EXECUTION VERSION
RIGHTS AGREEMENT
Dated as of October 12, 2001
by and among
FRESH BRANDS, INC.
and
FIRSTAR BANK, N.A.
Rights Agent
TABLE OF CONTENTS
Page
Section 1. Certain Definitions..............................................1
Section 2. Appointment of Rights Agent......................................3
Section 3. Issue of Right Certificates......................................4
Section 4. Form of Right Certificates.......................................5
Section 5. Countersignature and Registration................................6
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.....................................................6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....7
Section 8. Cancellation and Destruction of Right Certificates...............8
Section 9. Reservation and Availability of Common Shares....................9
Section 10. Common Shares Record Date........................................9
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights................................................10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......16
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer
of Assets or Earning Power......................................17
Section 14. Fractional Rights and Fractional Shares.........................19
Section 15. Rights of Action................................................20
Section 16. Agreement of Right Holders......................................20
Section 17. Right Certificate Holder Not Deemed a Shareholder...............21
Section 18. Concerning the Rights Agent.....................................21
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......22
Section 20. Duties of Rights Agent..........................................22
Section 21. Change of Rights Agent..........................................24
Section 22. Issuance of New Right Certificates..............................25
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Section 23. Redemption......................................................25
Section 24. Exchange........................................................26
Section 25. Notice of Certain Events........................................27
Section 26. Notices.........................................................28
Section 27. Supplements and Amendments......................................29
Section 28. Successors......................................................29
Section 29. Benefits of this Agreement......................................29
Section 30. Severability....................................................29
Section 31. Governing Law...................................................30
Section 32. Counterparts....................................................30
Section 33. Descriptive Headings............................................30
Section 34. Determinations and Actions by the Board of Directors............30
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
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RIGHTS AGREEMENT
----------------
This Agreement, is dated as of October 12, 2001, between Fresh Brands,
Inc., a Wisconsin corporation (the "Company"), and Firstar Bank, N.A.,
Milwaukee, Wisconsin, a National Banking Association (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one common share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company outstanding on November 9,
2001 (the "Record Date") payable on November 23, 2001 (the "Payment Date"), and
has authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined), each Right representing the right
to purchase one Common Share of the Company, subject to adjustment as
hereinafter provided, and upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 20% or more of the Common Shares then outstanding, but shall not
include the Company, any Subsidiary of the Company or any employee benefit
plan of the Company or any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan, or any
trustee, administrator or fiduciary of such a plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing the number
of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 20% or more of the Common Shares then
outstanding; provided, however, that if a Person becomes the Beneficial
Owner of 20% or more of the Common Shares then outstanding by reason of
share purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional Common Shares (other
than Common Shares acquired solely as a result of corporate action of the
Company not caused, directly or indirectly, by such Person), then such
Person shall be deemed to be an "Acquiring Person." Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), has
become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would
no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to
be an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by 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 (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation 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
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of, or with respect to,
acquiring, holding, voting (except to the extent contemplated by the
proviso to Section l(c)(ii)(B)) or disposing of any securities of the
Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which
such Person would be deemed to beneficially own hereunder.
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(d) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of Wisconsin are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Milwaukee, Wisconsin, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Milwaukee, Wisconsin time, on
the next succeeding Business Day.
(f) Unless the context of the reference expressly indicated otherwise,
"Common Shares" shall mean the shares of common stock, par value $.05, of
the Company, or shares having equivalent rights, privileges and preferences
to common stock. "Common Shares" when used with reference to any Person
other than the Company shall mean the capital stock (or equivalent equity
interest) with the greatest voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation, limited
liability company, trust or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(j) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(k) "Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include, without
limitation, a report filed or amended pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(l) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. No such appointment shall change or increase the Rights
Agent's duties, liabilities or obligations under this Agreement. The Rights
Agent shall have no duty to supervise, and in no event shall the Rights Agent be
liable for, the acts or omissions of any such co-Rights Agent appointed by the
Company.
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Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth Business Day (or such later date as may
be determined by action of the Company's Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement of, or of the first public announcement of the intention of
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company,
any entity holding Common Shares for or pursuant to the terms of any such
plan, or any trustee, administrator, or fiduciary of such a plan) to
commence, a tender or exchange offer the consummation of which would result
in any Person becoming the Beneficial Owner of Common Shares aggregating
20% or more of the then outstanding Common Shares (including in either case
any such date which is after the date of this Agreement and prior to the
Payment Date; the earlier of such dates being herein referred to as the
"Distribution Date"; provided, however, that if the tenth day or Business
Day, as the case may be, after the pertinent date occurs before the Record
Date, "Distribution Date" shall mean the Record Date), (x) the Rights will
be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates)
and not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of
Common Shares. If the Rights Agent is not then the Transfer Agent and
Registrar of the Common Shares, then upon the occurrence of a Distribution
Date, the Company shall promptly notify the Rights Agent and request a
stockholder list from the Company's Transfer Agent. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause to be
sent (and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit A hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On or before the Payment Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase
Common Shares, in substantially the form of Exhibit B hereto (the "Summary
of Rights"), by first class, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof. Until the Distribution Date
(or the earlier of the Redemption Date or Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on
the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby.
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(c) Certificates for Common Shares which become outstanding
(including, without limitation, certificates for reacquired Common Shares
referred to in the last sentence of this paragraph (c) and certificates
issued on the transfer of Common Shares) after the Record Date but prior to
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them a legend in substantially the following form:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between Fresh Brands, Inc. and Firstar Bank, N.A., dated as
of October 12, 2001, and as such agreement may be amended
(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 Fresh Brands,
Inc. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Fresh Brands, Inc. will mail to the holder of
this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether held by such Person or any
subsequent holder shall become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Common Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate (which do not
affect the duties or responsibilities of the Rights Agent) 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 on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of Common Shares as shall be set forth
therein at the price per Common Share set forth therein (the "Purchase Price"),
but the amount and type of securities purchasable upon exercise of each Right
and the Purchase Price shall be subject to adjustment as provided herein.
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Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or any Vice President, either
manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any
of the Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the individual who signed such Right
Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at
the date of the execution of this Rights Agreement any such individual was
not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its designated office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date and certificate number of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14 hereof, at any time after
the close of business on the Distribution Date, and at or prior to the
close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void pursuant to
Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of Common Shares as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at
the principal office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination
or exchange of Right Certificates. The Rights Agent shall have no duty or
obligation to take any action under any Section of this Agreement which
requires the
6
payment by a Rights holder of applicable taxes and governmental charges
unless and until the Rights Agent is satisfied that all such taxes and/or
charges have been paid.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Each Right shall be exercisable to purchase one Common Share,
subject to further adjustment as provided herein. 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 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 principal office of the Rights Agent, together with
payment of the Purchase Price for each Common Share as to which the Rights
are exercised, at or prior to the earliest of (i) the close of business on
November 9, 2011, subject to extension, (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof
(the "Redemption Date"), and (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof; provided, however, that if the
number of Rights exercised would entitle the holder thereof to receive any
fraction of a Common Share greater than one-half of a share, the holder
thereof shall not be entitled to exercise such Rights unless such holder
concurrently purchases from the Company (and in such event the Company
shall sell to such holder), at a price in proportion to the Purchase Price,
an additional fraction of a Common Share which, when added to the number of
Common Shares to be received upon such exercise, will equal an integral
number of Common Shares.
(b) The Purchase Price for each Common Share pursuant to the exercise
of a Right shall initially be $50.00, shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall be payable
in lawful money of the United States of America or in Common Shares in
accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Common Shares to be purchased as set
forth below and an amount equal to any applicable transfer tax required to
be paid by the holder of such Right Certificate in accordance with Section
9 hereof, the Rights Agent shall thereupon promptly (i) requisition from
any transfer agent of the Common Shares certificates for the number of
Common Shares to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional Common
7
Shares in accordance with Section 14 hereof, (iii) after receipt of such
Common Share certificates, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder, and (iv) when
appropriate, after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof
shall be made by certified check, cashier's check, bank draft or money
order payable to the order of the Company, except that, if so provided by
the Board of Directors of the Company, the payment of the Purchase Price
following the occurrence of a Section 11(a)(ii) Event (as hereinafter
defined) and until the first occurrence of a Section 13 Event (as such term
is hereinafter defined) may be made wholly or in part by delivery of a
certificate or certificates (with appropriate stock powers executed in
blank attached thereto) evidencing a number of Common Shares equal to the
then Purchase Price divided by the closing price (as determined pursuant to
Section 11(d) hereof) per Common Share on the Trading Day (as such term is
hereinafter defined) immediately preceding the date of such exercise. If
the Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Sections 6 and 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to take any
action with respect to a registered holder of a Right Certificate upon the
occurrence of any purported transfer, assignment or exercise as set forth
in this Section 7 unless such registered holder shall have (i) completed
and signed the certificate following the form of assignment or election to
purchase set forth on the reverse of the Right Certificate surrendered for
such transfer, assignment 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 shall reasonably
request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company or shall, at the written request
of the Company, destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
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Section 9. Reservation and Availability of Common Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Common Shares or any
authorized and issued Common Shares held in its treasury, the number of
Common Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7.
(b) So long as the Common Shares issuable upon the exercise of Rights
may be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all Common Shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares (except as
otherwise provided by any corporation law applicable to the Company).
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right
Certificates or of any Common Shares upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Right Certificates to
a person other than, or the issuance or delivery of certificates for the
Common Shares in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or
to deliver any certificates for Common Shares upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until
it has been established to the Company's reasonable satisfaction that no
such tax is due. The Rights Agent shall have no duty or obligation to take
any action under any Section of this Agreement which requires the payment
by a Rights holder of applicable taxes and governmental charges unless and
until the Rights Agent is satisfied that all such taxes and/or charges have
been paid.
Section 10. Common Shares Record Date. Each Person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes and other governmental
charges) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Shares transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Common Shares transfer books of the Company are open.
9
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number of Common Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of Common Shares or (D)
issue any shares of its capital stock in a reclassification of the Common
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right
had been exercised immediately prior to such date and at a time when the
Common Shares transfer books of the Company were open, such holder would
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. If an
event occurs which would require an adjustment under both Section 11(a)(i)
and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any
Person shall become an Acquiring Person, other than pursuant to any
transaction set forth in Section 13(a) each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of
Common Shares for which a Right is then exercisable, in accordance
with the terms of this Agreement, such number of Common Shares as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of Common Shares for which a Right is
then exercisable and dividing that product by (y) 50% of the then
current per share market price of the Common Shares (determined
pursuant to Section 11(d)) on the date the Person became an Acquiring
Person (such number of shares, the "Adjustment Shares").
From and after such time as a Person becomes and Acquiring Person
(a "Section 11(a)(ii) Event"), any Rights that are or were acquired or
beneficially owned by such Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) shall be void and any holder of
such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate shall be
issued pursuant to Section 3 that represents Rights beneficially owned
by an Acquiring Person whose Rights would
10
be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be cancelled. The
Company shall use all reasonable efforts to ensure that the provisions
of this paragraph are complied with, but shall have no liability to
any holder of Right Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring Person
or its Affiliates, Associates or transferees hereunder.
(iii) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued (and not
reserved for issuance for purposes other than upon the exercise of the
Rights) to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Company shall: (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price
payable with respect to such Right (such excess, the "Spread"), and
(B) with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Shares or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock, if any,
which the Board of Directors of the Company has deemed to have the
same value as Common Shares (such shares of preferred stock,
hereinafter referred to as "common stock equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any combination of
the foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board of
Directors of the Company based upon the advice of a reputable regional
investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made
adequate provision to substitute for the Adjustment Shares pursuant to
clause (B) above within thirty (30) days following the occurrence of a
Section 11(a)(ii) Event (the "Section 11(a)(ii) Trigger Date"), then
the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of any portion of
the Purchase Price, Common Shares (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient additional
Common Shares might be authorized for issuance for exercise in full of
the Rights, the thirty (30) day period set forth above may be extended
to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to the last
paragraph of Section 11(a)(ii) hereof, that such action shall apply
uniformly
11
to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period to seek any
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d) hereof) of the Common Shares on
the Section 11(a)(ii) Trigger Date and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common
Shares on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Shares (or securities convertible into
Common Shares) at a price per Common Share (or having a conversion price
per share, if a security convertible into Common Shares) less than the then
current per share market price of the Common Shares (as defined in Section
11(d)) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of the total
number of Common Shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be
the number of Common Shares outstanding on such record date plus the number
of additional Common Shares to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise
of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent. Common Shares owned by or held
for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
12
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Common Shares (as defined in Section 11(d)) on such record
date, less the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Common Share and the denominator of
which shall be such current per share market price of the Common Shares;
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per
share market price" of the Common Shares on any date shall be deemed to be
the average of the daily closing prices per Common Share for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to and not including 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 (i) a dividend or distribution on such Common Shares payable in
Common Shares or securities convertible into Common Shares, or (ii) any
subdivision, combination or reclassification of 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 shall be appropriately adjusted to reflect the
current market price per Common Share. The closing price for each Trading
Day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange or, if the Common Shares are not
listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the 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 the National Association of Securities Dealers, Inc. Automated
Quotations System ("Nasdaq") or such other system 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 Board of Directors of the Company. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the Common
Shares are listed or admitted to trading or Nasdaq, as the case may be, is
open for the transaction of business
13
or, if the Common Shares are not listed or admitted to trading on any
national securities exchange or Nasdaq, as the case may be, a Business Day.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a share as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of
the transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Common
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect to
the Common Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of Common Shares (calculated to the nearest ten-thousandth of a Common
Share) obtained by (i) multiplying (x) the number of Common Shares covered
by a Right immediately prior to this adjustment by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of
a Right. Each of the Rights outstanding after such adjustment of the number
of Rights shall be exercisable for the number of Common Shares for which a
Right was exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the
14
Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights
to which such holders shall be entitled after such adjustment. Right
Certificates to be so distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Common Shares issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of Common Shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par value, if any, of the Common Shares
issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and nonassessable
(except as otherwise provided by any corporation law applicable to the
Company) Common Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date of the Common Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number
of Common Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment. The Company shall
contemporaneously provide the Rights Agent with a copy of any such
election.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision
15
of the Common Shares, issuance wholly for cash of any Common Shares at less
than the current market price, issuance wholly for cash of Common Shares or
securities which by their terms are convertible into or exchangeable for
Common Shares, dividends on Common Shares payable in Common Shares or
issuance of rights, options or warrants referred to in Section 11(b),
hereafter made by the Company to holders of Common Shares shall not be
taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time
after the earlier of the Distribution Date or the Share Acquisition Date,
(i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), (ii)
merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof), or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof) or (iv) consummate a
share exchange with any other Person, if at the time of or immediately
after such consolidation, merger, sale or share exchange (A) there are any
rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, (B) prior to,
simultaneously with or immediately after such consolidation, merger, sale
or share exchange the shareholders of the Person who constitute, or would
constitute, the "Principal Party" for purposes of Section 13(a) hereof
shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates or (C) the form or nature of
organization of the Principal Party would preclude or limit the
exercisability of the Rights.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, 24 or 27 hereof, 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 diminish
substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate and (c) mail (or, if deemed appropriate by the
Board of Directors of the Company, make available at no charge) a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained, and shall have no duty with
respect to and shall not be deemed to have knowledge of such adjustment unless
and until it shall have received such certificate.
16
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer
of Assets or Earning Power.
(a) In the event that, following the Shares Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation
or merger, (y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger, or any
Person or Persons (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof) shall consummate a share exchange
with the Company, and, in connection with such consolidation or merger or
share exchange, all or part of the outstanding Common Shares shall be
changed into or exchanged for stock or other securities of any other Person
(or the Company) or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies with
Section 11(o) hereof), then, and in each such case, proper provision shall
be made so that: (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by
the number of Common Shares for which a Right is then exercisable (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of any
of the events described in clauses (x), (y) or (z) above (a "Section 13
Event"), the Purchase Price in effect immediately prior to the first
occurrence of a Section 11(a)(ii) Event multiplied by the number of Common
Shares for which a Right was exercisable immediately prior to such first
occurrence), in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, nonassessable (except as
otherwise required by any corporation law applicable to the Principal Party
(as such term is hereinafter defined)) and freely tradable Common Shares of
the Principal Party, not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number
of Common Shares for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such shares for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event by
the Purchase Price in effect immediately prior to such first occurrence),
and dividing that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of the current
market price (determined pursuant to Section 11(d) hereof) per Common Share
of such Principal Party on the date of consummation of such Section 13
Event; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
17
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares) in
connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), the Person that is the issuer
of any securities into which Common Shares of the Company are
converted in such merger, consolidation or share exchange, and if no
securities are so issued, (A) the Person that is the other party to
the merger, consolidation or share exchange and that survives such
merger or consolidation, or, if there is more than one such Person,
the Person the Common Shares of which have the greatest aggregate
market value of shares outstanding or (B) if the Person that is the
other party to the merger or consolidation does not survive the merger
or consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month-period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any such consolidation, merger,
share exchange, sale or transfer unless the Principal Party shall have a
sufficient number of authorized Common Shares 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 thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger, share exchange or
sale of assets mentioned in paragraph (a) of this Section 13, the Principal
Party will
18
(i) prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the
Rights and the securities purchasable upon exercise of the Rights on
an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Final Expiration
Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations, share exchanges or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by Nasdaq or such
other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of fractional Common Shares,
equal to one-half of a Common Share or less, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one Common Share. Any exercise of Rights
that would entitle the holder thereof to receive any fraction of a Common
Share greater than
19
one-half of a Common Share shall be governed by Section 7(a) hereof. For
purposes of this Section 14(b), the current market value of a Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
(d) The Rights Agent shall have no duty or obligation with respect to
this Section 14 and any other Section of this Agreement relating to
fractional shares unless and until it has received specific instructions
(and sufficient cash if required) from the Company with respect to its
duties and obligations under such Sections.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the 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 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, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(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, duly endorsed or accompanied
by a proper instrument of transfer;
(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 Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary; and
20
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether
interlocutory or final) 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, the Company must use its best efforts
to have any such order, decree, judgment or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or other distributions or be deemed for any purpose the holder of the
Common Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any 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 hereof) or
proceedings of the Company (except as provided herein), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the preparation, delivery,
amendment, administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, damage, judgment, fine, penalty, claim, demand, settlement, loss
or expense (including, without limitation, the reasonable fees and expenses
of counsel) incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent, for any action taken, suffered or omitted by
the Rights Agent in connection with the acceptance, administration,
exercise and performance of its duties under this Agreement, including the
costs and expenses of defending against any claim of liability in the
premises. The indemnity provided for herein shall survive the termination
of this Agreement and the exercise or expiration of the Rights. Any
reasonable costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
21
certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, provided that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section
21 hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the 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 in case at that time any of
the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of
the predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations, and only the duties and obligations, expressly imposed
by this Agreement (and no implied duties and obligations) upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the written advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
with respect to, and the Rights Agent shall incur no liability for or in
respect of, any action taken, suffered or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may
22
be deemed to be conclusively proved and established by a certificate signed
by the Chairman of the Board, the President or any Vice President and by
the Treasurer or any Assistant Treasurer or the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full and complete authorization and protection to the
Rights Agent for any action taken, suffered, or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
In no case will the Rights Agent be liable for special, indirect, punitive,
incidental or consequential losses or damages of any kind whatsoever
(including without limitation lost profits), even if the Rights Agent has
been advised of the possibility of such damages. In the absence of gross
negligence, bad faith or willful misconduct by the Rights Agent, any
liability of the Rights Agent under this Agreement shall be limited to the
aggregate amount of fees paid by the Company to the Rights Agent pursuant
to this Agreement.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due authorization, 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 shall it be responsible for any breach by the Company of any covenant
or condition contained in this Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof)
or any adjustment in the terms of the Rights (including the manner, method
or amount thereof) provided for in Section 3, 7, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Common Shares or other securities to be issued pursuant to this Agreement
or any Right Certificate or as to whether any Common Shares or other
securities will, when issued, be validly authorized and issued, fully paid
and nonassessable (except as otherwise provided by any corporation law
applicable to the Company).
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
23
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, such instructions shall be full
authorization and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or
omitted by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
The Rights Agent shall be fully authorized and protected in relying upon
the most recent advice or instructions received from any such officer.
(h) The Rights Agent and any shareholder, affiliate, director, officer
or employee of the Rights Agent may buy, sell or deal in, or act as the
transfer agent for, any of the Rights, Common Shares or other securities of
the Company or become pecuniary interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent or any such
shareholder, affiliate, director, officer or employee 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 shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company or any other
Person resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights
if it believes that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares by registered or certified mail, and to the holders of the
Right Certificates by first class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares by registered or certified mail, and to the holders
of the Right Certificates by first class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction
24
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
authorized to do business as a banking institution, organized and doing business
under the laws of the United States or of the State of Wisconsin, in good
standing, having an office in the State of Wisconsin (or, in the discretion of
the Board of Directors of the Company, any other state of the United States),
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 of at least $25 million, or (b) an Affiliate of a
corporation described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common 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, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to subsection (b) of this Section 23 and shall not be redeemed in
any other manner.
(b) The Board of Directors of the Company may, at its option, at any
time prior to such time as any Person becomes an Acquiring Person, redeem
all but not less than all of the then outstanding Rights at a redemption
price of $0.001 per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights by the Board of Directors
may be made effective at such time, on such basis and with such conditions
as the Board of Directors in its sole discretion may establish.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption
hereunder has expired.
(c) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the redemption of the Rights pursuant to
subsection (b) of this Section 23 and without any further action and
without any notice, the right to exercise the
25
Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after the effectiveness of the
action of the Board of Directors ordering the redemption of the Rights
pursuant to subsection (b) the Company shall mail a notice of redemption to
all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 24 hereof, and other than in connection with
the purchase of Common Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a)(ii)
hereof) 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 date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
such Subsidiary, any entity holding Common Shares for or pursuant to the
terms of any such plan, or any trustee, administrator or fiduciary of such
a plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Common 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 shall be effected pro
26
rata based on the number of Rights (other than Rights which have become
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute common stock equivalents (as such term is defined in
Section 11(a)(iii) hereof) for some or all of the Common Shares
exchangeable for Rights.
(d) In the event that there shall not be sufficient Common Shares or
common stock equivalents issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company shall take all such action as may be
necessary to authorize additional Common Shares or common stock equivalents
for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to
the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issued an amount in cash equal
to the same fraction of the current market value of a whole Common Share.
For the purposes of this paragraph (e), the current market value of a whole
Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the holders of
Common Shares or to make any other distribution to the holders of Common
Shares (other than a regular quarterly cash dividend), (ii) to offer to the
holders of Common Shares rights or warrants to subscribe for or to purchase
any additional Common Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of
Common Shares (other than a reclassification involving only the subdivision
of outstanding Common Shares), (iv) to effect any consolidation or merger
into or with (other than a merger of a Subsidiary into or with the
Company), to effect any share exchange with or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, or (v) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall
give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, or distribution of rights or
warrants, or the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the
holders of the Common Shares if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least 10 days prior to the record date for determining
holders of Common Shares for purposes of such action, and in the case of
any such other action, at
27
least 10 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,
whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event or Section 13 Event shall
occur, then, in any case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice
shall include a brief summary of the Section 11(a)(ii) Event or Section 13
Event, as the case may be, and the consequences thereof to holders of
Rights.
(c) In case of an adjustment to the number of Common Shares subject to
receipt upon exercise of the Rights shall occur pursuant to Section 7(a) of
this Agreement, then the Company shall give to (i) the Rights Agent, in
accordance with Section 26 hereof, notice of such adjustment as soon as
practicable and (ii) each holder of a Right Certificate, in accordance with
Section 26 hereof, notice of such adjustment no later than the earlier of
the payment date of the Company's next regular quarterly cash dividend on
Common Shares payable after the amendment date, or 100 days after the
amendment date.
Section 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 shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Fresh Brands, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Secretary
(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 shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Firstar Bank, N.A.
0000 Xxxxx Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Department
(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 shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
28
Section 27. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company may and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing Common Shares. Without limiting the foregoing, the Company may at
any time prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the thresholds set forth in Sections 1(a) and 3(a) hereof
from 20% to not less than 10%, with appropriate exceptions for Persons then
beneficially owning Common Shares of the Company constituting a percentage of
the number of Common Shares then outstanding equal to or in excess of the new
threshold. From and after the Distribution Date and subject to the penultimate
sentence of this Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that from and after the Distribution Date this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable, or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, the Rights Agent may, but
shall not be obligated to, enter into any supplement or amendment that affects
the Rights Agent's own rights, duties, obligations or immunities under this
Agreement. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made which reduces the then effective
Redemption Price or moves to an earlier date the then effective Final Expiration
Date. Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Shares.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this
29
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Wisconsin and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 34. Determinations and Actions by the Board of 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, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (a) interpret the provisions of this Agreement, and (b) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement and any determination as to whether actions or any Person
shall be such as to cause such Person to beneficially own shares held by another
Person). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (ii) below, all omissions with respect to the
foregoing) which are done or made by the Board of the Company in good faith (the
Rights Agent may assume the Board acted in good faith), shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (ii) not subject the Board of the Company to
any liability to the holders of the Rights.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
FRESH BRANDS, INC.
Attest:
By: /s/ Xxxxxx X. Go By: /s/ Xxxxxx X. Xxxx
--------------------------------- ---------------------------------
Xxxxxx X. Go Xxxxxx X. Xxxx
Vice President, Chief Financial President and Chief Executive
Officer, Treasurer and Secretary Officer
FIRSTAR BANK, N.A.
Attest:
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxx
--------------------------------- ---------------------------------
Name: Xxxxx Xxxxxxxx Xxxxxxx Xxxx
-------------------------------
Title: Vice President Title: Trust Officer
------------------------------ ---------------------------------
Exhibit A
---------
[Form of Right Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER NOVEMBER 9, 2011 (SUBJECT TO
EXTENSION) OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
FRESH BRANDS, INC.
This certifies that __________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of October 12, 2001, and as such agreement may be amended,
(the "Rights Agreement"), between Fresh Brands, Inc., a Wisconsin corporation
(the "Company"), and Firstar Bank, N.A., Milwaukee, Wisconsin, a National
Banking Association (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., Milwaukee, Wisconsin time, on November 9,
2011 at the principal office of the Rights Agent, or at the office of its
successor as Rights Agent, one fully paid nonassessable (except as otherwise
provided by any corporation law applicable to the Company) share of common
stock, par value $.05 ("Common Shares"), of the Company, at a purchase price of
$50.00 per Common Share (the "Purchase Price"), upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the number of
Common Shares which may be purchased upon exercise hereof) set forth above, and
the Purchase Price set forth above, are the number and Purchase Price as of
November 9, 2001, based on the Common Shares as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the number of Common
Shares which may be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon the happening
of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
A-1
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.001 per Right or (ii) may be exchanged in whole or in part for Common
Shares.
The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, but prior to such Person's
acquisition of 50% or more of the outstanding Common Shares, exchange the Rights
evidenced by the Certificate for Common Shares, at an exchange ratio of one
Common Share per Right, subject to adjustment, as provided in the Rights
Agreement.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement. No Rights may be exercised that would
entitle the holder to any fraction of a Common Share greater than one-half of a
Common Share unless concurrently therewith such holder purchases an additional
fraction of a Common Share which, when added to the number of Common Shares to
be received upon such exercise, equals an integral number of Common Shares, as
provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Shares
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a 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, distributions or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ___________, 20__.
FRESH BRANDS, INC.
ATTEST:
By:
------------------------------------ ---------------------------------
Name:_______________________________
Countersigned: Title:________________________________
FIRSTAR BANK, N.A.
By:---------------------------------
Name:_______________________________
Title:______________________________
A-2
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________________ hereby sells, assigns
and transfers unto ______________________________________________________
(Please print name and address of transferee)
-------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________ Attorney, to
transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ________________________, 20__
---------------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
---------------------------------------
Signature
--------------------------------------------------------------------------------
A-3
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To Fresh Brands, Inc.
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such Common Shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated __________________, 20__
----------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
A-4
[Form of Reverse Side of Right Certificate -- continued]
--------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
------
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
A-5
Exhibit B
---------
FRESH BRANDS, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On October 11, 2001, the Board of Directors of Fresh Brands, Inc. (the
"Company") declared a dividend of one common share purchase right (a "Right")
for each outstanding share of common stock, par value $.05 (the "Common
Shares"), of the Company. The dividend is payable on November 23, 2001 to the
shareholders of record on November 9, 2001 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one Common Share, at
a price of $50.00 per Common Share, subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Firstar Bank, N.A.,
Milwaukee, Wisconsin, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (other
than the Company, a subsidiary of the Company or an employee benefit plan of the
Company or a subsidiary) (an "Acquiring Person") has acquired beneficial
ownership of 20% or more of the outstanding Common Shares (the "Shares
Acquisition Date") or (ii) 10 business days (or such later date as may be
determined by action of the Company's Board of Directors prior to such time as
any person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group (other than the Company, a subsidiary of the Company or an employee
benefit plan of the Company or a subsidiary) of 20% or more of such outstanding
Common Shares (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such Common Share
certificate.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares, outstanding as of the Record Date, even without such notation,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on November 9, 2011, unless the Rights are earlier redeemed or
exchanged by the Company, or the Rights Agreement is amended, in each case as
described below.
B-1
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights or
warrants to subscribe for or purchase Common Shares at a price, or securities
convertible into Common Shares with a conversion price, less than the then
current market price of the Common Shares or (iii) upon the distribution to
holders of the Common Shares of evidences of indebtedness or assets (excluding
regular quarterly cash dividends or dividends payable in Common Shares) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of Common Shares
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
In the event that any person becomes an Acquiring Person (a "Flip-In
Event"), holders of Rights will thereafter generally have the right to receive
upon exercise that number of Common Shares (or, in certain circumstances cash,
property or other securities of the Company or a reduction in the Purchase
Price) having a market value of two times the then current Purchase Price.
Notwithstanding any of the foregoing, following the occurrence of a Flip-In
Event all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, or subsequently become beneficially owned by an
Acquiring Person, related persons and transferees will be null and void.
In the event that, at any time following the Shares Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction or (ii) 50% or more of its consolidated assets or earning power are
sold (the events described in clauses (i) and (ii) are herein referred to as
"Flip-Over Events"), proper provision will be made so that holders of Rights
(except as otherwise provided in the Rights Agreement) will thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price,
that number of shares of common stock of the acquiring company which at the time
of such transaction will have a market value of two times the then current
Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent in such Purchase Price. No fractional Common Shares will be issued. In
lieu of fractional Common Shares equal to one-half of a Common Share or less, an
adjustment in cash will be made based on the market price of the Common Shares
on the last trading day prior to the date of exercise. No Rights may be
exercised that would entitle the holder thereof to any fractional Common Share
greater than one-half of a Common Share unless concurrently therewith such
holder purchases an additional fraction of a Common Share which, when added to
the number of Common Shares to be received upon such exercise, equals an
integral number of Common Shares.
The Purchase Price is payable by certified check, cashier's check,
bank draft or money order or, if so provided by the Company, the Purchase Price
following the occurrence of a
B-2
Flip-In Event and until the first occurrence of a Flip-Over Event may be paid in
Common Shares having an equivalent value.
At any time after a person becomes an Acquiring Person and prior to
the acquisition by any Acquiring Person of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by any Acquiring Person which have become void), in whole or
in part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
At any time prior to a person becoming an Acquiring Person, the Board
of Directors of the Company may redeem the Rights in whole, but not in part, at
a price of $.001 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Other than provisions relating to certain principal economic terms of
the Rights, the terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to lower the threshold for exercisability of the Rights from 20% to
not less than 10%, with appropriate exceptions for any person or group then
beneficially owning a percentage of Common Shares in excess of 10% of the number
of Common Shares then outstanding equal to or in excess of the new threshold,
except that from and after the Distribution Date no such amendment may adversely
affect the interests of the holders of the Rights. The Rights may also be
amended to extend the expiration date thereof.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A filed
with respect to the Rights. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
B-3
