EXHIBIT 4.1
AMENDED AND RESTATED RIGHTS AGREEMENT
This agreement (the "Agreement") dated as of December 13, 1989, and amended
and restated as of August 9, 2004, between Oneida Ltd., a New York corporation
(the "Company"), and American Stock Transfer & Trust Company, a New York
corporation (the "Rights Agent").
WHEREAS, on December 13, 1989 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a distribution of one
right for each share of common stock, par value $1.00 per share, of the Company
(the "Company Common Stock") outstanding as of the Close of Business (as defined
below) on December 26, 1989 (the "Record Date"), and authorized the issuance of
one right (as such number may have been thereafter adjusted) for each share of
Company Common Stock issued between the Record Date (whether originally issued
or delivered from the Company's treasury) and, except as otherwise provided in
Section 22, the Distribution Date, each right initially representing the right
to purchase, upon certain terms and subject to certain conditions, one Unit (as
defined below) of Preferred Stock (as defined below);
WHEREAS, pursuant to authorization of the Board of Directors of the Company
at a meeting properly noticed and convened on October 27, 1999, this Agreement
has been amended and restated in accordance with the provisions of Section 26
hereof to, among other things, (a) provide that each share of Company Common
Stock outstanding at the close of business on the date hereof shall entitle the
holder thereof to one Right (each a "Right"), (b) extend the Final Expiration
Date (as defined below), (c) amend the Purchase Price (as defined below), and
(d) include provisions to permit the Company, at its option, to exchange the
outstanding and exercisable Rights for Units of Preferred Stock;
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 that (i) shall be the
Beneficial Owner, directly or indirectly, of 20% or more of the shares of Voting
Stock then outstanding or (ii) is an Affiliate or Associate of the Company and
at any time within the five-year period immediately prior to a Stock Acquisition
Date was the Beneficial Owner, directly or indirectly, of more than 20% of the
Voting Stock; but shall not include (x) the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity or (y) any such Person who has become and is such a Beneficial
Owner solely because (A) of a change in the aggregate number of shares of Voting
Stock since the last date on which such Person acquired beneficial ownership of
any shares of Voting Stock or (B) it acquired such beneficial ownership in the
good faith belief that such acquisition would not (1) cause such beneficial
ownership to be equal to or exceed 20% of the shares of Voting Stock then
outstanding and such Person relied in good faith in computing the percentage of
its beneficial ownership on publicly filed reports or documents of the Company
that are inaccurate or out-of-date or (2) otherwise cause a Distribution Date or
the adjustment provided for in Section 11(a)(ii) to occur; provided, however,
that for purpose of determining whether a Person is an Acquiring Person, the
number of shares of Voting Stock deemed outstanding shall include shares
beneficially owned by such Acquiring Person but shall not include any unissued
shares of Voting Stock which may be issued pursuant to any agreement,
arrangement or understanding or upon exercise of conversion rights, warrants or
options, or otherwise. Notwithstanding clause (ii)(y)(B) of the prior sentence,
if any Person that is not an Acquiring Person due to such clause (ii)(y)(B) does
not reduce its percentage of beneficial ownership of Voting Stock to less than
20% by the Close of Business on the fifth Business Day after notice from the
Company that such person's beneficial ownership of Voting Stock so equals to or
exceeds 20%, such Person shall at the end of such five Business Day period
become an Acquiring Person (and such clause (ii)(y)(B) shall no longer apply to
such Person). For purposes of this definition, the determination whether any
Person acted in "good faith" shall be conclusively determined by the Board of
Directors of the Company.
(b) "Adjustment Shares" has the meaning set forth in Section 11(a)(ii).
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(c) "Adjustment Spread" has the meaning set forth in Section 34(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Section 912(a) of the New York Business Corporation Law (the
"NYBCL"), as in effect on the date hereof.
(e) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own", and shall be deemed to have "Beneficial Ownership" of any
securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly; or
(ii) which such Person or any of such Person's Affiliates or
Associates, has (A) the right to acquire such securities (whether such right is
exercisable immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, warrants or options, or
otherwise; provided, however, that a person shall not be deemed the Beneficial
Owner of securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Persons' Affiliates or Associates until such tendered
securities are accepted for purchase or exchange or, of securities that may be
issued upon exercise of Rights at any time prior to the occurrence of a
Triggering Event; or (B) the right to vote such stock pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the Beneficial Owner of any securities if the
agreement, arrangement or understanding to vote such security (X) arises solely
from a revocable proxy or consent given in response to a proxy or consent
solicitation made in accordance with the applicable rules and regulations under
the Exchange Act and (Y) is not then reportable on a 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 (whether or not in
writing), for the purpose of acquiring, holding, voting (except voting pursuant
to a revocable proxy or consent as described in item (B) of clause (ii) of this
subparagraph), or disposing of such security.
(f) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in New York City are authorized or obligated
by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(h) "Common Stock" of any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or, if such Person
shall have no capital stock, the equity securities or other equity interest
having power to control or direct the management of such Person.
(i) "Company Common Stock" has the meaning set forth in the recitals to
this Agreement.
(j) "Distribution Date" has the meaning set forth in Section 3(a).
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Expiration Date" has the meaning set forth in Section 7(a).
(m) "Person" shall mean any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d)(2) of the Exchange
Act.
(n) "Preferred Stock" shall mean the Series A Preferred Stock, par value
$1.00 per share, of the Company having the relative rights, preferences and
limitations described in the Certificate of Amendment of Restated Certificate of
Incorporation of the Company set forth as Exhibit C hereto.
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(o) "Purchase Price" has the meaning set forth in Section 7(b).
(p) "Record Date" has the meaning set forth in the recitals to this
Agreement.
(q) "Right" has the meaning set forth in the recitals to this Agreement.
(r) "Rights Certificate" has the meaning set forth in Section 3(a).
(s) "Rights Dividend Declaration Date" has the meaning set forth in the
recitals to this Agreement.
(t) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii)(A), (B) or (C) hereof.
(u) "Section 13 Event" shall mean any event described in clause (x), (y) or
(z) of Section 13(a) hereof.
(v) "Section 34(a)(i) Exchange Ratio" has the meaning set forth in Section
34(a)(i).
(w) "Section 34(a)(ii) Exchange Ratio" has the meaning set forth in Section
34(a)(ii).
(x) "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(y) "Subsidiary" shall mean, with reference to any Person, any corporation
of which an amount of voting securities sufficient to elect at least a majority
of the directors of such corporation is owned, directly or indirectly, by such
Person.
(z) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(aa) "Unit" has the meaning set forth in Section 7(b).
(bb) "Voting Stock" shall mean any shares of capital stock of the Company
entitled to vote generally in the election of directors.
Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. With
the consent of the Rights Agent, the Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the Close
of Business on the tenth day after the Stock Acquisition Date, and (ii) the
Close of Business on the tenth Business Day after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 20% or more of
the shares of Voting Stock then outstanding (the earlier of (i) and (ii) above
being the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates for
shares of Company Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Company Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of shares of
Company Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
rights certificates in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. In the event that an
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adjustment in the number of Rights per share of Company Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
(b) On the Record Date or as promptly as practicable thereafter, the
Company sent a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit B (as amended to summarize the
Rights as amended as of the date hereof, the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of shares of Company
Common Stock as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company.
(c) The number of Rights associated with each share of Company Common Stock
outstanding (including any shares of Company Common Stock held in treasury) on
the date hereof shall be adjusted so that the number of Rights associated with
each share of Company Common Stock on the date hereof shall equal one.
(d) Rights shall, without any further action, be issued in respect of all
shares of Company Common Stock which are issued (including any shares of Company
Common Stock held in treasury) after the date hereof but prior to the earlier of
the Distribution Date and the Expiration Date. Certificates representing such
shares of Company Common Stock issued after the date hereof shall bear the
following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Amended and Restated Rights Agreement, dated as
of December 3, 1999, (the "Rights Agreement") between Oneida Ltd. and
American Stock Transfer & Trust Company (the "Rights Agent"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal office of the stock transfer administration office of
the Rights Agent. 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. The Rights Agent will mail to
the holder of this certificate a copy of the Rights Agreement, as in effect
on the date of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and
void.
With respect to certificates representing shares of Company Common Stock
(whether or not such certificates include the foregoing legend or have appended
to them the Summary of Rights), until the earlier of (i) the Distribution Date
and (ii) the Expiration Date, the Rights associated with the shares of Company
Common Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of the shares of Company Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the shares of Company Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates. (a) The Rights Certificates (and the
forms of election to purchase, assignment and certificate to be printed on the
reverse thereof) shall each be substantially in the form set forth in 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 and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or any rule or
regulation thereunder 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 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of Units of Preferred
Stock as shall be set forth therein at the price set forth therein, but the
amount and type of securities, cash or other assets that may be acquired upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or
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of any such Associate or Affiliate) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or any such Associate or Affiliate) or to
any Person with whom such Acquiring Person (or such Associate or Affiliate) has
any continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer which the Company's Board of Directors has determined to be part of a
plan, arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof shall, upon the written direction of the
Company's Board of Directors, contain (to the extent feasible), the following
legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in Section
7(e) of such Agreement.
Section 5. Countersignature and Registration. (a) Rights Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its President or
one of its Vice Presidents, under its corporate seal reproduced thereon attested
by its Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Rights Certificates may be manual or facsimile. Rights
Certificates bearing the manual or facsimile signatures of the individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the countersignature of such Rights Certificates or did not
hold such offices at the date of such Rights Certificates. No Rights Certificate
shall be entitled to any benefit under this Agreement or be valid for any
purpose unless there appears on such Rights Certificate a countersignature duly
executed by the Rights Agent by manual signature of an authorized officer, and
such countersignature upon any Rights Certificate shall be conclusive evidence,
and the only evidence, that such Rights Certificate has been duly countersigned
as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates. (a) Subject to the
provisions of Sections 4(b), 7(e) and 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on
the Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of Units of Preferred
Stock (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged, together with, in the event of a transfer, the form of assignment and
related certificate duly completed and executed, at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and executed the certificate set forth in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request;
whereupon the Rights Agent shall, subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
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(b) If a Rights Certificate shall be mutilated, lost, stolen or destroyed,
upon request by the registered holder of the Rights represented thereby and upon
payment to the Company and the Rights Agent of all reasonable expenses incident
thereto, there shall be issued, in exchange for and upon cancellation of the
mutilated Rights Certificate, or in substitution for the lost, stolen or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and representing the
equivalent number of Rights, but, in the case of loss, theft or destruction,
only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested
by the Company or the Rights Agent, indemnity also satisfactory to it.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Prior to the earlier of (i) the Close of Business on December 3, 2009 (the
"Final Expiration Date"), or (ii) simultaneously with the execution and delivery
of the Securities Exchange Agreement, dated as of August 9, 2004 among the
Company and the purchasers set forth on Schedule 1 thereto, and the consummation
of the transactions contemplated thereby (the earlier of (i) and (ii) being the
"Expiration Date"), the registered holder of any Rights Certificate may, subject
to the provisions of Sections 7(e) and 9(c) hereof, exercise the Rights
evidenced thereby in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price (as hereinafter defined) for the
number of Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) for which such surrendered
Rights are then exercisable.
(b) The purchase price for each one one-thousandth of a share (each such
one one-thousandth of a share being a "Unit") of Preferred Stock upon exercise
of Rights shall be $115.00 subject to adjustment from time to time as provided
in Sections 11 and 13(a) hereof (such purchase price, as so adjusted, being the
"Purchase Price"), and shall be payable in accordance with paragraph (c) below.
(c) As promptly as practicable following the occurrence of the Distribution
Date, the Company shall deposit with a corporation in good standing organized
under the laws of the United States or any State of the United States, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority (such institution being
the "Depositary Agent") certificates representing the shares of Preferred Stock
that may be acquired upon exercise of the Rights and shall cause such Depositary
Agent to enter into an agreement pursuant to which the Depositary Agent shall
issue receipts representing interests in the shares of Preferred Stock so
deposited. Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price for the Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased thereby as
set forth below and an amount equal to any applicable transfer tax or evidence
satisfactory to the Company of payment of such tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) requisition from the
Depositary Agent depositary receipts representing such number of Units of
Preferred Stock as are to be purchased and the Company will direct the
Depositary Agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue Company Common Stock, 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 Company Common Stock, other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate. Subject
to Section 34, the payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) may be made in cash or by certified or
bank check or bank draft payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
the Rights remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
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(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and which receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person (or
any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or any such Associate or Affiliate) or to any Person with whom
such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred Rights, shares
of Company Common Stock or the Company or (B) a transfer which the Company's
Board of Directors has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further action, and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights or any other Person as a result of its failure to make any
determination under this Section 7(e) or Section 4(b) with respect to an
Acquiring Person or its Affiliates, Associates or transferees.
(f) Notwithstanding anything in this Agreement or any Rights Certificate to
the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise by such registered holder unless such registered holder
shall have (i) completed and executed the certificate following the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The Company shall
at all times prior to the Expiration Date cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock, the
number of shares of Preferred Stock that, as provided is this Agreement, will be
sufficient to permit the exercise in full of all outstanding Rights. Upon the
occurrence of any events resulting in an increase in the aggregate number of
shares of Preferred Stock (or other equity securities of the Company) issuable
upon exercise of all outstanding Rights above the number then reserved, the
Company shall make an appropriate increase in the number of shares so reserved.
(b) So long as the shares of Preferred Stock to be issued and delivered
upon the exercise of Rights may be listed on any national securities exchange,
the Company shall during the period from the Distribution Date through the
Expiration Date use its best efforts to cause all securities reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) hereof of the consideration to be
delivered by the Company upon exercise of the Rights or, if so required by law,
as soon as practicable following the Distribution Date (such date being the
"Registration Date"), to file a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities that may be acquired upon exercise of the Rights (the
"Registration Statement"), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration
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Statement to continue to be effective (and to include a prospectus complying
with the requirements of the Securities Act) until the earlier of (A) the date
as of which the Rights are no longer exercisable for the securities covered by
the Registration Statement, and (B) the Expiration Date and (iv) to take as soon
as practicable following the Registration Date such action as may be required to
ensure that any acquisition of securities upon exercise of the Rights complies
with any applicable state securities or "blue sky" laws. Notwithstanding
anything herein or in the Rights Certificates to the contrary, after the
Distribution Date the Company may instruct the Rights Agent not to deliver Units
of Preferred Stock upon the exercise of Rights (or, following the occurrence of
a Triggering Event, any other securities that may be delivered upon exercise of
Rights) if the Company determines that such delivery would violate the
Securities Act and the rules then in effect thereunder.
(d) The Company shall take such action as may be necessary to ensure that
all shares of Preferred Stock (and, following the occurrence of a Triggering
Event, any other securities that may be delivered upon exercise of Rights) shall
be, at the time of delivery of the certificates or depositary receipts for such
securities, duly and validly authorized and issued and fully paid and
non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax imposed in
connection with the issuance or delivery of the Rights Certificates or upon the
exercise of Rights; provided, however, the Company shall not be required to pay
any such tax imposed in connection with the issuance or delivery of Units of
Preferred Stock, or any certificates or depositary receipts for such Units of
Preferred Stock (or, following the occurrence of a Triggering Event, any other
securities, cash or assets, as the case may be) to any person other than the
registered holder of the Rights Certificates evidencing the Rights surrendered
for exercise. The Company shall not be required to issue or deliver any
certificates or depositary receipts for Units of Preferred Stock (or, following
the occurrence of a Triggering Event, any other securities, cash or assets, as
the case may be) to, or in a name other than that of, the registered holder upon
the exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Units of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Units of
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate shall be dated, the
date on which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or, following the occurrence of a Triggering Event,
other securities) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) transfer books of the Company are open; and, provided further that
if delivery of any certificate for Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities that may be delivered
upon exercise of Rights) is delayed pursuant to Section 9(c) hereof, such Person
shall be deemed to have become the record holder of such Securities on, and such
certificate shall be dated, the date on which such securities first become
deliverable. Prior to the exercise of the Rights evidenced thereby, the holder
of a Rights Certificate shall not be entitled to any rights of a shareholder of
the Company with respect to securities for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights. The Purchase Price, the number and kind of securities 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 Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger 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 of such dividend or of the
33
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the case may
be, issuable on such date upon exercise of the Rights, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such
date, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement, directly or
indirectly, (1) shall merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of such
merger or combination and Company Common Stock shall remain outstanding, (2)
shall, in one transaction or a series of transactions, transfer any assets to
the Company or to any of its Subsidiaries in exchange (in whole or in part) for
shares of Company Common Stock, for other equity securities of the Company or
any such Subsidiary, or for securities exercisable for or convertible into
shares of equity securities of the Company or any of its Subsidiaries (whether
Company Common Stock or otherwise) or otherwise obtain from the Company or any
of its Subsidiaries, with or without consideration, any additional shares of
such equity securities or securities exercisable for or convertible into such
equity securities (other than pursuant to a pro rata distribution to all holders
of Company Common Stock), (3) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with (as the case may be) the Company or any
of its Subsidiaries or any employee benefit plan maintained by the Company or
any of its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, assets (including securities) on terms and conditions
less favorable to the Company or such Subsidiary or plan than those that could
have been obtained in arm's length negotiations with an unaffiliated third
party, other than pursuant to a transaction set forth in Section 13(a) hereof,
(4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series of transactions,
to, from or with the Company or any of the Company's Subsidiaries or any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity
(other than transactions, if any, consistent with those engaged in, as of the
date hereof, by the Company and such Acquiring Person or such Associate or
Affiliate), assets (including securities) having an aggregate fair market value
of more than $1,000,000, other than pursuant to a transaction set forth in
Section 13(a) hereof, (5) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with the Company or any of its Subsidiaries
or any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity, any material trademark or material service xxxx, other than
pursuant to a transaction set forth in Section 13(a) hereof, (6) shall receive,
or any designee, agent or representative of such Acquiring Person, or any
Associate or Affiliate of such Acquiring Person shall receive any compensation
from the Company or any of its Subsidiaries other than compensation for
full-time employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (7) shall receive the
benefit, directly or indirectly (except proportionately as a holder of Company
Common Stock or as required by law or governmental regulation), of any loans,
advances, guarantees, pledges or other financial assistance or any tax credits
or other tax advantage provided by the Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person, other than
pursuant to any transaction set forth in Section 13(a) hereof; or
(C) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock split), or
recapitalization of the Company, or any merger or consolidation of the Company
with any of its Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries, other than a transaction or
transactions to which the provisions of Section 13(a) apply (whether or not with
or into or otherwise involving an Acquiring Person) which has the effect,
directly or indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of
34
equity securities of the Company or any of its Subsidiaries which is directly or
indirectly beneficially owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person;
then, immediately upon the date of the occurrence of any event
described in Section 11(a)(ii)(A)-(C) hereof (a "Section 11(a)(ii) Event"),
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of the number of Units of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, such number of Units of Preferred Stock
as shall equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of Units of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event (such product thereafter being, for all purposes of this Agreement other
than Section 13 hereof, the "Purchase Price"), and (y) dividing that product by
50% of the then current market price (determined pursuant to Section 11(d)
hereof) per Unit of Preferred Stock on the date of such first occurrence (such
Units of Preferred Stock being the "Adjustment Shares").
(iii) In the event that the number of shares of Preferred Stock which
are authorized by the Company's Restated Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company, by the vote of the Company's Board of Directors, 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 (such excess being
the "Spread"), and (B) with respect to each Right, make adequate provision to
substitute for such Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Company Common Stock
or other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock (such other shares being
"preferred 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
Company's Board of Directors, after receiving advice from a nationally
recognized investment banking firm; provided, however, that if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within thirty days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as 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 the Purchase Price, Units of Preferred Stock (to the extent
available) and then, if necessary, cash, which Units of Preferred Stock and/or
cash shall have an aggregate value equal to the Spread. To the extent that the
Company determines that some action need be taken pursuant to the first sentence
of this Section 11(a)(iii), the Company will provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a Unit of Preferred Stock
shall be the current market price (as determined pursuant to Section 11(d)
hereof) per Unit of Preferred Stock on the Section 11(a)(ii) Trigger Date and
the value of any preferred stock equivalent shall be deemed to have the same
value as the Preferred Stock on such date.
(b) In case the Company shall fix a record for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five calendar days
after such record date) shares of Preferred Stock (or shares having
substantially the same rights, privileges and preferences as shares of Preferred
Stock ("equivalent preferred stock")) or securities convertible into Preferred
Stock or equivalent preferred stock at a price per share of Preferred Stock or
per share of equivalent preferred stock (or having a conversion price per share,
if a security convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the sum of the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or
all of
35
which may be in a form other than cash, the value of such consideration shall be
as determined in good faith by the Company's Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company or any
Subsidiary 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 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 a distribution to all
holders of shares of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in shares of Preferred Stock, but including any
dividend payable in stock other than Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock on
such record date less the fair market value (as determined in good faith by the
Company's Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holder of the Rights) of the cash, assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants distributable in
respect of a share of Preferred Stock and the denominator of which shall be such
current market price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock. 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 be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current market
price" per share of Company Common Stock or Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of Company Common
Stock or Common Stock, as the case may be, for the ten consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided,
however, if prior to the expiration of such requisite ten Trading Day period the
issuer announces either (A) a dividend or distribution on such shares payable in
such shares or securities convertible into such shares (other than the Rights),
or (B) any subdivision, combination or reclassification of such shares, then,
following the ex-dividend date for such dividend or the record date for such
subdivision, as the case may be, the "current market price" shall be properly
adjusted to take into account such event. The closing price for each day shall
be, if the shares are listed and admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which such shares are listed or admitted to trading or, if such shares are
not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then is use, or, if on such date such 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 such shares selected by the
Company's Board of Directors. If on any date no market maker is making a market
in such shares, the fair value of such shares on such date as determined in good
faith by the Company's Board of Directors shall be used. If such shares are not
publicly held or not so listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith by the Company's Board
of Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes. The term "Trading
Day" shall mean, if such shares are listed or admitted to trading on any
national securities exchange, a day on which the principal national securities
exchange on which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of Preferred Stock shall be determined in the same manner as
set forth above for Company Common Stock in clause (i) of this Section 11(d)
(other than the fourth sentence thereof). If the current market price per share
of Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1000 (as
such amount may be appropriately adjusted for such
36
events as stock splits, stock dividends and recapitalizations with respect to
Company Common Stock occurring after the date of this Agreement) multiplied by
the current market price per share of Company Common Stock. If neither Company
Common Stock nor Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Company's Board of Directors
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
For all purposes of this Agreement, the "current market price" of a Unit of
Preferred Stock shall be equal to the "current market price" of one share of
Preferred Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (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 of Company
Common Stock or Common Stock or other share or one-millionth of a share of
Preferred Stock, 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
mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii) or
13(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (d), (e),
(g), (h), (i), (j), (k), (l) and (m), and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Preferred Stock shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Preferred Stock
(or other securities or amount of cash or combination thereof) that may be
acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (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 Units of Preferred
Stock (calculated to the nearest one-ten thousandth of a Unit) obtained by (i)
multiplying (x) the number of Units of Preferred Stock 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 lieu of any adjustment in the
number of Units of Preferred Stock that may be acquired upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Units of Preferred Stock 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 ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least ten days later
than the date of such public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such
37
holders shall be entitled after such adjustment. Rights Certificates to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Units of Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per Unit and the number of Units of Preferred Stock which was
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value of the number of Units of Preferred
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue such fully paid and non-assessable number
of Units of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of that
number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Preferred Stock and shares of 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
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Company's Board of Directors
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash or shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to the holders of its Preferred Stock,
shall not be taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the Distribution 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
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),
if (x) at the time or immediately after such consolidation, merger or sale 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 or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
Person which constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have distributed or otherwise transferred
to its shareholders or other persons holding an equity interest in such Person
Rights previously owned by such Person or any of its Affiliates and Associates;
provided, however, this Section 11(n) shall not affect the ability of any
Subsidiary of the Company to consolidate with, merge with or into, or sell or
transfer assets or earning power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as permitted
by Section 23 or Section 26 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.
38
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date hereof and prior to the
Distribution Date (i) declare a dividend on the outstanding shares of Company
Common Stock payable in shares of Company Common Stock, (ii) subdivide the
outstanding shares of Company Common Stock, (iii) combine the outstanding shares
of Company Common Stock into a smaller number of shares, or (iv) issue any
shares of its capital stock in a reclassification of Company Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each share of Company Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Company Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each share of Company Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Company
Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Company Common
Stock outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever
an adjustment is made as provided in Section 11 or Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Company Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Company Common Stock) 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 not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning. (a)
In the event that, following the Stock 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 and, in connection with such consolidation or merger, all or part of
the outstanding shares of Company Common Stock shall be converted into or
exchanged for stock or other securities of any other Person 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) to any Person or Persons
(other than the Company or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), in one or more 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) (any such event being a
"Section 13 Event"), then, and in each such case, proper provision shall be made
so that: (i) each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price, such number of validly authorized and issued, fully
paid and non-assessable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), which shares shall not be subject to any liens,
encumbrances, rights of first refusal, transfer restrictions or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of Units of Preferred Stock 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 Units for which
a Right would be exercisable hereunder but for the occurrence of such Section
11(a)(ii) Event by the Purchase Price which would be in effect hereunder but for
such first occurrence) and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be the "Purchase Price" for all purposes
of this Agreement) by 50% of the current market price (determined pursuant to
Section 11(d) hereof) per share of the Common Stock 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 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 shares of
39
its Common Stock) in connection with the consummation of any such transaction as
may be necessary to ensure that the provisions of this Agreement shall
thereafter be applicable to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights; and (v) the provisions of Section 11(a)(ii)
hereof shall be of no further 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), (A) the Person that is the issuer of any
securities into which shares of Company Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of Common Stock that has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof) and (B) if no securities are so issued, the
Person that is the other party to such merger or consolidation, or, if there is
more than one such Person, the Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to Section 11(d) hereof);
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
largest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof); provided,
however, that in any such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding twelve-month period
registered under Section 12 of the Exchange Act ("Registered Common Stock"), or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary of another Person that has Registered Common Stock outstanding,
"Principal Party" shall refer to such other Person; (2) if the Common Stock of
such Person is not Registered Common Stock or such Person is not a corporation,
and such Person is a direct or indirect Subsidiary of another Person but is not
a direct or indirect Subsidiary of another Person which has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate parent entity
of such first-mentioned Person; (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of such other Persons is the issuer of the Registered
Common Stock having the highest aggregate current market price (determined
pursuant to Section 11(d) hereof); and (4) if the Common Stock of such Person is
not Registered Common Stock or such Person is not a corporation, and such Person
is directly or indirectly controlled by more than one Person, and none of such
other Persons have Registered Common Stock outstanding, "Principal Party" shall
refer to whichever ultimate parent entity is the corporation having the greatest
shareholders equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the
greatest net assets.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock 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 the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable following
the execution of such agreement, a registration statement under the Securities
Act with respect to the Common Stock that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain effective (and to
include a prospectus complying with the requirements of the Securities Act)
until the Expiration Date, and (C) as soon as practicable following the
execution of such agreement, take such action as may be required to ensure that
any acquisition of such Common Stock upon the exercise of the Rights complies
with any applicable state securities or "blue sky" laws; and
40
(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.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has provision in any of its authorized securities
or in its Certificate of Incorporation or By-laws or other instrument governing
its corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current market price per
share (determined pursuant to Section 11(d) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then current market price (other than to holders of Rights pursuant to this
Section 13) or (ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13; then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations 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 Rights Certificates
which evidence fractional Rights. In lieu of such fractional Rights, there shall
be paid to the Persons to which such fractional Rights would otherwise be
issuable, an amount in cash equal to such fraction of the market value of a
whole Right. For purposes of this Section 14(a), the 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 of the Rights for any day shall be, if the Rights
are listed or admitted to trading on a national securities exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by 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 Company's Board of
Directors. 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 Company's Board of Directors shall be used and such determination shall be
described in a statement filed with the Rights Agent and the holders of the
Rights.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence such fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). In lieu of such fractional shares of Preferred Stock
that are not integral multiples of one one-thousandth of a share, the Company
may pay to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction of
the then current market value of a Unit of Preferred Stock on the day of
exercise determined in accordance with Section 11(d) hereof.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this Agreement,
other than rights of action vested in the Rights Agent pursuant to Section 18
hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Company
41
Common Stock); and any registered holder of a Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of Company Common
Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of a certificate
representing shares of Company Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company or any other Person to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and certificates
duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Company Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or any other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as promptly as practicable.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the number of shares of Preferred Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a 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, except as provided in Section 24 hereof, to receive notice
of meetings or other actions affecting shareholders, or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent. (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,
including reasonable fees and disbursements of its counsel, incurred in
connection with the execution and administration of this Agreement and the
exercise and performance of its duties hereunder. The Company shall indemnify
the Rights Agent for, and hold it harmless against, any loss, liability or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and
42
expenses of defending against any claim of liability hereunder. The indemnity
provided herein shall survive the expiration of the Rights and the termination
of this Agreement.
(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 Rights Certificate or
certificate for Preferred Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to have been signed, executed and,
where necessary, verified or acknowledged by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust or
shareholder services businesses 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 document or any further act on the part of any of
the parties hereto; provided, however, that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be specified herein) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent or any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
43
countersignature on such Rights Certificates), 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 have any responsibility for the validity of
this Agreement or the execution and delivery hereof (except the due execution
and delivery hereof by the Rights Agent) or for the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure by the
Company to satisfy conditions contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Preferred Stock or any
other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock or any other
securities will, when so issued, be validly authorized and issued, fully paid
and non-assessable.
(f) The Company shall perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the performance by the Rights Agent of its duties under this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, 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, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer. Any
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to
be taken or omitted by the Rights Agent under this Rights Agreement and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any such officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct if reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of its rights hereunder if
the Rights Agent shall have reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
44
Company. If such certificate has been completed and signed and shows a negative
response to clauses 1 and/or 2 of such certificate, unless previously instructed
otherwise in writing by the Company (which instructions may impose on the Rights
Agent additional ministerial responsibilities, but no discretionary
responsibilities), the Rights Agent may assume without further inquiry that the
Rights Certificate is not owned by a person described in Section 4(b) or Section
7(e) hereof and shall not be charged with any knowledge to the contrary.
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
thirty days' prior notice in writing mailed to the Company, and to each transfer
agent of the Preferred Stock and the Company Common Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty days' prior notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Preferred
Stock and the Company Common Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then such registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or any state of the United States in good
standing. 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 a 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 Preferred Stock
and the Company Common Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or the Rights to the contrary, the Company may, at
its option, issue new Rights Certificates evidencing Rights in such form as may
be approved by the Company's Board of Directors to reflect any adjustment or
change made in accordance with the provisions of this Agreement in the Purchase
Price or the number or kind or class of shares or other securities or property
that may be acquired under the Rights Certificates. In addition, in connection
with the issuance or sale of shares of Company Common Stock following the
Distribution Date and prior to the Expiration Date, the Company (a) shall, with
respect to shares of Company Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Company's Board of Directors, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) Subject to Section 30 hereof, the
Company may, at its option, by action of the Company's Board of Directors, at
any time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date, or (ii) the Final Expiration Date, redeem
all but not less than all of the then outstanding Rights at a redemption price
of $.01 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being the "Redemption Price"), and the Company
may, at its option, by action of the Company's Board of Directors, pay the
Redemption Price either in shares of Company Common Stock (based on the "current
market price", as defined in Section 11(d) hereof, of the shares of Company
Stock at the time of redemption) or cash.
45
(b) Immediately upon the action of the Company's Board of Directors
ordering the redemption of the Rights, evidence of which shall be filed with the
Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Company's Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for Company Common Stock. Any notice which
is mailed in the manner 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.
Section 24. Notice of Certain Events. (a) In case the Company shall propose, at
any time after the Distribution Date, (i) to pay any dividend payable in stock
of any class to the holders of Preferred Stock or to make any other distribution
to the holders of Preferred Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company), (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of the
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (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 (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
Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock
whichever shall be the earlier; provided, however, no such notice shall be
required pursuant to this Section 24, if any Subsidiary of the Company effects a
consolidation or merger with or into, or effects a sale or other transfer of
assets or earning power to, any other Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 25 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including by telex,
telegram or cable) and mailed or sent or delivered, if to the Company, at its
address at:
Oneida Ltd.
Xxxxxx, Xxx Xxxx 00000
Attention: Secretary
And if to the Rights Agent, at its address at:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Office of the Assignee
46
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date, 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 shares of Company Common Stock. From and after the
Distribution Date, the Company may and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights 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 provisions 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 Rights Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) subject to Section 30
hereof, 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
26, the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Company Common Stock.
Section 27. 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 28. Determinations and Actions by the Board of Directors, Etc. For all
purposes of this Agreement, any calculation of the number of shares of Company
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, 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 (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board or any member thereof to any liability to the holders of the
Rights. Any reference herein to action by the Board of Directors of the Company
refers to action by such vote as is required by the Restated Certificate of
Incorporation or By-laws of the Company or otherwise required by applicable law.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock) any legal or
equitable right, remedy or claim under this Agreement. This Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock).
Section 30. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Company's Board of Directors
determines in its good faith judgment that severing the invalid language from
47
this Agreement would adversely affect the purpose or effect of this Agreement
and the Rights shall not then be redeemable, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire until the Close of
Business on the tenth Business Day following the date of such determination by
the Company's Board of Directors.
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in and
to be performed entirely in such State.
Section 32. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same instrument.
Section 33. Descriptive Headings. The headings contained in this Agreement are
for descriptive purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 34. Exchange. (a) (i) The Company may, at its option, at any time after
any Person becomes an Acquiring Person, upon resolution adopted by a majority of
the Company's Board of Directors, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant Section 7(e) hereof) for Units of Preferred Stock at an exchange ratio
of one Unit of Preferred Stock per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Section
34(a)(i) Exchange Ratio"). Notwithstanding the foregoing, the Company may not
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan maintained by the Company
or any of its Subsidiaries, or any trustee or fiduciary with respect to such
plan acting in such capacity), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the shares of
Company Common Stock then outstanding.
(ii) The Company may, at its option, at any time after any Person
becomes an Acquiring Person, upon resolution adopted by a majority of the
Company's Board of Directors, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to Section 7(e) hereof) for Units of Preferred Stock at an exchange
ratio specified in the following sentence, as appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof. Subject to such adjustment, each Right may be exchanged for that number
of Units of Preferred Stock obtained by dividing the Adjustment Spread (as
defined below) by the then current market price (determined pursuant to Section
11(d) hereof) per Unit of Preferred Stock on the earlier of (i) the date on
which any Person becomes an Acquiring Person and (ii) the date on which a tender
or exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act Regulations or any successor rule, if upon
consummation thereof such Person would be the Beneficial Owner of 20%or more of
the shares of Company Common Stock then outstanding (such exchange ratio being
the "Section 34(a)(ii) Exchange Ratio"). The "Adjustment Spread" shall equal (x)
the aggregate market price on the date of such event of the number of Adjustment
Shares determined pursuant to Section 11(a)(ii) hereof, minus (y) the Purchase
Price. Notwithstanding the foregoing, the Company may not effect such exchange
at any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries, or any trustee or fiduciary with respect to such plan acting in
such capacity), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the shares of the Company Common
Stock then outstanding.
(b) Immediately upon the determination of the Company's Board of Directors
to exchange any Rights pursuant to Section 34(a) and without any further action
or 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 Units
of Preferred Stock equal to the number of such Rights held by such holder
multiplied by the Section 34(a)(i) Exchange Ratio or Section 34(a)(ii) Exchange
Ratio, as the case may be. The Company shall promptly give public notice of any
such
48
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. Each such notice of
exchange shall state the method by which the exchange of Units of Preferred
Stock for Rights shall be effected and, in the event of any partial exchange,
the number of Rights that shall be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights that have
become void pursuant to Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Preferred Stock that are
authorized by the Company's Restated Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit any exchange of Rights as contemplated
in accordance with this Section 34, the Company shall take all such action as
may be necessary to authorize additional shares of Preferred Stock for issuance
upon exchange of the Rights or make adequate provision to substitute (1) cash,
(2) Company Common Stock or other equity securities of the Company, (3) debt
securities of the Company, (4) other assets or (5) any combination of the
foregoing, having an aggregate value equal to the Adjustment Spread, where such
aggregate value has been determined by the Company's Board of Directors.
(d) The Company shall not be required to issue fractions of Units of
Preferred Stock or to distribute certificates that evidence fractional Units. In
lieu of fractional Units, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exchanged as herein provided an
amount in cash equal to the same fraction of the current market price
(determined pursuant to Section 11(d) hereof) of one Unit of Preferred Stock.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
ONEIDA LTD.
By: /s/ XXXXX X. XXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxx
Title: President & Chief Executive Officer
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: /s/ XXXXX XXXXXXXXX
--------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
49
Exhibit A
[Form of Rights Certificates]
Certificate No. _______________ ____________ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS
AGREEMENT). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED
IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*
* The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
Rights Certificate
ONEIDA LTD.
This certifies that ________________, or registered assigns, is the registered
holder of the number of Rights set forth above, each of which entitles the
registered holder thereof, subject to the terms and conditions of the Amended
and Restated Rights Agreement dated as of December 3, 1999 (the "Rights
Agreement") between Oneida Ltd., a New York corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York corporation, as Rights Agent
(the "Rights Agent", which term shall include any successor Rights Agent under
the Rights Agreement), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
the Expiration Date (as such term is defined in the Rights Agreement) at the
office of the Rights Agent or its successor designated for such purpose, one
one-thousandth of a fully paid nonassessable share of Series A Preferred Stock,
par value $1.00 per share (the "Preferred Stock"), of the Company at the
Purchase Price initially of $115.00 per one one-thousandth share (each such one
one-thousandth of a share being a "Unit") of Preferred Stock, upon presentation
and surrender of this Rights Certificate with the Election to Purchase and
related certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of Units which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per Unit set forth above shall
be subject to adjustment in certain events as provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined in the Rights Agreement) or,
under certain circumstances described in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the rights evidenced
hereby may entitle the registered holder thereof to purchase capital stock of an
entity other than the Company or receive cash or other assets, all as provided
in the Rights Agreement.
50
This Rights Certificate is subject to all of the terms and conditions of the
Rights Agreement, which terms and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available from the Rights
Agent or the Company upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company under certain circumstances at its
option at a redemption price of $.01 per Right, payable at the Company's option
in cash or in common stock of the Company, subject to adjustment in certain
events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock or
of any other securities 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 or subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal. Dated as of ______________, __.
ATTEST: ONEIDA LTD.
By: By:
--------------------------------- ------------------------------------
Name: Name:
Title: Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
By:
---------------------------------
Authorized Signature
51
(Form of Reverse Side of Rights Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and transfers
unto ______________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________, __
----------------------------------------
Signature
Signature Guaranteed:
52
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate of an Acquiring Person.
Dated: _________________, __
----------------------------------------
Signature
Signature Guaranteed:
--------------------------------------------------------------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
In the event the certification set forth above is not completed, the Company
will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
53
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights represented
by the Rights Certificate.)
TO: ONEIDA LTD.
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Rights Certificate to purchase the Units of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other Person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units be issued
in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security or other identifying number:
________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security or other identifying number:
______________________________
Dated: _________________, __
----------------------------------------
Signature
54
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.
Dated: _________________, __
----------------------------------------
Signature
Signature Guaranteed:
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Election to Purchase and Certificate must conform
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
In the event the certification set forth above is not completed, the Company
will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
55
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On December 13, 1989, the Board of Directors of Oneida Ltd. (the "Company")
declared a distribution of one right for each outstanding share of Common Stock,
par value $1.00 per share (the "Company Common Stock"), to shareholders of
record at the close of business on December 26, 1989 and for each share of
Company Common Stock issued (including shares distributed from Treasury) by the
Company thereafter and prior to the Distribution Date. Each right entitled the
registered holder, subject to the terms of a Rights Agreement executed by the
Company and Chase Lincoln First Bank, N.A., as rights agent, dated as of
December 13, 1989, to purchase from the Company one one-thousandth of a share (a
"Unit") of Series A Preferred Stock, par value $1.00 per share (the "Preferred
Stock").
Pursuant to authorization of the Board of Directors of the Company at a
meeting properly noticed and convened on October 27, 1999, the Company and
American Stock Transfer & Trust Company, as Rights Agent, executed an Amended
and Restated Rights Agreement dated as of December 3, 1999 (the "Rights
Agreement") to, among other things, (a) provide that each share of Company
Common Stock outstanding at the close of business on December 3, 1999 shall
entitle the holder thereof to one Right (each a "Right") to purchase a Unit at a
Purchase Price of $115.00 per Unit, subject to adjustment, (b) extend the Final
Expiration Date, and (c) include provisions to permit the Company, at its
option, to exchange the outstanding and exercisable Rights for Units of
Preferred Stock. The Purchase Price is payable in cash or by certified or bank
check or money order payable to the order of the Company. The description and
terms of the Rights are set forth in the Rights Agreement.
Copies of the Rights Agreement and the Certificate of Amendment of Restated
Certificate of Incorporation (the "Certificate of Amendment") for the Preferred
Stock have been filed with the Securities and Exchange Commission as exhibits to
a Registration Statement on Form 8-A, as amended. Copies of the Rights Agreement
and the Certificate of Amendment are available free of charge from the Company.
This summary description of the Rights and the Preferred Stock does not purport
to be complete and is qualified in its entirety by reference to all the
provisions of the Rights Agreement and the Certificate of Amendment, including
the definitions therein of certain terms, which Rights Agreement and Certificate
of Amendment are incorporated herein by reference.
The Rights Agreement
Initially, the Rights will attach to all certificates representing shares
of outstanding Company Common Stock, and no separate Rights Certificates will be
distributed. The Rights will separate from the Company Common Stock and the
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement (the date of such announcement being the "Stock Acquisition Date")
that a person or group of affiliated persons (other than the Company, any
Subsidiary of the Company or any employee benefit plan of the Company or such
Subsidiary) has acquired, obtained the right to acquire, or otherwise obtained
beneficial ownership of 20% or more of the then outstanding shares of Voting
Stock, or (ii) 10 business days following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially owning 20% or
more of the then outstanding shares of Voting Stock. Until the Distribution
Date, (i) the Rights will be evidenced by Company Common Stock certificates and
will be transferred with and only with such Company Common Stock certificates,
(ii) new Company Common Stock certificates issued after December 3, 1999 (also
including shares distributed from Treasury) will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates representing outstanding Company Common Stock will
also constitute the transfer of the Rights associated with the Company Common
Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the tenth anniversary of the Rights Agreement unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
56
In the event that (i) the Company is the surviving corporation in a merger
with an Acquiring Person and shares of Company Common Stock shall remain
outstanding, (ii) a Person becomes an Acquiring Person, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an Acquiring Persons, an
event occurs which results in such Acquiring Person's ownership interest being
increased by more than 1% (e.g., by means of a reverse stock split or
recapitalization), then in each such case, each holder of a Right will
thereafter have the right to receive, upon exercise, Units of Preferred Stock
having a value equal to two times the exercise price of the Right. The exercise
price is the Purchase Price multiplied by the number of Units of Preferred Stock
issuable upon exercise of a Right prior to the events described in this
paragraph. Notwithstanding any of the foregoing, following the occurrence of any
of the events set forth in this Paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction
and the Company is not the surviving corporation, (ii) any Person consolidates
or merges with the Company and all or part of the Company Common Stock is
converted or exchanged for securities, cash or property of any other Person or
(iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to receive, upon
exercise, common stock of the other Person to such transaction having a value
equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
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 Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to the
holders of the Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exception, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
In the event any Person or group becomes an Acquiring Person, the Company=s
Board of Directors may, at its option, require all or any portion of the
outstanding Rights to be exchanged for (i) one Unit of Preferred Stock or (ii)
Units of Preferred Stock in an amount equal to (x) the difference between the
aggregate market price of the number of Units to be received upon a Section
11(a)(ii) Event and the Purchase Price, divided by (y) the market price per Unit
of Preferred Stock. However any rights held by an Acquiring Person would not be
entitled to participate in this exchange.
At any time until ten days following the Stock Acquisition Date, the
Company may, by action of the Company's Board of Directors, redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption Price"),
payable, at the election of the Company's Board of Directors, in cash or shares
of Company Common Stock. Immediately upon the action of the Company's Board of
Directors ordering the redemption of the Rights, the Rights will terminate and
the only right of the holders of the Rights will be to receive the Redemption
Price.
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. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended at any time
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement;
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provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
Description of Preferred Stock
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential quarterly
dividend rate of $0.12 per Unit but will, in any event, be entitled to a
dividend equal to the per share dividend declared on the Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $0.01 per Unit
or the per share amount paid in respect of a share of Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting together with the
Company Common Stock. The holders of Units of Preferred Stock, voting as a
separate class, shall be entitled to a dividend equal to the per share dividend
declared on the Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $0.01 per Unit
or the per share amount paid in respect of a share of Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting together with the
Company Common Stock. The holders of Units of Preferred Stock, voting as a
separate class, shall be entitled to elect two directors if dividends on the
Preferred Stock are in arrears for six fiscal quarters.
In the event of any merger, consolidation or other transaction in which
shares of the Company Common Stock are exchanged, each Unit of Preferred Stock
will be entitled to receive the per share amount paid in respect of each share
of Company Common Stock.
The rights of holders of Preferred Stock to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of the Company Common Stock.
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