $0.001 per
Right, and (ii) no supplement or amendment that changes the rights and duties of the Rights Agent
under this Agreement will be effective against the Rights Agent without the execution of such
supplement or amendment by the Rights Agent.
28. Successors; Certain Covenants. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent will be binding on and inure to the benefit of
their respective successors and assigns hereunder.
29. Benefits of This Agreement. Nothing in this Agreement will be construed to give to any
Person other than the Company, the Rights Agent, and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement. This Agreement will be for the sole and exclusive benefit of
the Company, the Rights Agent, and the registered holders of the Right Certificates (or prior to
the Distribution Date, the Common Shares).
30. Governing Law. This Agreement, each Right and each Right Certificate issued hereunder
will be deemed to be a contract made under the internal substantive laws of the State of Ohio and
for all purposes will be governed by and construed in accordance with the internal substantive laws
of such State applicable to contracts to be made and performed entirely within such State, except
as to the rights and obligations of the Rights Agent, which shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
31. Severability. If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement will remain in
full force and effect and will in no way be affected, impaired or invalidated; provided,
however, that nothing contained in this Section 31 will affect the ability of the Company
under the provisions of Section 27 to supplement or amend this Agreement to replace such invalid,
void or unenforceable term, provision, covenant or restriction with a legal, valid and enforceable
term, provision, covenant or restriction.
32. Descriptive Headings, Etc. Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and will not control or affect the meaning or construction of any
of the provisions hereof. Unless otherwise expressly provided, references herein to Articles,
Sections, Schedules and Exhibits are to Articles, Sections, Schedules and Exhibits of or to this
Agreement.
25
33. Determinations and Actions By the Directors. For all purposes of this Agreement, any
calculation of the number of Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common Shares of which any
Person is the Beneficial Owner, will be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Directors of the
Company will have the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Directors of the Company or to the Company, or as
may be necessary or advisable in the administration of this Agreement, including without limitation
the right and power (i) to interpret the provisions of this Agreement (including without limitation
Section 27, this Section 33 and other provisions hereof relating to its powers or authority
hereunder), (ii) to make all determinations deemed necessary, advisable or appropriate for the
administration of this Agreement (including without limitation any determination contemplated by
Section 1(a) or any determination as to whether particular Rights shall have become void), and
(iii) to develop, prescribe and implement any procedures and arrangements they deem to be
necessary, advisable or appropriate for the administration of this Agreement (including without
limitation for or relating to the exercise or exchange of Rights). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below, any omission with
respect to any of the foregoing) which are done or made by the Directors of the Company in good
faith will (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties and (y) not subject the Directors of the Company to any liability
to any Person, including without limitation the Rights Agent and the holders of the Rights.
34. Counterparts. This Agreement may be executed in any number of counterparts and each of
such counterparts will for all purposes be deemed to be an original, and all such counterparts will
together constitute but one and the same instrument. A signature to this Agreement transmitted
electronically shall have the same authority, effect, and enforceability as an original signature.
35. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights
Agent shall not be liable for any delays or failures in performance resulting from acts beyond its
reasonable control, including, without limitation, acts of God, terrorist acts, shortage of supply,
breakdowns or malfunctions, interruptions or malfunction of computer facilities, or loss of data
due to power failures or mechanical difficulties with information storage or retrieval systems,
labor difficulties, war, or civil unrest.
26
| THE X. X. XXXXXXX COMPANY |
||||
| By: | /s/ M. Xxx Xxxxxx | |||
| Name: | M. Xxx Xxxxxx | |||
| Title: | Vice President and General Counsel | |||
| COMPUTERSHARE TRUST COMPANY, N.A., as Rights Agent |
||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Name: | Xxxxxxx X. Xxxx | |||
| Title: | Senior Vice President | |||
27
EXHIBIT A
FORM OF CERTIFICATE
OF ADOPTION OF AMENDMENT
TO AMENDED ARTICLES OF INCORPORATION
OF ADOPTION OF AMENDMENT
TO AMENDED ARTICLES OF INCORPORATION
OF
THE X. X. XXXXXXX COMPANY
We, Xxxxxxx X. Xxxxxxx, Executive Chairman and Co-Chief Executive Officer, and Xxxxxxxxx X.
Xxxxxxx, Corporate Secretary, of The X. X. Xxxxxxx Company, an Ohio corporation (the “Company”), do
hereby certify that pursuant to the authority conferred upon the Directors of the Company (the
“Directors”) by the Amended Articles of Incorporation of the Company, the Directors at a meeting
duly called and held on May 20, 2009 at which a quorum was present and acting throughout, adopted
the following resolution to amend the Amended Articles of Incorporation of the Company pursuant to
Section 1701.70(B)(1) of the Ohio Revised Code:
RESOLVED, that Division I-A of Article Fourth of the Amended Articles of Incorporation of the
Company be, and it hereby is, amended and restated in its entirety as follows:
Section 1. There is established hereby a series of Serial Preferred Shares that shall
be designated Series A Junior Participating Preferred Shares (hereinafter sometimes called this
“Series” or the “Series A Junior Participating Preferred Shares”) and that shall have the terms set
forth in this Division I-A.
Section 2. The number of shares of this Series shall be 1,500,000.
Section 3. (a) The holders of record of Series A Junior Participating Preferred
Shares shall be entitled to receive, when and as declared by the Directors in accordance with the
terms hereof, out of funds legally available for the purpose, cumulative quarterly dividends
payable in cash on the first day of March, June, September, and December in each year (each such
date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a Series A Junior Participating
Preferred Share or fraction of a Series A Junior Participating Preferred Share. Such quarterly
dividend payments shall be in an amount per share (rounded to the nearest cent) equal to the
greater of (i) $1.00 per share or (ii) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, plus 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other distributions (other than a
dividend payable in Common Shares, or a subdivision of the outstanding Common Shares (by
reclassification or otherwise)), declared on the Common Shares since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any Series A Junior Participating Preferred Share or fraction of a
Series A Junior Participating Preferred Share. In the event the Company shall at any time declare
or pay any dividend on the Common Shares payable in Common Shares, or effect a subdivision or
combination or consolidation of the outstanding Common Shares (by reclassification or otherwise
than by payment of a dividend in Common Shares) into a greater or lesser number of Common Shares,
then in each such case the amount to which holders of Series A Junior Participating Preferred
Shares were entitled immediately prior to such event under clause (ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator of which is the number
of Common Shares that were outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on outstanding Series A Junior
Participating Preferred Shares from the Quarterly Dividend Payment Date next preceding the date of
issue of such Series A Junior Participating Preferred Shares, unless (i) the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of
A-1
issue of such shares, or (ii) the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series A Junior
Participating Preferred Shares entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. No dividends shall be paid upon or declared and set apart for any Series A Junior
Participating Preferred Shares for any dividend period unless at the same time a dividend for the
same dividend period, ratably in proportion to the respective annual dividend rates fixed therefor,
shall be paid upon or declared and set apart for all Serial Preferred Shares of all series then
outstanding and entitled to receive such dividend. The Directors may fix a record date for the
determination of holders of Series A Junior Participating Preferred Shares entitled to receive
payment of a dividend or distribution declared thereon, which record date shall be no more than 40
days prior to the date fixed for the payment thereof.
Section 4. The Series A Junior Participating Preferred Shares are not redeemable.
Section 5. (a) In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Company (hereinafter referred to as a “Liquidation”), no
distribution shall be made to the holders of shares of stock ranking junior (either as to dividends
or upon Liquidation) to the Series A Junior Participating Preferred Shares, unless, prior thereto,
the holders of Series A Junior Participating Preferred Shares shall have received at least an
amount per share equal to 100 times the then applicable Purchase Price as defined in the Rights
Agreement dated as of May 20, 2009, between the Company and Computershare Trust Company, N.A., as
the same may be from time to time amended in accordance with its terms (which Purchase Price is
$140.00 as of May 20, 2009), subject to adjustment from time to time as provided in the Rights
Agreement, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether
or not earned or declared, to the date of such payment, provided that the holders of Series A
Junior Participating Preferred Shares shall be entitled to receive at least an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of Common Shares (the “Series A Junior
Participating Preferred Shares Liquidation Preference”).
(b) In the event, however, that the net assets of the Company are not sufficient to pay in
full the amount of the Series A Junior Participating Preferred Shares Liquidation Preference and
the liquidation preferences of all other series of Serial Preferred Shares, if any, which rank on a
parity with the Series A Junior Participating Preferred Shares as to distribution of assets in
Liquidation, all shares of this Series and of such other series of Serial Preferred Shares shall
share ratably in the distribution of assets (or proceeds thereof) in Liquidation in proportion to
the full amounts to which they are respectively entitled.
(c) In the event the Company shall at any time declare or pay any dividend on the Common
Shares payable in Common Shares, or effect a subdivision or combination or consolidation of the
outstanding Common Shares (by reclassification or otherwise than by payment of a dividend in Common
Shares) into a greater or lesser number of Common Shares, then in each such case the amount to
which holders of Series A Junior Participating Preferred Shares were entitled immediately prior to
such event pursuant to the proviso set forth in paragraph (a) above, shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the number of Common
Shares that were outstanding immediately prior to such event.
(d) The merger or consolidation of the Company into or with any other corporation, or the
merger of any other corporation into it, or the sale, lease or conveyance of all or substantially
all the property or business of the Company, shall not be deemed to be a Liquidation for the
purpose of this Section 5.
Section 6. The Series A Junior Participating Preferred Shares shall not be
convertible into Common Shares.
A-2
| Xxxxxxx X. Xxxxxxx | ||||
| Executive Chairman and Co-Chief Executive Officer | ||||
| Xxxxxxxxx X. Xxxxxxx | ||||
| Corporate Secretary | ||||
A-3
EXHIBIT B
FORM OF RIGHT CERTIFICATE
| Certificate No. R- | Rights |
NOT EXERCISABLE AFTER JUNE 2, 2019 (SUBJECT TO POSSIBLE EXTENSION AT
THE OPTION OF THE COMPANY) OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED. THE
RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
TRANSFEREE THEREOF MAY BECOME NULL AND VOID.
Right Certificate
This certifies that , or registered assigns, is the registered owner of the
number of Rights set forth above, each of which entitles the owner thereof, subject to the terms,
provisions, and conditions of the Rights Agreement, dated as of May 20, 2009, as it may be amended
from time to time (the “Rights Agreement”), between The X. X. Xxxxxxx Company, an Ohio corporation
(the “Company”), and Computershare Trust Company, N.A., as rights agent (the “Rights Agent”), to
purchase from the Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 p.m. (Eastern time) on the Expiration Date (as such term is
defined in the Rights Agreement) at the principal office or offices of the Rights Agent designated
for such purpose, one one-hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Shares, without par value (the “Preferred Shares”), of the Company, at a
purchase price of $140.00 per one one-hundredth of a Preferred Share (the “Purchase Price”), upon
presentation and surrender of this Right Certificate with the Form of Election to Purchase and
related Certificate duly executed. If this Right Certificate is exercised in part, the holder will
be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for
the number of whole Rights not exercised. The number of Rights evidenced by this Right Certificate
(and the number of one one-hundredths of a Preferred Share which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price
as of the date of the Rights Agreement, based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and/or the number and/or kind of
securities issuable upon the exercise of the Rights evidenced by this Right Certificate are subject
to adjustment upon the occurrence of certain events.
This Right Certificate is subject to all of the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities of the Rights Agent, the
Company and the holders of the Right Certificates, which limitations of rights include the
temporary suspension of the exercisability of the Rights under the circumstances specified in the
Rights Agreement. Copies of the Rights Agreement are on file at the above- mentioned office of the
Rights Agent and can be obtained from the Company without charge upon written request therefor.
Terms used herein with initial capital letters and not defined herein are used herein with the
meanings ascribed thereto in the Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence of a Flip-in Event, any Rights
that are Beneficially Owned by (i) any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (ii) a transferee of any Acquiring Person (or any such Affiliate or Associate)
who becomes a transferee after the occurrence of a Flip-in Event, or (iii) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or
concurrently with the Flip-in Event pursuant to either (a) a transfer from an Acquiring Person to
holders of its equity securities or to any Person with whom it has any continuing agreement,
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arrangement or understanding regarding the transferred Rights or (b) a transfer which the
Directors of the Company have determined is part of a plan, arrangement or understanding which has
the purpose or effect of avoiding certain provisions of the Rights Agreement, and subsequent
transferees of any of such Persons, will be void without any further action and any holder of such
Rights will thereafter have no rights whatsoever with respect to such Rights under any provision of
the Rights Agreement. From and after the occurrence of a Flip-in Event, no Right Certificate will
be issued that represents Rights that are or have become void pursuant to the provisions of the
Rights Agreement, and any Right Certificate delivered to the Rights Agent that represents Rights
that are or have become void pursuant to the provisions of the Rights Agreement will be canceled.
This Right Certificate, with or without other Right Certificates, may be transferred, split
up, combined or exchanged for another Right Certificate or Right Certificates entitling the holder
to purchase a like number of one one-hundredths of a Preferred Share (or other securities, as the
case may be) as the Right Certificate or Right Certificates surrendered entitled such holder (or
former holder in the case of a transfer) to purchase, upon presentation and surrender hereof at the
principal office of the Rights Agent designated for such purpose, with the Form of Assignment (if
appropriate) and the related Certificate duly executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $.01 per Right or may be
exchanged in whole or in part. The Rights Agreement may be supplemented and amended by the Company,
as provided therein.
The Company is not required to issue fractions of Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred Share, which may, at the option of the
Company, be evidenced by depositary receipts) or other securities issuable upon the exercise of any
Right or Rights evidenced hereby. In lieu of issuing such fractional Preferred Shares or other
securities, the Company may make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, will 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 upon the exercise of the Right or Rights represented
hereby, nor will anything contained herein or in the Rights Agreement be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate have been exercised in accordance with the provisions of the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose until it has been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of , .
| ATTEST: | THE X. X. XXXXXXX COMPANY | |||||||||
By:
|
By: | |||||||||
| Secretary | Name: | |||||||||
| Title: | ||||||||||
| Countersigned: | ||||||||||
| COMPUTERSHARE TRUST COMPANY, N.A., | ||||||||||
| as Rights Agent | ||||||||||
By: |
||||||||||
| Authorized Signature | ||||||||||
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, hereby sells, assigns and transfers unto
| Dated: , | ||||
| Signature | ||||
Medallion Signature Guaranteed:
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The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not being sold, assigned,
transferred, split up, combined or exchanged by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
| Dated: , | ||||
| Signature | ||||
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
exercise the Right Certificate)
The undersigned hereby irrevocably elects to exercise Rights represented by this
Right Certificate to purchase the one one-hundredths of a Preferred Share or other securities
issuable upon the exercise of such Rights and requests that certificates for such securities be
issued in the name of and delivered to:
| Please insert social security or other identifying number: |
If such number of Rights is not all the Rights evidenced by this Right Certificate, a new
Right Certificate for the balance remaining of such Rights will be registered in the name of and
delivered to:
| Please insert social security number: |
| Dated: , | ||||
| Signature | ||||
Medallion Signature Guaranteed:
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The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not being exercised by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is, was, or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
| Dated: , | ||||
| Signature | ||||
NOTICE
SIGNATURES ON THE FOREGOING FORM OF ASSIGNMENT AND FORM OF ELECTION TO PURCHASE AND IN THE
RELATED CERTIFICATES MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THIS RIGHT CERTIFICATE
IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER.
SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE
PROGRAM) PURSUANT TO RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On May 20, 2009, the Directors of The X. X. Xxxxxxx Company adopted a rights plan and declared
a dividend of one preferred share purchase right for each outstanding common share, without par
value (the “common shares”). The dividend is payable on June 2, 2009 to our shareholders of record
on that date. The terms of the rights and the rights plan are set forth in a Rights Agreement,
dated as of May 20, 2009, as it may be amended from time to time, by and between The X. X. Xxxxxxx
Company and Computershare Trust Company, N.A., as rights agent.
Our Directors adopted the rights plan to protect our shareholders from coercive takeover
practices or takeover bids that are inconsistent with their best interests. In general terms, the
rights plan imposes a significant penalty upon any person or group that acquires beneficial
ownership of 10% or more of our outstanding common shares without the prior approval of our
Directors. A person or group that acquires beneficial ownership of a percentage of our common
shares in excess of that threshold is called an “acquiring person.” Any rights held by an
acquiring person are void and may not be exercised. The term “beneficial ownership” is defined in
the rights plan and includes, among other things, certain derivative or synthetic arrangements
having characteristics of a long position in common shares.
This summary of rights provides a general description of the rights plan. Because it is only
a summary, this description should be read together with the entire rights plan, which we
incorporate in this summary by reference. We have filed the rights plan with the Securities and
Exchange Commission as an exhibit to a registration statement on Form 8-A. Upon written request,
we will provide a copy of the rights plan free of charge to any shareholder.
The Rights. Our Directors authorized the issuance of one right per each outstanding common share
on June 2, 2009. If the rights become exercisable, each right would allow its holder to purchase
from us one one-hundredth of a Series A Junior Participating Preferred Share for a purchase price
of $140.00. Each fractional preferred share would give the shareholder approximately the same
dividend, voting and liquidation rights as does one of our common shares. Prior to exercise,
however, a right does not give its holder any dividend, voting or liquidation rights.
Exercisability. The rights will not be exercisable until the earlier of:
| • | 10 days after a public announcement by The X. X. Xxxxxxx Company that a person or group has become an acquiring person; and | ||
| • | 10 business days (or a later date determined by our Directors) after a person or group begins a tender or exchange offer that, if completed, would result in that person or group becoming an acquiring person. |
We refer to the date that the rights become exercisable as the “distribution date.” Until the
distribution date, our common share certificates will also evidence the rights and will contain a
notation to that effect. Any transfer of common shares prior to the distribution date will
constitute a transfer of the associated rights. After the distribution date, the rights will
separate from the common shares and be evidenced by right certificates, which we will mail to all
holders of rights that have not become void.
Flip-In Event. After the distribution date, if a person or group already is or becomes an
acquiring person, all holders of rights, except the acquiring person, may exercise their rights
upon payment of the purchase price to purchase our common shares (or other securities or assets as
determined by our Directors) with a market value of two times the purchase price.
Flip-Over Event. After the distribution date, if a flip-in event has already occurred and The
X. X. Xxxxxxx Company is acquired in a merger or similar transaction, all holders of rights except
the acquiring person may
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exercise their rights upon payment of the purchase price to purchase shares of the acquiring
corporation with a market value of two times the purchase price of the rights.
Rights may be exercised to purchase our preferred shares only after the distribution date
occurs and prior to the occurrence of a flip-in event as described above. A distribution date
resulting from the commencement of a tender offer or exchange offer described in the second bullet
point above could precede the occurrence of a flip-in event, in which case the rights could be
exercised to purchase our preferred shares. A distribution date resulting from any occurrence
described in the first bullet point above would necessarily follow the occurrence of a flip-in
event, in which case the rights could be exercised to purchase common shares or other securities as
described above.
Expiration. The rights will expire on the tenth anniversary of their distribution unless earlier
redeemed or exchanged.
Redemption. Our Directors may redeem all (but not less than all) of the rights for a redemption
price of $0.001 per right (subject to adjustment) at any time before the later of the distribution
date and the date of the first public announcement by The X. X. Xxxxxxx Company that a person or
group has become an acquiring person. Once the rights are redeemed, the right to exercise rights
will terminate, and the only right of the holders of rights will be to receive the redemption
price.
Exchange. After the later of the distribution date and the date of the first public announcement
by The X. X. Xxxxxxx Company that a person or group has become an acquiring person, but before an
acquiring person owns 50% or more of our outstanding common shares, our Directors may exchange each
right (other than rights that have become void) for one common share or an equivalent security.
Anti-Dilution Provisions. Our Directors may adjust the purchase price of the preferred shares, the
number of preferred shares issuable and the number of outstanding rights to prevent dilution that
may occur as a result of certain events, including among others, a stock dividend, a stock split or
a reclassification of the preferred shares or our common shares. No adjustments to the purchase
price of less than 1% will be made.
Amendments. Before the time rights cease to be redeemable, our Directors may amend or supplement
the rights plan without the consent of the holders of the rights, except that no amendment may
decrease the redemption price below $0.001 per right. At any time thereafter, our Directors may
amend or supplement the rights plan only to cure an ambiguity, to alter time period provisions, to
correct inconsistent provisions or to make any additional changes to the rights plan, but only to
the extent that those changes do not impair or adversely affect any rights holder and do not result
in the rights again becoming redeemable. The limitations on our Directors’ ability to amend the
rights plan does not affect our Directors’ power or ability to take any other action that is
consistent with their fiduciary duties, including without limitation accelerating or extending the
expiration date of the rights, making any amendment to the rights plan that is permitted by the
rights plan or adopting a new rights plan with such terms as our Directors determine in their sole
discretion to be appropriate.
* * *
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