1
XXXXXXX INCORPORATED
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., as Rights Agent
RIGHTS AGREEMENT
Dated as of December 9, 1998
2
TABLE OF CONTENTS
Section 1. Certain Definitions............................................................................1
Section 2. Appointment of Rights Agent....................................................................8
Section 3. Issue of Right Certificates....................................................................8
Section 4. Form of Right Certificates....................................................................10
Section 5. Countersignature and Registration.............................................................11
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates....................................11
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights.................................12
Section 8. Cancellation and Destruction of Right Certificates............................................13
Section 9. Availability of Shares of Preferred Stock.....................................................14
Section 10. Preferred Stock Record Date..................................................................15
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
Number of Rights..........................................................................15
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. .................................24
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.........................24
Section 14. Fractional Rights and Fractional Shares......................................................28
Section 15. Rights of Action.............................................................................29
Section 16. Agreement of Right Holders...................................................................29
Section 17. Right Certificate Holder Not Deemed a Stockholder............................................30
Section 18. Concerning the Rights Agent..................................................................30
Section 19. Merger or Consolidation or Change of Name of Rights Agent....................................31
Section 20. Duties of Rights Agent.......................................................................31
i
3
Section 21. Change of Rights Agent.......................................................................34
Section 22. Issuance of New Right Certificates...........................................................34
Section 23. Redemption...................................................................................35
Section 24. Exchange.....................................................................................36
Section 25. Notice of Certain Events.....................................................................37
Section 26. Notices......................................................................................38
Section 27. Supplements and Amendments...................................................................38
Section 28. Successors...................................................................................39
Section 29. Benefits of this Agreement...................................................................39
Section 30. Determinations and Actions by the Board of Directors.........................................39
Section 31. Severability.................................................................................39
Section 32. Governing Law................................................................................39
Section 33. Counterparts.................................................................................40
Section 34. Descriptive Headings.........................................................................40
ii
4
RIGHTS AGREEMENT
Rights Agreement, dated as of December 9, 1998 ("Agreement"),
between Xxxxxxx Incorporated, a Connecticut corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company, as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company on December 9,
1998 (i)(A) authorized the issuance and declared a dividend of one preferred
share purchase right (a "Class A Right") for each share of the Class A common
stock, $0.01 par value per share ("Class A Common Stock"), of the Company
outstanding as of the Close of Business (as hereinafter defined) on December 21,
1998 (the "Record Date"), each Class A Right representing the right to purchase
one one-thousandth (subject to adjustment) of a share of Series A Preferred
Stock (as hereinafter defined), upon the terms and subject to the conditions
hereinafter set forth and (B) further authorized and directed the issuance of
one Class A Right (subject to adjustment as provided herein) with respect to
each share of Class A Common Stock that shall become outstanding between the
Record Date and the earlier of the Distribution Date and the Expiration Date (as
such terms are hereinafter defined); provided, however, that Class A Rights may
be issued with respect to shares of Class A Common Stock that shall become
outstanding after the Distribution Date and prior to the Expiration Date in
accordance with Section 22 and (ii)(A) authorized the issuance and declared a
dividend of one preferred share purchase right (a "Class B Right") for each
share of the Class B common stock, $0.01 par value per share ("Class B Common
Stock"), of the Company outstanding as of the Close of Business on the Record
Date, each Class B Right representing the right to purchase one one-thousandth
(subject to adjustment) of a share of Series B Preferred Stock (as hereinafter
defined), upon the terms and subject to the conditions hereinafter set forth and
(B) further authorized and directed the issuance of one Class B Right (subject
to adjustment as provided herein) with respect to each share of Class B Common
Stock that shall become outstanding between the Record Date and the earlier of
the Distribution Date and the Expiration Date; provided, however, the Class B
Rights may be issued with respect to shares of Class B Common Stock that shall
become outstanding after the Distribution Date and prior to the Expiration Date
in accordance with Section 22.
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 meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such term is
hereinafter defined)
5
of 20% or more of the shares of Class A Common Stock then outstanding, but shall
not include an Exempt Person (as such term is hereinafter defined); provided,
however, that (i) if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring Person" became the
Beneficial Owner of a number of shares of Class A Common Stock such that the
Person would otherwise qualify as an "Acquiring Person" inadvertently
(including, without limitation, because (A) such Person was unaware that it
beneficially owned a percentage of Class A Common Stock that would otherwise
cause such Person to be an "Acquiring Person" or (B) such Person was aware of
the extent of its Beneficial Ownership of Class A Common Stock but had no actual
knowledge of the consequences of such Beneficial Ownership under this Agreement)
and without any intention of changing or influencing control of the Company,
then such Person shall not be deemed to be or to have become an "Acquiring
Person" for any purposes of this Agreement unless and until such Person shall
have failed to divest itself, as soon as practicable (as determined, in good
faith, by the Board of Directors of the Company), of Beneficial Ownership of a
sufficient number of shares of Class A Common Stock so that such Person would no
longer otherwise qualify as an Acquiring Person; (ii) if, as of the date hereof
or prior to the first public announcement of the adoption of this Agreement, any
Person is or becomes the Beneficial Owner of 20% or more of the shares of Class
A Common Stock outstanding, such Person shall not be deemed to be or to become
an "Acquiring Person" unless and until such time as such Person shall, after the
first public announcement of the adoption of this Agreement, become the
Beneficial Owner of additional shares of Class A Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Class A Common Stock or pursuant to a split or subdivision of the
outstanding Class A Common Stock), unless, upon becoming the Beneficial Owner of
such additional shares of Class A Common Stock, such Person is not then the
Beneficial Owner of 20% or more of the shares of Class A Common Stock then
outstanding; (iii) no Person shall become an "Acquiring Person" as the result of
an acquisition of shares of Class A Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of
shares of Class A Common Stock beneficially owned by such Person to 20% or more
of the shares of Class A Common Stock then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 20% or more of the shares of
Class A Common Stock then outstanding by reason of such share acquisitions by
the Company and shall thereafter become the Beneficial Owner of any additional
shares of Class A Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Class A Common Stock
or pursuant to a split or subdivision of the outstanding Class A Common Stock),
then such Person shall be deemed to be an "Acquiring Person" unless upon
becoming the Beneficial Owner of such additional shares of Class A Common Stock
such Person does not beneficially own 20% or more of the shares of Class A
Common Stock then outstanding; and (iv) no Person shall become an Acquiring
Person as the result of an acquisition of shares of Class A Common Stock by such
Person pursuant to a Permitted Tender Offer. For all purposes of this Agreement,
any calculation of the number of shares of Class A Common Stock outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Class A
2
6
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 General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, shall be
deemed to have "Beneficial Ownership" of and shall be deemed to "beneficially
own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to beneficially own, directly or indirectly,
within the meaning of Rule l3d-3 of the General Rules and
Regulations under the Exchange Act as in effect on the date
hereof;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities), or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (x) securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase, (y) securities which such Person has a right to acquire
upon the exercise of Rights at any time prior to the time that
any Person becomes an Acquiring Person or (z) securities issuable
upon the exercise of Rights from and after the time that any
Person becomes an Acquiring Person if such Rights were acquired
by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof ("Original Rights") or pursuant to Section
11(i) or Section 11(n) with respect to an adjustment to Original
Rights; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially
own, any security by reason of such agreement, arrangement or
understanding if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under
3
7
the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person and with respect to which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or disposing
of such securities of the Company; provided, however, that no
Person who is an officer, director or employee of an Exempt
Person shall be deemed, solely by reason of such Person's status
or authority as such, to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of or to "beneficially own" any securities
that are "beneficially owned" (as defined in this Section l(c)),
including, without limitation, in a fiduciary capacity, by an
Exempt Person or by any other such officer, director or employee
of an Exempt Person; provided, further, that no individual
serving as trustee of the Roche Trust or the Xxxxxxx Trust (each
as hereinafter defined) shall be deemed to beneficially own in
his individual capacity any shares of Class A Common Stock owned
by the Roche Trust or the Xxxxxxx Trust, whether or not the Roche
Trust and/or the Xxxxxxx Trust continues to have Exempt Person
(as hereinafter defined) status.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York or the
city in which the office of the Rights Agent is located are authorized or
obligated by law or executive order to close.
(e) "Class A Common Stock" shall have the meaning set forth in
the Recitals hereto.
(f) "Class B Common Stock" shall have the meaning set forth in
the Recitals hereto.
(g) "Class A Right" shall have the meaning set forth in the
Recitals hereto.
(h) "Class B Right" shall have the meaning set forth in the
Recitals hereto.
(i) "Class A Right Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(j) "Class B Right Certificate" shall have the meaning set forth
in Section 3(a) hereof.
4
8
(k) "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.
(l) "Common Stock" when used with reference to the Company shall
mean collectively and severally, as the context requires, the Class A Common
Stock and/or the Class B Common Stock. "Common Stock" when used with reference
to any Person other than the Company shall mean the common stock (or, in the
case of an unincorporated entity, the equivalent equity interest) with the
greatest voting power of such other Person or, if such other Person is a
subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(m) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(n) "Current Values" shall have the meaning set forth in Section
11(a)(iii) hereof.
(o) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(p) "equivalent preferred shares" shall have the meaning set
forth in Section 11(b) hereof.
(q) "Exempt Person" shall mean (i) the Company or any Subsidiary
(as such term is hereinafter defined) of the Company, in each case including,
without limitation, in its fiduciary capacity, (ii) any employee benefit plan of
the Company or of any Subsidiary of the Company, or any entity or trustee
holding Common Stock for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company, (iii) the Roche
Trust so long as it does not purchase shares of Class A Common Stock (x) from
any Person other than the Xxxxxxx Trust in an amount not in excess of the number
of shares of Class A Common Stock owned by the Xxxxxxx Trust as of the date of
this Agreement or (y) pursuant to a Permitted Tender Offer or (iv) the Xxxxxxx
Trust so long as it does not purchase shares of Class A Common Stock (x) from
any Person other than the Roche Trust in an amount not in excess of the number
of shares of Class A Common Stock owned by the Roche Trust as of the date of
this Agreement or (y) pursuant to a Permitted Tender Offer.
(r) "Exchange Ratio" shall have the meaning set forth in Section
24 hereof.
(s) "Expiration Date" shall have the meaning set forth in Section
7 hereof.
5
9
(t) "Flip-In Event" shall have the meaning set forth in Section
11(a)(ii) hereof.
(u) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(v) "Xxxxxxx Trust" shall mean the trust established under the
Trust Indenture dated August 23, 1953 made by Xxxxxx Xxxxxxx.
(w) "NASDAQ" shall mean The NASDAQ Stock Market.
(x) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(y) "Permitted Tender Offer" shall mean a fully-financed all cash
tender offer for all outstanding shares of both Class A Common Stock and Class B
Common Stock at the same price per share for each class of Common Stock and
otherwise on the same terms and conditions, which (i) is made pursuant to a
Schedule 14D-1 filed with the Securities and Exchange Commission, (ii) by its
terms stays open for a minimum of 60 Business Days and (iii) (A) is accepted (in
the case of clause (iv) of the definition of "Acquiring Person" and clauses
(iii)(y) and (iv)(y) of the definition of "Exempt Person") or (B) requires as a
non-waivable condition that such offer be accepted (for purposes of Section
3(a)) by the holders of at least two-thirds of the then outstanding Common Stock
of each class owned by Persons other than the Person making the tender offer (or
its Affiliates or Associates). A Permitted Tender Offer shall be deemed to be
"fully-financed" if, on or prior to the date such offer is commenced within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, such Person has, and has provided the Company, firm written commitments
from responsible financial institutions, which have been accepted by such Person
(or one of its Affiliates), to provide, subject only to customary terms and
conditions, funds for such offer which, when added to the amount of cash and
cash equivalents which such Person then has available and has irrevocable
committed in writing to the Company to utilize for purposes of such offer, will
be sufficient to pay for all the then outstanding Common Stock pursuant to the
offer and all related expenses, together with copies of all written materials
prepared by such Person for such financial institutions in connection with
obtaining such financing commitments.
(z) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity, and shall include
any successor (by merger or otherwise) to such entity.
(aa) "Preferred Stock" shall mean collectively and severally, as
the context requires, the Series A Preferred Stock and/or the Series B Preferred
Stock.
6
10
(bb) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(cc) "Record Date" shall have the meaning set forth in the
Recitals hereto.
(dd) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(ee) "Redemption Price" shall have the meaning set forth in
Section 23 hereof.
(ff) "Right Certificate" shall mean collectively or severally,
as the context shall require, the Class A Right Certificate and/or the Class B
Right Certificate.
(gg) "Rights" shall mean collectively or severally, as the
context shall require, the Class A Rights and/or the Class B Rights.
(hh) "Roche Trust" shall mean the trust established under a
Trust Indenture dated September 2, 1957 made by Xxxxx X. Xxxxx.
(ii) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(jj) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(kk) "Series A Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $10.00 per share, of the Company having
the rights and preferences set forth in the Form of Certificate of Amendment
attached to this Agreement as Exhibit A.
(ll) "Series B Preferred Stock" shall mean the Series B Junior
Participating Preferred Stock, par value $10.00 per share, of the Company having
the rights and preferences set forth in the Form of Certificate of Amendment
attached to this Agreement as Exhibit B.
(mm) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(nn) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such, or such earlier date as a majority of the Board of Directors shall become
aware of the existence of an Acquiring Person.
7
11
(oo) "Subsidiary" of any Person shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other
persons performing similar functions are beneficially owned, directly or
indirectly, by such Person, and any corporation or other entity that is
otherwise controlled by such Person.
(pp) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(qq) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(rr) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(ss) "Trusts" shall mean the Roche Trust and the Xxxxxxx Trust,
collectively.
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. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the Close of Business on the earlier of (i) the tenth
day after the Stock Acquisition Date and (ii) the tenth Business Day (or such
later date as may be determined by action of the Board of Directors prior to
such time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than an Exempt Person; provided, however, that
for the purpose of this Section 3(a) the Trusts shall be excluded from the
definition of Exempt Person) of, or of the first public announcement of the
intention of such Person (other than an Exempt Person; provided, however, that
for the purpose of this Section 3(a) the Trusts shall be excluded from the
definition of Exempt Person) to commence, a tender or exchange offer (other than
a Permitted Tender Offer) the consummation of which would result in any Person
(other than an Exempt Person; provided, however, that for the purpose of this
Section 3(a) the Trusts shall be excluded from the definition of Exempt Person)
becoming the Beneficial Owner of shares of Common Stock aggregating 20% or more
of the Class A Common Stock then outstanding (the earlier of such dates being
herein referred to as the "Distribution Date"); provided, however, that if
either of such dates occurs after the date of this Agreement and on or prior to
the Record Date, then the Distribution Date shall be the Record Date), (x) the
Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by
the
8
12
certificates for Common Stock registered in the names of the holders thereof and
not by separate Right Certificates, and (y) the Rights will be transferable only
in connection with the transfer of Common Stock. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign and the Company will send or cause to be sent (and the Rights
Agent will, if requested and provided with all necessary information, send) by
first-class, insured, postage-prepaid mail, (A) to each record holder of the
Class A Common Stock as of the Close of Business on the Distribution Date (other
than any Acquiring Person or any Associate or Affiliate of an Acquiring Person),
at the address of such holder shown on the records of the Company, a Class A
Right Certificate in substantially the form of Exhibit C hereto ("Class A Right
Certificate") evidencing one Class A Right (subject to adjustment as provided
herein) for each share of Class A Common Stock so held and (B) to each record
holder of the Class B Common Stock as of the Close of Business on the
Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person), at the address of such holder shown on the records of
the Company, a Class B Right Certificate in substantially the form of Exhibit D
hereto ("Class B Right Certificate") evidencing one Class B Right (subject to
adjustment as provided herein) for each share of Class B Common Stock so held.
As of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Shares of Preferred
Stock, in substantially the form of Exhibit E hereto (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Common Stock as
of the Close of Business on the Record Date (other than any Acquiring Person or
any Associate or Affiliate of any Acquiring Person), at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights. Until the Distribution Date
(or, if earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.
(c) Rights shall be issued in respect of all shares of Common
Stock issued or disposed of (including, without limitation, upon issuance of
Common Stock out of authorized but unissued shares) after the Record Date but
prior to the earlier of the Distribution Date and the Expiration Date, or in
certain circumstances provided in Section 22 hereof, after the Distribution
Date. Certificates issued for Common Stock (including, without limitation, upon
transfer of outstanding Common Stock or issuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the earlier
of the Distribution Date and the Expiration Date, or in certain circumstances
provided in Section 22 hereof, after the Distribution Date shall have impressed
on, printed on, written on or otherwise affixed to them the following legend:
9
13
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Xxxxxxx
Incorporated (the "Company") and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, dated as of December 9, 1998
and as amended from time to time (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices of
the Company. 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 Company will mail to the holder of this certificate a copy of
the Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights owned by or transferred to any
Person who is or becomes an Acquiring Person (as defined in the
Rights Agreement) and certain transferees thereof will become
null and void and will no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of the Common Stock which are no longer
outstanding.
Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Agreement or the rights
of any holder of the Rights.
Section 4. Form of Right Certificates. The Class A Right
Certificates and the Class B Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit C hereto and Exhibit D hereto,
respectively, and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate which do not affect the duties or responsibilities of the Rights
Agent and as are not inconsistent with the provisions of this Agreement, or as
may be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange or
interdealer quotation system on which the Rights may from time to time be listed
or quoted, or to conform to usage. Subject to the provisions of this Agreement,
the Right Certificates shall entitle the holders thereof to purchase such number
of one one-thousandths of a share of Series A Preferred Stock or Series B
Preferred Stock, as the case may be, as shall be set forth therein at the price
per
10
14
one one-thousandth of a share of Series A Preferred Stock or Series B Preferred
Stock, as the case may be, set forth therein (the "Purchase Price"), but the
number of such one one-thousandths of a share of Series A Preferred Stock or
Series B Preferred Stock, as the case may be, and the Purchase Price shall be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, the President of the Company, or any
Executive Vice President, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof and shall be attested
by the Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights
Agent of all necessary information, the Rights Agent will keep or cause to be
kept, at an office or agency designated for such purpose, books for registration
and transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of this Agreement, at any time
after the Distribution Date and prior to the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-thousandths of a share of
Series A Preferred Stock or Series B Preferred Stock, as the case may be, as the
Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined or exchanged at the
office or agency of the Rights Agent designated for such purpose. Thereupon the
Rights Agent shall countersign
11
15
and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates. The Rights Agent shall have no duty or obligation under this
Section unless and until it is satisfied that all such taxes and/or charges have
been paid.
(b) Subject to the provisions of this Agreement, at any time
after the Distribution Date and prior to the Expiration Date, upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security satisfactory to them,
and, at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price; Expiration Date of
Rights.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly and properly executed, to the Rights
Agent at the office or agency of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the total
number of one one-thousandths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which the Rights are
exercised, at any time which is both after the Distribution Date and prior to
the time (the "Expiration Date") that is the earliest of (i) the Close of
Business on December 31, 2008 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date") and (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price shall be initially $175.00 for each one
one-thousandth of a share of Series A Preferred Stock or Series B Preferred
Stock purchasable upon the exercise of a Right. The Purchase Price and the
number of one one-thousandths of a share of Series A Preferred Stock or Series B
Preferred Stock or other securities or property to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as provided in Sections
11 and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) of this Section 7.
12
16
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly and properly executed, accompanied by payment of the aggregate
Purchase Price for the shares of Preferred Stock to be purchased and an amount
equal to any applicable tax or charge required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof, in cash or by certified
check, cashier's check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred Stock certificates for the number of shares of Preferred
Stock to be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests or (B) requisition from a depositary
agent appointed by the Company depositary receipts representing interests in
such number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs any such depositary agent to comply with
such request, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate.
(d) Except as otherwise provided herein, in case the registered
holder of any Right Certificate shall exercise less than all of the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to the
exercisable Rights remaining unexercised shall be issued by the Rights Agent to
the registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 hereof or this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of assignment or form of election to purchase
set forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company or
the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall
13
17
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the Company, or shall, at
the written request of the Company, destroy such canceled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will 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 will be sufficient
to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock issuable upon the
exercise of Rights may be listed or admitted to trading on any national
securities exchange, or quoted on NASDAQ, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed or admitted to trading on such exchange,
or quoted on NASDAQ, upon official notice of issuance upon such exercise.
(c) From and after such time as the Rights become exercisable,
the Company shall use its best efforts, if then necessary to permit the issuance
of shares of Preferred Stock upon the exercise of Rights, to register and
qualify such shares of Preferred Stock under the Securities Act and any
applicable state securities or "Blue Sky" laws (to the extent exemptions
therefrom are not available), cause such registration statement and
qualifications to become effective as soon as possible after such filing and
keep such registration and qualifications effective until the earlier of the
date as of which the Rights are no longer exercisable for such securities and
the Expiration Date. The Company may temporarily suspend, for a period of time
not to exceed 90 days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect with prompt notice thereof to the Rights Agent. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained and until a registration statement under
the Securities Act (if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates therefor (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.
14
18
(e) The Company further covenants and agrees that it will pay
when due and payable any and all taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any shares
of Preferred Stock upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax or charge which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Stock in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Stock upon the exercise of
any Rights until any such tax or charge shall have been paid (any such tax or
charge being payable by that holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax or charge is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable taxes or
charges) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Stock for which the
Rights shall be exercisable, including, without limitation, the right to vote or
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 and Number of Rights. The Purchase Price, the number of shares of
Preferred Stock or other securities or property purchasable upon exercise of
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date
of this Agreement (A) declare and pay 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 of
Preferred Stock 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 number and kind of shares of capital stock issuable on the effective date of
such subdivision, combination or reclassification, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate
15
19
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, the holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person (the first occurrence of such event being
referred to hereinafter as the "Flip-In Event"), then (A) the Purchase Price
shall be adjusted to be the Purchase Price in effect immediately prior to the
Flip-In Event multiplied by the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
Flip-In Event, whether or not such Right was then exercisable and (B) each
holder of a Right, except as otherwise provided in this Section 11(a)(ii) and
Section 11(a)(iii) hereof, shall thereafter have the right to receive, upon
exercise thereof at a price equal to the Purchase Price (as so adjusted), in
accordance with the terms of this Agreement and in lieu of shares of Preferred
Stock, such number of shares of Class A Common Stock, in the case of Class A
Rights, and such number of shares of Class B Common Stock, in the case of Class
B Rights, as shall equal the result obtained by dividing the Purchase Price (as
so adjusted) by 50% of the current per share market price of the Class A Common
Stock, in the case of the Class A Rights, and by 50% of the current per share
market price of the Class B Common Stock, in the case of the Class B Rights, (in
each case, determined pursuant to Section 11(d) hereof) on the date of such
Flip-In Event; provided, however, that the Purchase Price (as so adjusted) and
the number of shares of Class A Common Stock or Class B Common Stock, as the
case may be, so receivable upon exercise of a Right shall, following the Flip-In
Event, be subject to further adjustment as appropriate in accordance with
Section 11(f) hereof. Notwithstanding anything in this Agreement to the
contrary, however, from and after the Flip-In Event, any Rights that are
beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of
any Acquiring Person), (y) a transferee of any Acquiring Person (or any such
Affiliate or Associate) who becomes a transferee after the Flip-In Event or (z)
a transferee of any Acquiring Person (or any such Affiliate or Associate) who
became a transferee prior to or concurrently with the Flip-In Event pursuant to
either (I) a transfer from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of this
paragraph, and subsequent transferees of such Persons, shall be null and void
without any further action and any holder of such Rights shall thereafter have
no rights whatsoever with respect to such Rights under any provision of this
Agreement. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11(a)(ii) are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or its
Affiliates,
16
20
Associates or transferees hereunder. From and after the Flip-In Event, no Right
Certificate shall be issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become null and void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become null and void pursuant to
the provisions of this paragraph shall be canceled. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only in accordance with Section 13 and not pursuant to
this Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of
Class A Common Stock or a share of Class B Common Stock, as the case may be,
issuable upon the exercise of Rights in accordance with the foregoing
subparagraph (ii) a number of shares of Series A Preferred Stock or Series B
Preferred Stock, as the case may be, or fraction thereof such that the current
per share market price of one share of Series A Preferred Stock or Series B
Preferred Stock, as the case may be, multiplied by such number or fraction is
equal to the current per share market price of one share of Class A Common Stock
or Class B Common Stock, as the case may be. In the event that there shall not
be sufficient shares of Common Stock authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii), the Board of Directors shall, to the extent permitted by applicable law
and any material agreements then in effect to which the Company is a party (A)
determine the excess (such excess, the "Spread") of (1) the value of the shares
of Common Stock issuable upon the exercise of each Class A Right and each Class
B Right in accordance with the foregoing subparagraph (ii) (respectively, the
"Current Values") over (2) the Purchase Price (as adjusted in accordance with
the foregoing subparagraph (ii)), and (B) with respect to each Right (other than
Rights which have become null and void pursuant to the foregoing subparagraph
(ii)), make adequate provision to substitute for the shares of Class A Common
Stock or Class B Common Stock, as the case may be, issuable in accordance with
the foregoing subparagraph (ii) upon exercise of the Right and payment of the
Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a reduction
in such Purchase Price, (3) shares of Series A Preferred Stock or Series B
Preferred Stock, as the case may be, or other equity securities of the Company
(including, without limitation, shares or fractions of shares of preferred stock
which, by virtue of having dividend, voting and liquidation rights substantially
comparable to those of the shares of Common Stock of the applicable class, are
deemed in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock of the applicable class (such shares of
Preferred Stock and shares or fractions of shares of preferred stock are
hereinafter referred to as "Common Stock Equivalents")), (4) debt securities of
the Company, (5) other assets or (6) any combination of the foregoing, having a
value which, when added to the value of the shares of Common Stock issued upon
exercise of such Right, shall have an aggregate value equal to the Current Value
(less the amount of any reduction in such Purchase Price), where such aggregate
value has been determined by the Board of Directors upon the advice of a
nationally recognized investment banking firm selected in good faith by the
Board of Directors; provided, however, that if the Company shall not make
adequate provision to deliver value pursuant
17
21
to clause (B) above within thirty (30) days following the date of the Flip-In
Event (the "Section 11(a) (ii) Trigger Date"), then the Company shall be
obligated to deliver, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, upon the surrender
for exercise of a Right and without requiring payment of such Purchase Price,
shares of Common Stock of the applicable class (to the extent available), and
then, if necessary, such number or fractions of shares of Preferred Stock of the
applicable series (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If, upon the
occurrence of the Flip-In Event, the Board of Directors shall determine in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, then, if the
Board of Directors so elects, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90) days after the
Section 11(a) (ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such thirty (30) day
period, as it may be extended, is herein called the "Substitution Period"). To
the extent that the Company determines that some action need be taken pursuant
to the second and/or third sentence of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 11(a)(ii) hereof and the last sentence of this
Section 11(a)(iii) hereof, that such action shall apply uniformly to all
outstanding Class A Rights and Class B Rights and (y) may suspend the
exercisability of the Class A Rights and the Class B Rights until the expiration
of the Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant
to such second sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Class A Rights and the Class B Rights have been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect in each case, with prompt notice thereof to
the Rights Agent. For purposes of this Section 11(a)(iii), the value of the
shares of Class A Common Stock and the Class B Common Stock, as the case may be,
shall be the current per share market price (as determined pursuant to Section
11(d)(i)) on the Section 11(a)(ii) Trigger Date and the per share or fractional
value of any "Common Stock Equivalent" shall be deemed to equal the current per
share market price of the Class A Common Stock or the Class B Common Stock, as
the case may be. The Board of Directors of the Company may, but shall not be
required to, establish procedures to allocate the right to receive (a) shares of
Class A Common Stock upon the exercise of the Class A Rights among holders of
Class A Rights and (b) shares of Class B Common Stock upon the exercise of the
Class B Rights among holders of Class B Rights, in each case, pursuant to this
Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("equivalent preferred
shares")) or securities convertible into Preferred Stock or equivalent preferred
shares at a price per share of Preferred Stock or equivalent preferred shares
(or having a conversion price per share, if a security convertible into shares
of Preferred Stock
18
22
or equivalent preferred shares) less than the then current per share market
price of the Preferred Stock (determined pursuant to Section 11(d) hereof) on
such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock and equivalent preferred shares outstanding
on such record date plus the number of shares of Preferred Stock and equivalent
preferred shares which the aggregate offering price of the total number of
shares of Preferred Stock and/or equivalent preferred shares so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of shares of Preferred Stock and equivalent
preferred shares outstanding on such record date plus the number of additional
shares of Preferred Stock and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock and equivalent preferred
shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred 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
then current per share market price of the Preferred Stock (determined pursuant
to Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one share of Preferred
Stock, and the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company to be issued upon exercise of one Right. Such adjustments shall
be made
19
23
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d)(i) Except as otherwise provided herein, for the purpose of
any computation hereunder, the "current per share market price " of any security
(a "Security " for the purpose of this Section 11(d)(i)) on any date shall be
deemed to be the average of the daily closing prices per share of such Security
for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to but not including such date; provided, however, that in the
event that the current per share market price of the Security is determined
during a period following the announcement by the issuer of such Security of (A)
a dividend or distribution on such Security payable in shares of such Security
or securities convertible into such shares or (B) any subdivision, combination
or reclassification of such Security, and prior to the expiration of 30 Trading
Days after but not including the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported by the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
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 Security is not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Security selected by the
Board of Directors of the Company. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the Security is listed
or admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national securities
exchange, but is quoted on NASDAQ or such other system then in use, a day on
which NASDAQ or such other system is open for the transaction of business, or,
if not so quoted, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the "current per share market price" of the
Preferred Stock shall be determined in accordance with the method set forth in
Section 11(d)(i). If the Preferred Stock is not publicly traded but the Common
Stock is publicly traded, the "current per share market price" of the Preferred
Stock shall be conclusively deemed to be the current per share market price of
the Common Stock as determined pursuant to Section 11(d)(i) multiplied by the
then applicable Adjustment Number (as defined in and determined in
20
24
accordance with the Certificate of Amendment for the Preferred Stock). If
neither the Common Stock nor the Preferred Stock is publicly traded, "current
per share market price" shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one hundred-thousandth of
a share of Preferred Stock or one-hundredth of a share of Common Stock or other
share or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than the Preferred
Stock, thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) hereof, as applicable, 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 one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and 11(c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Preferred Stock (calculated to the nearest one
hundred-thousandth of a share of Preferred Stock) obtained by (i) multiplying
(x) the number of one one-thousandths of a share purchasable upon the exercise
of a Right immediately prior to such adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment.
21
25
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price pursuant to Sections 11(b) or 11(c) hereof to adjust the
number of Rights, in substitution for any adjustment in the number of one
one-thousandths of a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-thousandths of a share 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
one-hundredth) 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 with prompt notice thereof to the Rights Agent. Such
record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company may, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of a Right, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-thousandths of a share of Preferred Stock which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the fraction of
Preferred Stock or other shares of capital stock issuable upon exercise of a
Right, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock or other such
shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company
22
26
may elect to defer with prompt notice thereof to the Rights Agent until the
occurrence of such event issuing to the holder of any Right exercised after such
record date the Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such adjustments in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current market
price, issuance wholly for cash of Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, dividends on
Preferred Stock payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) Anything in this Agreement to the contrary notwithstanding,
in the event that at any time after the date of this Rights Agreement and prior
to the Distribution Date, the Company shall (i) declare and pay any dividend on
the Common Stock payable in Common Stock or (ii) effect a subdivision,
combination or consolidation of the Common Stock (by reclassification or
otherwise than by payment of a dividend payable in Common Stock) into a greater
or lesser number of shares of Common Stock, then, in each such case, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by (A) in the case of the Class A Rights,
multiplying the number of Class A Rights associated with each share of Class A
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Class A Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Class A Common Stock outstanding
immediately following the occurrence of such event (for purposes of such
adjustment, in the event that the Company declares a stock dividend on the Class
A Common Stock payable in shares of Class B Common Stock, such dividend shall be
treated with respect to the Class A Common Stock as if it had been declared and
paid in shares of Class A Common Stock) and (B) in the case of the Class B
Rights, multiplying the number of Class B Rights associated with each share of
Class B Common Stock immediately prior to such event by a fraction the numerator
of which shall be the total number of shares of Class B Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Class B Common Stock outstanding
immediately following the occurrence of such event
23
27
(for purposes of such adjustment, in the event that the Company declares a stock
dividend on the Class A Common Stock payable in shares of Class B Common Stock,
such shares of Class B Common stock shall not be deemed outstanding immediately
following the occurrence of such event).
(o) The Company agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Sections 23, 24 or 27 hereof, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts and computations accounting for
such adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Stock and the Preferred Stock a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Right Certificate in accordance with
Section 25 hereof (if so required under Section 25 hereof). The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall have no duty with respect for 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 Power.
(a) In the event, directly or indirectly, at any time after the
Flip-In Event (i) the Company shall consolidate with or shall merge into any
other Person, (ii) any Person shall merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property or (iii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company or one or more
wholly-owned Subsidiaries of the Company), then upon the first occurrence of
such event, proper provision shall be made so that: (A) each holder of a Right
(other than Rights which have become null and void pursuant to Section 11(a)(ii)
hereof) shall thereafter have the right to receive, upon the exercise thereof at
the Purchase Price (as theretofore adjusted in accordance with Section 11(a)(ii)
hereof), in accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock or Common Stock of the Company, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens,
24
28
encumbrances, rights of first refusal or other adverse claims, as shall equal
the result obtained by dividing the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) by 50% of the current per share market
price of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; provided, however, that the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) and the number of shares
of Common Stock of such Principal Party so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in accordance with Section
11(f) hereof to reflect any events occurring in respect of the Common Stock of
such Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Rights Agreement; (C) the
term "Company" shall thereafter be deemed to refer to such Principal Party; and
(D) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its shares of Common Stock in
accordance with Section 9 hereof) in connection with such consummation of any
such transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights; provided that, upon the subsequent occurrence of any consolidation,
merger, sale or transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Purchase Price as provided
in this Section 13(a), such cash, shares, rights, warrants and other property
which such holder would have been entitled to receive had such holder, at the
time of such transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13(a), and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which the shares of Common Stock are converted in
such merger or consolidation, or, if there is more than one such issuer, the
issuer the shares of Common Stock of which have the greatest aggregate market
value of shares outstanding or (B) if no securities are so issued, (x) the
Person that is the other party to the merger, if such Person survives said
merger, or, if there is more than one such Person, the Person the shares of
Common Stock of which have the greatest aggregate market value of shares
outstanding or (y) if the Person that is the other party to the merger does not
survive the merger, the Person that does survive the merger (including the
Company if it survives) or (z) the Person resulting from the consolidation; and
25
29
(ii) in the case of any transaction described in (iii) of
the first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest 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 so transferred or if the Person receiving the greatest portion of
the assets or earning power cannot be determined, whichever of such Persons is
the issuer of Common Stock having the greatest aggregate market value of shares
outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time or has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, the term "Principal Party" shall refer to such other Person, or (2)
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of all of which is and has been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
Common Stock having the greatest aggregate market value of shares outstanding,
or (3) if such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (1) and (2) above shall apply to
each of the owners having an interest in the venture as if the Person owned by
the joint venture was a Subsidiary of both or all of such joint venturers, and
the Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ratio as its interest in such Person bears to the
total of such interests.
(c) The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) hereof unless prior thereto the
Company and the Principal Party involved therein shall have executed and
delivered to the Rights Agent an agreement confirming that the requirements of
Sections 13(a) and (b) hereof shall promptly be performed in accordance with
their terms and that such consolidation, merger, sale or transfer of assets
shall not result in a default by the Principal Party under this Agreement as the
same shall have been assumed by the Principal Party pursuant to Sections 13(a)
and (b) hereof and providing that, as soon as practicable after executing such
agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date and
similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York Stock
Exchange or on another
26
30
national securities exchange, to list or admit to trading (or continue the
listing of) the Rights and the securities purchasable upon exercise of the
Rights on the New York Stock Exchange or such securities exchange, or, if the
Common Stock of the Principal Party shall not be listed or admitted to trading
on the New York Stock Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to be
authorized for quotation on NASDAQ or on such other system then in use;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has any provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock or Common Stock Equivalents of such Principal Party at less than the then
current market price per share thereof (determined pursuant to Section 11(d)
hereof) or securities exercisable for, or convertible into, Common Stock or
Common Stock Equivalents of such Principal Party at less than such then current
market price, or (ii) providing for any special payment, tax or similar
provision 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
hereby agrees with each holder of Rights that it 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 Company covenants and agrees that it shall not, at any
time after the Flip-In Event, enter into any transaction of the type described
in clauses (i) through (iii) of Section 13(a) hereof if (i) at the time of or
immediately after such consolidation, merger, sale, transfer or other
transaction 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, (ii)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(b) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (iii) the
27
31
form or nature of organization of the Principal Party would preclude or limit
the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights
(except prior to the Distribution Date in accordance with Section 11(n) hereof).
In lieu of such fractional Rights, there shall be paid to the registered holders
of the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal 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 Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) or to distribute certificates
which evidence fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-thousandth of a share of Preferred Stock) upon
the exercise or exchange of Rights. Interests in fractions of Preferred Stock in
integral multiples of one one-thousandth of a share of Preferred Stock may, at
the election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised or exchanged as herein provided an amount in cash
equal to the
28
32
same fraction of the current market value of a whole share of Preferred Stock
(as determined in accordance with Section 14(a) hereof) for the Trading Day
immediately prior to the date of such exercise or exchange.
(c) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock upon the exercise or exchange of Rights. In lieu of such
fractional shares of Common Stock, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole share of Common Stock (as
determined in accordance with Section 14(a) hereof) for the Trading Day
immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise or exchange of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
this Agreement, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, such Common Stock) in the manner provided therein and in
this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or agency of the
29
33
Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the 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 Right Certificates or the 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 shall be affected by any notice to the
contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Stock or any
other securities of the Company which may at any time be issuable on the
exercise or exchange of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in this Agreement), or to
receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Right Certificate shall have been exercised or exchanged in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration, preparation, delivery,
amendment and execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
any action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including, without limitation,
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnity provided herein shall survive
the termination of this Agreement and the termination and the expiration of the
Rights. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such
30
34
loss or damage. Any liability of the Rights Agent under this Rights Agreement
will be limited to the amount of fees paid by the Company to the Rights Agent.
(b) The Rights Agent shall be authorized and protected and shall
incur no liability for, or in respect of any action taken, suffered or omitted
by it in connection with, its administration of this Agreement in reliance upon
any Right Certificate or certificate for the Preferred Stock or Common 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 be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, that such Person would be eligible for appointment as
a successor Rights Agent under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
only the duties and obligations expressly imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
31
35
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved (including, without limitation, the identity of any Acquiring
Person and the determination of current per share market price) or established
by the Company prior to taking, suffering or omitting any action hereunder, such
fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the President and the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
and protection to the Rights Agent and the Rights Agent shall incur no liability
for or in respect of any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming null and void pursuant to Section
11(a)(ii) hereof) or any adjustment in the terms of the Rights provided for in
Sections 3, 11, 13, 23 and 24, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 12, describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock or other securities to be issued pursuant to this Agreement
or any Right Certificate or as to whether any shares of Preferred Stock or other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further
32
36
and other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the President or the
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken, suffered or omitted by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. 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, suffered or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
suffered or such omission shall be effective. The Rights Agent shall not be
liable for any action taken or suffered 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 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,
suffered or omitted.
(h) The Rights Agent and any stockholder, director, affiliate,
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 Person.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith or willful misconduct
in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
33
37
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock or Preferred Stock by registered or certified
mail, and, following the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may 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
the laws of any state of the United States or the District of Columbia, in good
standing, which is authorized to do business under such laws and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock or Preferred Stock, and, following the Distribution Date, mail
a notice thereof in writing by first-class mail to the registered holders of the
Right Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its
34
38
option, issue new Right Certificates evidencing Rights in such forms as may be
approved by its Board of Directors to reflect any adjustment or change in the
Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Stock following the Distribution Date and prior to the Expiration
Date, the Company may with respect to shares of Common Stock so issued or sold
pursuant to (i) the exercise of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Company or (iv) a contractual obligation of
the Company, in each case existing prior to the Distribution Date, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at any time prior
to the Flip-In Event, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction with respect to
the Common Stock occurring after the date hereof (the redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
may be made effective at such time, on such basis and with such conditions as
the Board of Directors in its sole discretion may establish. The Redemption
Price shall be payable, at the option of the Company, in cash, shares of Common
Stock, or such other form of consideration as the Board of Directors shall
determine.
(b) Immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23 (or at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after such action of the
Board of Directors ordering the redemption of the Rights (or such later time as
the Board of Directors may establish for the effectiveness of such redemption),
the Company shall mail a notice of redemption to the Rights Agent and to all the
holders of the then outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption shall state
the method by which the payment of the Redemption Price will be made.
35
39
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after the Flip-In Event, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Stock at
an exchange ratio of one share of Class A Common Stock per Class A Right and one
share of Class B Common Stock per Class B Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction with respect to
the Common Stock occurring after the date hereof (such amount per Right being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after an Acquiring Person shall have become the Beneficial Owner of (i)
shares of Class A Common Stock aggregating 50% or more of the shares of Class A
Common Stock then outstanding or (ii) shares of Common Stock aggregating 50% or
more of the shares of Common Stock then outstanding. From and after the
occurrence of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exchanged pursuant to this Section 24(a) shall
thereafter be exercisable only in accordance with Section 13 and may not be
exchanged pursuant to this Section 24(a). The exchange of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board
of Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of the holders of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange with prompt notice thereof to the Rights Agent; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of the Rights so exchanged at their
last addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange of (a) Class A Rights shall be
effected pro rata based on the number of available shares of Class A Common
Stock and the number of Class A Rights (other than Class A Rights which have
become null and void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Class A Rights and (b) Class B Rights shall be effected
pro rata based on the number of available shares of Class B Common Stock and the
number of Class B Rights (other than Class B Rights which have become null and
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder
of Class B Rights.
36
40
(c) The Company may at its option substitute, and, in the event
that there shall not be sufficient shares of Class A Common Stock or Class B
Common Stock, as the case may be, authorized but unissued to permit an exchange
of Class A Rights or Class B Rights, as the case may be, for Class A Common
Stock or Class B Common Stock, as the case may be, as contemplated in accordance
with this Section 24, the Company shall substitute to the extent of such
insufficiency, for each share of Class A Common Stock or Class B Common Stock,
as the case may be, that would otherwise be issuable upon exchange of a Class A
Right or a Class B Right, as the case may be, a number of shares of Series A
Preferred Stock or Series B Preferred Stock, as the case may be, or fraction
thereof (or equivalent preferred shares, as such term is defined in Section
11(b)) such that the current per share market price (determined pursuant to
Section 11(d) hereof) of one share of Series A Preferred Stock or Series B
Preferred Stock, as the case may be, (or equivalent preferred share) multiplied
by such number or fraction is equal to the current per share market price of one
share of Class A Common Stock or Class B Common Stock, as the case may be,
(determined pursuant to Section 11(d) hereof) as of the date of such exchange.
Section 25. Notice of Certain Events.
(a) In case the Company shall at any time after the earlier of
the Distribution Date or the Stock Acquisition Date propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred Stock or
to make any other distribution to the holders of its Preferred Stock (other than
a regular quarterly cash dividend), (ii) to offer to the holders of its
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision or
combination of outstanding Preferred Stock), (iv) to effect the liquidation,
dissolution or winding up of the Company, or (v) to pay any dividend on the
Common Stock payable in Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock), then, in each such case, the Company
shall give to each holder of a Right Certificate and the Rights Agent, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or distribution
of rights or warrants, or the date on which such liquidation, dissolution or
winding up is to take place and the date of participation therein by the holders
of the Common Stock and/or 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 10 days prior to the record date for determining holders of
the Preferred Stock for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common Stock
and/or Preferred Stock, whichever shall be the earlier.
37
41
(b) In case any event described in Section 11(a)(ii) or Section
13 shall occur then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Xxxxxxx Incorporated
000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Relationship Manager
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of the Rights. At
any time when the Rights are no longer redeemable, except as provided in the
penultimate sentence of this Section 27, 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; provided that no such supplement or amendment
may (a) adversely affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
(b) cause this Agreement again to become amendable other than in accordance
38
42
with this sentence or (c) cause the Rights again to become redeemable.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which reduces the Redemption Price. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, and such supplement or amendment does not change or increase
the Rights Agent's duties, liabilities or obligations, the Rights Agent shall
execute such supplement or amendment.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Stock).
Section 30. Determinations and Actions by the Board of Directors.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise the rights and powers
specifically granted to the Board of Directors of the Company or to the Company,
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the Rights or to amend or
not amend this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board of Directors of the
Company in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights, as such, and all other
parties, and (y) not subject the Board of Directors to any liability to the
holders of the Rights.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Connecticut and for all purposes shall be governed by and
construed in accordance with the
39
43
laws of such State applicable to contracts to be made and performed entirely
within such State; provided, however, that all provisions regarding the rights,
duties and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
40
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, all as of the day and year first above written.
Xxxxxxx Incorporated
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: Vice President, General Counsel
and Secretary
------------------------------
ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxx
------------------------------
Title: Vice President
------------------------------
41
45
Exhibit A
FORM OF
CERTIFICATE OF AMENDMENT
with respect to
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
XXXXXXX INCORPORATED
Pursuant to Section 33-666 of the Connecticut Business Corporation Act
Xxxxxxx Incorporated (the "Company"), a corporation organized and
existing under the laws of Connecticut, in accordance with the provisions of
Section 33-637 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors
in accordance with the provisions of the Certificate of Incorporation of the
said Company, the said Board of Directors of the said Company on December 9,
1998 duly adopted the following amendment to said Certificate of Incorporation
in the form of a resolution creating a series of 56,000 shares of Preferred
Stock designated as "Series A Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Company in accordance with the
provisions of the Certificate of Incorporation, a series of
Preferred Stock, par value $10.00 per share, of the Company be
and hereby is created, that the designation and number of shares
thereof and the preferences, limitations and relative rights of
the shares of such series are as follows, and that the
Certificate of Incorporation be and hereby is amended by adding
the following at the end of paragraph FOURTH:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
1. Designation and Amount. There shall be a series of Preferred Stock that shall
be designated as "Series A Junior Participating Preferred Stock," and the number
of shares constituting such series shall be 56,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors and filing of a
Certificate of Amendment to the Certificate of Incorporation of the Company;
provided, however, that no decrease shall reduce the number of shares of Series
A Junior Participating Preferred Stock to less than the number of shares then
issued and outstanding plus the number of shares issuable upon exercise of
A-1
46
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Company.
2. Dividends and Distribution.
(A) Subject to the prior and superior rights of the holders of any shares of any
class or series of stock of the Company ranking prior and superior to the shares
of Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock, in
preference to the holders of shares of any class or series of stock of the
Company ranking junior to the Series A Junior Participating Preferred Stock in
respect thereof, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the 15th day of January, April, July and October,
in each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 and (b) the Adjustment Number (as
defined below) times the aggregate per share amount of all cash dividends, and
the Adjustment Number times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of the Class A Common Stock, par value $0.01, of the Company (the "Class
A Common Stock") or shares of the Class B Common Stock, par value $0.01, of the
Company (the "Class B Common Stock") declared on the Class A Common Stock or a
subdivision of the outstanding shares of Class A Common Stock (by
reclassification or otherwise), since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. The "Adjustment Number" shall initially be
1000. In the event the Company shall at any time after December 9, 1998 (i)
declare and pay any dividend on Class A Common Stock payable in shares of Class
A Common Stock or Class B Common Stock, (ii) subdivide the outstanding Class A
Common Stock or (iii) combine the outstanding Class A Common Stock into a
smaller number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number by a fraction the numerator of which is the number of shares of Class A
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Class A Common Stock that were outstanding
immediately prior to such event. For purposes of paragraph (A) of this Section
2, shares of Class B Common Stock declared as a dividend with respect to shares
of Class A Common Stock shall be treated as shares of Class A Common Stock.
(B) The Company shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Class A Common
Stock (other than a dividend payable in shares of Class A Common Stock or Class
B Common Stock).
A-2
47
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating Preferred Stock
shall entitle the holder thereof to a number of votes equal to the product of
(I) the Adjustment Number and (II) twenty (20) on all matters submitted to a
vote of the stockholders of the Company.
(B) Except as required by law and by Section 10 hereof, holders
of Series A Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with holders of Class A Common Stock as set forth herein) for
taking any corporate action.
(C) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Junior Participating
Preferred Stock are in default, the number of directors constituting the Board
of Directors of the Company shall be increased by two. In addition to voting
together with the holders of Class A Common Stock and Class B Common Stock for
the election of other directors of the Company, the holders of record of the
Series A Junior Participating Preferred Stock, voting separately as a class to
the exclusion of the holders of Class A Common Stock and Class B Common Stock,
shall be entitled at said meeting of stockholders (and at each subsequent annual
meeting of stockholders), unless all dividends in arrears on the Series A Junior
Participating Preferred Stock have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors of the Company,
the holders of any Series A Junior Participating Preferred Stock being entitled
to cast a number of votes per share of Series A Junior Participating Preferred
Stock as is
A-3
48
specified in paragraph (A) of this Section 3. Each such additional director
shall serve until the next annual meeting of stockholders for the election of
directors, or until his successor shall be elected and shall qualify, or until
his right to hold such office terminates pursuant to the provisions of this
Section 3(C). Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, without cause, only by the affirmative vote of the holders of the shares
of Series A Junior Participating Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Junior Participating
Preferred Stock shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like default in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of office of all persons who may have been elected directors
pursuant to said special voting rights shall forthwith terminate, and the number
of directors constituting the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(c) shall be in addition to any other
voting rights granted to the holders of the Series A Junior Participating
Preferred Stock in this Section 3.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A Junior Participating Preferred Stock outstanding shall have been paid in full,
the Company shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, except dividends paid ratably on the Series A
Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled; or
(iii) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock, or any shares of
stock ranking on a parity with the Series A Junior Participating Preferred
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of Series A
Junior Participating Preferred Stock, or to such holders and holders of any such
shares ranking on a parity therewith, upon such terms as the Board of Directors,
after
A-4
49
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes. For purposes of such determination, the Board of Directors of the
Company will not take into account the differences in the voting rights between
the Series A Junior Participating Preferred Stock and the Series B Junior
Participating Preferred Stock, par value $10.00, of the Company (the "Series B
Preferred Stock").
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall thereupon become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to any
conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation, dissolution or winding up of the Company, voluntary or otherwise,
no distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series A Junior Participating Preferred Stock shall have received
an amount per share (the "Series A Liquidation Preference") equal to the greater
of (i) $100 plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment and
(ii) the Adjustment Number times the per share amount of all cash and other
property to be distributed in respect of the Class A Common Stock upon such
liquidation, dissolution or winding up of the Company.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other classes and series of
stock of the Company, if any, that rank on a parity with the Series A Junior
Participating Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of the Series A
Junior Participating Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the Company into or
with another corporation nor the merger or consolidation of any other
corporation into or with the Company shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this Section 6.
7. Consolidation, Merger, Etc. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
outstanding shares of
A-5
50
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series A Junior
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share equal to the Adjustment Number times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Class A
Common Stock is changed or exchanged.
8. No Redemption. Shares of Series A Junior Participating
Preferred Stock shall not be subject to redemption by the Company.
9. Ranking. The Series A Junior Participating Preferred Stock
shall rank (a) junior to all other series of the Preferred Stock (other than the
Series B Preferred Stock) as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, unless the
terms of any such series shall provide otherwise, (b) pari passu with the Series
B Preferred Stock as to such matters and (c) senior to the Class A Common Stock
and the Class B Common stock as to such matters.
10. Amendment. At any time that any shares of Series A Junior
Participating Preferred Stock are outstanding, the Certificate of Incorporation
of the Company shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds of the outstanding shares of
Series A Junior Participating Preferred Stock, voting separately as a class.
11. Fractional Shares. Series A Junior Participating Preferred
Stock may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.
The foregoing amendment to the Certificate of Incorporation was
adopted by the Board of Directors without shareholder action. Shareholder vote
was not required for such adoption.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
of Amendment this __ day of _________________, 1998.
__________________________
Name:
Title:
X-0
00
Xxxxxxx X
FORM OF
CERTIFICATE OF AMENDMENT
with respect to
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
XXXXXXX INCORPORATED
Pursuant to Section 33-666 of the Connecticut Business Corporation Act
Xxxxxxx Incorporated (the "Company"), a corporation organized and
existing under the laws of Connecticut, in accordance with the provisions of
Section 33-637 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors
in accordance with the provisions of the Certificate of Incorporation of the
said Company, the said Board of Directors of the said Company on December 9,
1998 duly adopted the following amendment to said Certificate of Incorporation
in the form of a resolution creating a series of 280,000 shares of Preferred
Stock designated as "Series B Junior Participating Preferred Stock":
RESOLVED, that pursuant to the authority vested in the
Board of Directors of this Company in accordance with the
provisions of the Certificate of Incorporation, a series of
Preferred Stock, par value $10.00 per share, of the Company be
and hereby is created, that the designation and number of shares
thereof and the preferences, limitations and relative rights of
the shares of such series are as follows, and that the
Certificate of Incorporation be and hereby is amended by adding
the following at the end of paragraph FOURTH:
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
1. Designation and Amount. There shall be a series of Preferred
Stock that shall be designated as "Series B Junior Participating Preferred
Stock," and the number of shares constituting such series shall be 280,000 .
Such number of shares may be increased or decreased by resolution of the Board
of Directors and filing of a Certificate of Amendment to the Certificate of
Incorporation of the Company; provided, however, that no decrease shall reduce
the number of shares of Series B Junior Participating Preferred Stock to less
than the number of shares then issued and outstanding plus the number of shares
issuable upon exercise
B-1
52
of outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Company.
2. Dividends and Distribution.
(A) Subject to the prior and superior rights of the
holders of any shares of any class or series of stock of the Company ranking
prior and superior to the shares of Series B Junior Participating Preferred
Stock with respect to dividends, the holders of shares of Series B Junior
Participating Preferred Stock, in preference to the holders of shares of any
class or series of stock of the Company ranking junior to the Series B Junior
Participating Preferred Stock in respect thereof, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the 15th day
of January, April, July and October, in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series B Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $10.00 and (b)
the Adjustment Number (as defined below) times the aggregate per share amount of
all cash dividends, and the Adjustment Number times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of the Class B Common Stock, par value $0.01,
of the Company (the "Class B Common Stock") declared on the Class B Common Stock
or on shares of the Class A Common Stock, par value $0.01, of the Company (the
"Class A Common Stock") or a subdivision of the outstanding shares of Class B
Common Stock (by reclassification or otherwise), since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series B Junior Participating Preferred Stock. The "Adjustment Number"
shall initially be 1000. In the event the Company shall at any time after
December 9, 1998 (i) declare and pay any dividend on Class B Common Stock or
Class A Common Stock payable in shares of Class B Common Stock, (ii) subdivide
the outstanding Class B Common Stock or (iii) combine the outstanding Class B
Common Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Class B Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Class B Common
Stock that were outstanding immediately prior to such event. For purposes of
paragraph (A) of this Section 2, shares of Class B Common Stock declared as a
dividend with respect to shares of Class A Common Stock shall not be deemed
outstanding immediately following the occurrence of such event.
(B) The Company shall declare a dividend or distribution
on the Series B Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Class
B Common Stock (other than a dividend payable in shares of Class B Common Stock
or a dividend payable with respect to Class A Common Stock payable in shares of
Class B Common Stock).
B-2
53
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series B Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series B Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series B Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series B Junior
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series B Junior Participating Preferred
Stock shall entitle the holder thereof to a number of votes equal to the
Adjustment Number on all matters submitted to a vote of the stockholders of the
Company.
(B) Except as required by law and by Section 10 hereof,
holders of Series B Junior Participating Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Class B Common Stock as set forth herein)
for taking any corporate action.
(C) If, at the time of any annual meeting of stockholders
for the election of directors, the equivalent of six quarterly dividends
(whether or not consecutive) payable on any share or shares of Series B Junior
Participating Preferred Stock are in default, the number of directors
constituting the Board of Directors of the Company shall be increased by two. In
addition to voting together with the holders of Class B Common Stock and Class A
Common Stock for the election of other directors of the Company, the holders of
record of the Series B Junior Participating Preferred Stock, voting separately
as a class to the exclusion of the holders of Class B Common Stock and Class A
Common Stock, shall be entitled at said meeting of stockholders (and at each
subsequent annual meeting of stockholders), unless all dividends in arrears on
the Series B Junior Participating Preferred Stock have been paid or declared and
set apart for payment prior thereto, to vote for the election of two directors
of the Company, the holders of any Series B Junior Participating Preferred Stock
being entitled to cast a number of votes per share of Series B Junior
Participating Preferred Stock as is specified in paragraph (A) of this Section
3. Each such additional director shall serve until the next annual meeting of
stockholders for the election of directors, or until his successor shall be
B-3
54
elected and shall qualify, or until his right to hold such office terminates
pursuant to the provisions of this Section 3(C). Until the default in payments
of all dividends which permitted the election of said directors shall cease to
exist, any director who shall have been so elected pursuant to the next
preceding sentence may be removed at any time, without cause, only by the
affirmative vote of the holders of the shares of Series B Junior Participating
Preferred Stock at the time entitled to cast a majority of the votes entitled to
be cast for the election of any such director at a special meeting of such
holders called for that purpose, and any vacancy thereby created may be filled
by the vote of such holders. If and when such default shall cease to exist, the
holders of the Series B Junior Participating Preferred Stock shall be divested
of the foregoing special voting rights, subject to revesting in the event of
each and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of all
persons who may have been elected directors pursuant to said special voting
rights shall forthwith terminate, and the number of directors constituting the
Board of Directors shall be reduced by two. The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights granted to the
holders of the Series B Junior Participating Preferred Stock in this Section 3.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
B Junior Participating Preferred Stock outstanding shall have been paid in full,
the Company shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series B Junior
Participating Preferred Stock, except dividends paid ratably on the Series B
Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled; or
(iii) purchase or otherwise acquire for
consideration any shares of Series B Junior Participating Preferred Stock, or
any shares of stock ranking on a parity with the Series B Junior Participating
Preferred Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all holders of
Series B Junior Participating Preferred Stock, or to such holders and holders of
any such shares ranking on a parity therewith, upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and
B-4
55
equitable treatment among the respective series or classes. For purposes of such
determination, the Board of Directors of the Company will not take into account
the differences in the voting rights between the Series B Junior Participating
Preferred Stock and the Series A Junior Participating Preferred Stock, par value
$10.00, of the Company (the "Series A Preferred Stock").
(B) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series B Junior Participating
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall thereupon become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to any
conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation, dissolution or winding up of the Company, voluntary or otherwise,
no distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series B Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series B Junior Participating Preferred Stock shall have received
an amount per share (the "Series B Liquidation Preference") equal to the greater
of (i) $100 plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment and
(ii) the Adjustment Number times the per share amount of all cash and other
property to be distributed in respect of the Class B Common Stock upon such
liquidation, dissolution or winding up of the Company.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other classes and series of
stock of the Company, if any, that rank on a parity with the Series B Junior
Participating Preferred Stock in respect thereof, then the assets available for
such distribution shall be distributed ratably to the holders of the Series B
Junior Participating Preferred Stock and the holders of such parity shares in
proportion to their respective liquidation preferences.
(C) Neither the merger or consolidation of the Company
into or with another corporation nor the merger or consolidation of any other
corporation into or with the Company shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this Section 6.
7. Consolidation, Merger, Etc. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
outstanding shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series B Junior Participating Preferred
B-5
56
Stock shall at the same time be similarly exchanged or changed in an amount per
share equal to the Adjustment Number times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Class B Common Stock is changed or
exchanged.
8. No Redemption. Shares of Series B Junior Participating
Preferred Stock shall not be subject to redemption by the Company.
9. Ranking. The Series B Junior Participating Preferred Stock
shall rank (a) junior to all other series of the Preferred Stock (other than the
Series A Preferred Stock) as to the payment of dividends and as to the
distribution of assets upon liquidation, dissolution or winding up, unless the
terms of any such series shall provide otherwise, (b) pari passu with the Series
A Preferred Stock as to such matters and (c) senior to the Class A Common Stock
and the Class B Common stock as to such matters.
10. Amendment. At any time that any shares of Series B Junior
Participating Preferred Stock are outstanding, the Certificate of Incorporation
of the Company shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series B Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds of the outstanding shares of
Series B Junior Participating Preferred Stock, voting separately as a class.
11. Fractional Shares. Series B Junior Participating Preferred
Stock may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series B Junior Participating Preferred Stock.
The foregoing amendment to the Certificate of Incorporation was
adopted by the Board of Directors without shareholder action. Shareholder vote
was not required for such adoption.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
of Amendment this __ day of _________________, 1998.
_____________________
Name:
Title:
B-6
57
Exhibit C
Form of Class A Right Certificate
Certificate No. R-______
NOT EXERCISABLE AFTER DECEMBER 31, 2008 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE CLASS A RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER CLASS A RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, CLASS A RIGHTS OWNED BY OR TRANSFERRED TO ANY
PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED
IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF
WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
CLASS A RIGHT CERTIFICATE
XXXXXXX INCORPORATED
This certifies that ____________________________ or registered
assigns, is the registered owner of the number of Class A Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of December 9, 1998,
as the same may be amended from time to time (the "Rights Agreement"), between
Xxxxxxx Incorporated, a Connecticut corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York City time, on
December 31, 2008 at the office or agency of the Rights Agent designated for
such purpose, or of its successor as Rights Agent, one one-thousandth of a fully
paid non-assessable share of Series A Junior Participating Preferred Stock, par
value $10.00 per share (the "Series A Preferred Stock"), of the Company at a
purchase price of $175.00 per one one-thousandth of a share of Series A
Preferred Stock (the "Purchase Price"), upon presentation and surrender of this
Class A Right Certificate with the Form of Election to Purchase duly executed.
The number of Class A Rights evidenced by this Class A Right Certificate (and
the number of one one-thousandths of a share of Series A Preferred Stock which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of December 9, 1998, based
on the Series A Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one one-thousandths of a
share of Series A Preferred Stock (or other securities or property) which may be
purchased upon the exercise of the Class A Rights and the number of Class A
Rights evidenced by this
C-1
58
Class A Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Class A Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Class A Right
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office or agency of the
Rights Agent. The Company will mail to the holder of this Class A Right
Certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor.
This Class A Right Certificate, with or without other Class A
Right Certificates, upon surrender at the office or agency of the Rights Agent
designated for such purpose, may be exchanged for another Class A Right
Certificate or Class A Right Certificates of like tenor and date evidencing
Class A Rights entitling the holder to purchase a like aggregate number of
shares of Series A Preferred Stock as the Class A Rights evidenced by the Class
A Right Certificate or Class A Right Certificates surrendered shall have
entitled such holder to purchase. If this Class A Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Class A Right Certificate or Class A Right Certificates for the number
of whole Class A Rights not exercised.
Subject to the provisions of the Rights Agreement, the Class A
Rights evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Class A Right or (ii) may be exchanged in whole or
in part for shares of the Company's Class A Common Stock, par value $0.01 per
share ("Class A Common Stock"), or shares of Series A Preferred Stock.
No fractional shares of Series A Preferred Stock or Class A Common
Stock will be issued upon the exercise or exchange of any Class A Right or Class
A Rights evidenced hereby (other than fractions of Series A Preferred Stock
which are integral multiples of one one-thousandth of a share of Series A
Preferred Stock, which may, at the election of the Company, be evidenced by
depository receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Class A Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Series A Preferred Stock or of any other securities of the Company which may
at any time be issuable on the exercise or exchange hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to receive
dividends or subscription rights, or otherwise, until the Class A Right
C-2
59
or Class A Rights evidenced by this Class A Right Certificate shall have been
exercised or exchanged as provided in the Rights Agreement.
This Class A Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________ __, 199_ .
XXXXXXX INCORPORATED
By:_________________________________
[Title]
ATTEST:
__________________________________
[Title]
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
By:_______________________________
[Title]
C-3
60
Form of Reverse Side of Class A Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Class A Right Certificate)
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto______________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
_______ Class A Rights represented by this Class A Right Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint_____________________________ Attorney, to transfer said
Class A Rights on the books of the within-named Company, with full power of
substitution.
Dated: ____________________________
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized signature
guarantee medallion program.
____________________________________________
(To be completed)
The undersigned hereby certifies that the Class A Rights evidenced
by this Class A Right Certificate are not beneficially owned by, were not
acquired by the undersigned from, and are not being assigned to an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
__________________________________
Signature
C-4
61
Form of Reverse Side of Class A Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Class A Rights represented by the Class A Rights Certificate)
To XXXXXXX INCORPORATED:
The undersigned hereby irrevocably elects to exercise ________
Class A Rights represented by this Class A Right Certificate to purchase the
shares of Series A Preferred Stock (or other securities or property) issuable
upon the exercise of such Class A Rights and requests that certificates for such
shares of Series A Preferred Stock (or such other securities) be issued in the
name of:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Class A Rights shall not be all the Class A Rights evidenced
by this Class A Right Certificate, a new Class A Right Certificate for the
balance remaining of such Class A Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated:____________________________
__________________________________
Signature
(Signature must conform to holder specified on Class A Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized signature
guarantee medallion program.
C-5
62
Form of Reverse Side of Class A Right Certificate - continued
________________________________________________________________________________
(To be completed)
The undersigned certifies that the Class A Rights evidenced by
this Class A Right Certificate are not beneficially owned by, and were not
acquired by the undersigned from, an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
__________________________________
Signature
________________________________________________________________________________
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Class A Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
C-6
63
Exhibit D
Form of Class B Right Certificate
Certificate No. R-______
NOT EXERCISABLE AFTER DECEMBER 31, 2008 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE CLASS B RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER CLASS B RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE CLASS B RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, CLASS B RIGHTS OWNED BY OR
TRANSFERRED TO ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL
NO LONGER BE TRANSFERABLE.
Class B Right CERTIFICATE
XXXXXXX INCORPORATED
This certifies that ____________________________ or registered
assigns, is the registered owner of the number of Class B Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of December 9, 1998,
as the same may be amended from time to time (the "Rights Agreement"), between
Xxxxxxx Incorporated, a Connecticut corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York City time, on
December 31, 2008 at the office or agency of the Rights Agent designated for
such purpose, or of its successor as Rights Agent, one one-thousandth of a fully
paid non-assessable share of Series B Junior Participating Preferred Stock, par
value $10.00 per share (the "Series B Preferred Stock"), of the Company at a
purchase price of $175.00 per one one-thousandth of a share of Series B
Preferred Stock (the "Purchase Price"), upon presentation and surrender of this
Class B Right Certificate with the Form of Election to Purchase duly executed.
The number of Class B Rights evidenced by this Class B Right Certificate (and
the number of one one-thousandths of a share of Series B Preferred Stock which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of December 9, 1998, based
on the Series B Preferred Stock as constituted at such date. As provided in the
Rights Agreement, the Purchase Price, the number of one one-thousandths of a
share of Series B Preferred Stock (or other securities or property) which may be
purchased upon the exercise
D-1
64
of the Class B Rights and the number of Class B Rights evidenced by this Class B
Right Certificate are subject to modification and adjustment upon the happening
of certain events.
This Class B Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Class B Right
Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and the above-mentioned office or agency of the
Rights Agent. The Company will mail to the holder of this Class B Right
Certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor.
This Class B Right Certificate, with or without other Class B
Right Certificates, upon surrender at the office or agency of the Rights Agent
designated for such purpose, may be exchanged for another Class B Right
Certificate or Class B Right Certificates of like tenor and date evidencing
Class B Rights entitling the holder to purchase a like aggregate number of
shares of Series B Preferred Stock as the Class B Rights evidenced by the Class
B Right Certificate or Class B Right Certificates surrendered shall have
entitled such holder to purchase. If this Class B Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Class B Right Certificate or Class B Right Certificates for the number
of whole Class B Rights not exercised.
Subject to the provisions of the Rights Agreement, the Class B
Rights evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Class B Right or (ii) may be exchanged in whole or
in part for shares of the Company's Class B Common Stock, par value $0.01 per
share ("Class B Common Stock"), or shares of Series B Preferred Stock.
No fractional shares of Series B Preferred Stock or Class B Common
Stock will be issued upon the exercise or exchange of any Class B Right or Class
B Rights evidenced hereby (other than fractions of Series B Preferred Stock
which are integral multiples of one one-thousandth of a share of Series B
Preferred Stock, which may, at the election of the Company, be evidenced by
depository receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Class B Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Series B Preferred Stock or of any other securities of the Company which may
at any time be issuable on the exercise or exchange hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to receive
dividends or subscription rights, or otherwise, until the Class B Right
D-2
65
or Class B Rights evidenced by this Class B Right Certificate shall have been
exercised or exchanged as provided in the Rights Agreement.
This Class B Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________ __, 199_ .
XXXXXXX INCORPORATED
By:________________________________
[Title]
ATTEST:
__________________________________
[Title]
Countersigned:
ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent
By________________________________
[Title]
D-3
66
Form of Reverse Side of Class B Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Class B Right Certificate)
FOR VALUE RECEIVED __________________________ hereby sells,
assigns and transfers unto______________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
_______ Class B Rights represented by this Class B Right Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint__________________________________ Attorney, to transfer
said Class B Rights on the books of the within-named Company, with full power of
substitution.
Dated: ____________________________
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized signature
guarantee medallion program.
____________________________________________
(To be completed)
The undersigned hereby certifies that the Class B Rights
evidenced by this Class B Right Certificate are not beneficially owned by, were
not acquired by the undersigned from, and are not being assigned to an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
__________________________________
Signature
D-4
67
Form of Reverse Side of Class B Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Class B Rights represented by the Class B Right Certificate)
To XXXXXXX INCORPORATED:
The undersigned hereby irrevocably elects to exercise ________
Class B Rights represented by this Class B Right Certificate to purchase the
shares of Series B Preferred Stock (or other securities or property) issuable
upon the exercise of such Class B Rights and requests that certificates for such
shares of Series B Preferred Stock (or such other securities) be issued in the
name of:
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Class B Rights shall not be all the Class B Rights evidenced
by this Class B Right Certificate, a new Class B Right Certificate for the
balance remaining of such Class B Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated:________________________
__________________________________
Signature
(Signature must conform to holder specified on Class B Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in a recognized signature
guarantee medallion program.
D-5
68
Form of Reverse Side of Class B Right Certificate - continued
_______________________________________________________________________________
(To be completed)
The undersigned certifies that the Class B Rights evidenced by
this Class B Right Certificate are not beneficially owned by, and were not
acquired by the undersigned from, an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
__________________________________
Signature
_______________________________________________________________________________
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Class B Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such Assignment or Election to Purchase will not be honored.
D-6
69
Exhibit E
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON
WHO IS OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK OF
XXXXXXX INCORPORATED
On December 9, 1998, the Board of Directors of Xxxxxxx
Incorporated (the "Company") (a) declared a dividend of one preferred share
purchase right (a "Class A Right") for each outstanding share of Class A common
stock, par value $0.01 per share, of the Company (the "Class A Common Stock")
and declared a dividend of one preferred share purchase right (a "Class B Right"
and, collectively with Class A Rights, a "Right") for each outstanding share of
Class B common stock, par value $0.01 per share, of the Company (the "Class B
Common Stock" and, collectively with the Class A Common Stock, the "Common
Stock"). The dividend is payable on December 21, 1998 (the "Record Date") to the
stockholders of record on that date. Each Class A Right entitles the registered
holder to purchase from the Company one one-thousandth of a share of Series A
Junior Participating Preferred Stock, par value $10.00 per share, of the Company
(the "Series A Preferred Stock") at a price of $175.00 per one one-thousandth of
a share of Series A Preferred Stock (the "Series A Purchase Price") and each
Class B Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series B Junior Participating Preferred Stock, par
value $10.00 per share, of the Company (the "Series B Preferred Stock" and,
collectively with the Series A Preferred Stock, the "Preferred Stock") at a
price of $175.00 per one one-thousandth of a share of Series B Preferred Stock
(the "Series B Purchase Price" and, collectively with the Series A Purchase
Price, the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement dated as of December 9, 1998,
as the same may be amended from time to time (the "Rights Agreement"), between
the Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (with
certain exceptions, an "Acquiring Person") has acquired beneficial ownership of
20% or more of the outstanding shares of Class A Common Stock and (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person or group of affiliated persons
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer (other than a "permitted tender offer" (as
such term is described below)) or exchange offer the consummation of which would
result in the beneficial
E-1
70
ownership by a person or group of 20% or more of the outstanding shares of Class
A Common Stock (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced, with respect to any of the Common Stock
certificates outstanding as of the Record Date, by such Common Stock certificate
together with a copy of this Summary of Rights.
Initially, the Roche Trust and the Xxxxxxx Trust (collectively,
the "Trusts") will not be deemed Acquiring Persons even if either Trust or both
Trusts own over 20% of the Class A Common Stock. This "grandfathering"
protection would be extended to purchases by either Trust from the other Trust
of any or all shares held by the other Trust as of December 9, 1998. If either
Trust purchases Common Stock from a person other than the other Trust, the Trust
purchasing such shares will lose its right to buy shares from the other Trust
without becoming an Acquiring Person. The Trust which did not purchase shares in
the open market may continue to purchase shares from the Trust that did purchase
shares in the open market; provided that the shares purchased do not exceed the
number of shares held by the selling Trust as of December 9, 1998.
A person or group of affiliated persons will be deemed to make a
"permitted tender offer" if such person or group of affiliated persons makes a
fully-financed, all-cash tender offer for all outstanding shares of both Class A
Common Stock and Class B Common Stock at the same price per share for each class
that is accepted, or is conditioned upon the acceptance, by holders of at least
two-thirds of each of the Class A Common Stock and Class B Common Stock (other
than those shares held by the person making the tender offer).
The Rights Agreement provides that, until the Distribution Date
(or earlier expiration of the Rights), the Rights will be transferred with and
only with the Common Stock. Until the Distribution Date (or earlier expiration
of the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuances of Common Stock will contain a notation incorporating
the Rights Agreement by reference. Until the Distribution Date (or earlier
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights, will also constitute the transfer
of the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Class A Rights ("Class A Right Certificates") and
Class B Rights ("Class B Right Certificates" and, collectively with Class A
Right Certificates, "Right Certificates") will be mailed to holders of record of
the Common Stock as of the close of business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 31, 2008 (the "Final Expiration Date"), unless
the Final Expiration Date is advanced or extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described below.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the Rights is
subject to adjustment from time
E-2
71
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) upon
the grant to holders of the Preferred Stock of certain rights or warrants to
subscribe for or purchase Preferred Stock at a price, or securities convertible
into Preferred Stock with a conversion price, less than the then-current market
price of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
The number of outstanding Rights is subject to adjustment in the
event of a stock dividend on the Common Stock payable in shares of Common Stock
or subdivisions, consolidations or combinations of the Common Stock occurring,
in any such case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled, when, as
and if declared, to a minimum preferential quarterly dividend payment of $10 per
share but will be entitled to an aggregate dividend of 1000 times the dividend
declared per share of Common Stock. In the event of liquidation, dissolution or
winding up of the Company, the holders of the Preferred Stock will be entitled
to a minimum preferential payment of $100 per share (plus any accrued but unpaid
dividends) but will be entitled to an aggregate payment of 1000 times the
payment made per share of Common Stock. Each share of Series A Preferred Stock
will have 20,000 votes and each share of Series B Preferred Stock will have 1000
votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which outstanding shares of Common
Stock are converted or exchanged, each share of Preferred Stock will be entitled
to receive 1000 times the amount received per share of Class A Common Stock or
Class B Common Stock. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Stock's dividend,
liquidation and voting rights, the value of the one one-thousandth interest in a
share of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereupon become void),
will thereafter have the right to receive upon exercise of a Right that number
of shares of Common Stock having a market value of two times the exercise price
of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are sold,
proper provisions will be made so that each holder of a Right (other than Rights
beneficially owned by an Acquiring Person or an affiliate or an associate
thereof which will have become null and void) will thereafter have the right to
receive upon the exercise of a Right that number of shares of common stock of
the
E-3
72
person with whom the Company has engaged in the foregoing transaction (or its
parent) that at the time of such transaction have a market value of two times
the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person
and prior to the earlier of one of the events described in the previous
paragraph or the acquisition by such Acquiring Person of 50% or more of the
outstanding shares of Common Stock, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such Acquiring Person which will
have become void), in whole or in part, for shares of Class A Common Stock or
Class B Common Stock, as the case may be, or Series A Preferred Stock or Series
B Preferred Stock, as the case may be, (or a series of the Company's preferred
stock having equivalent rights, preferences and privileges), at an exchange
ratio of one share of Class A Common Stock or Class B Common Stock, as the case
may be, or a fractional share of Series A Preferred Stock or Series B Preferred
Stock, as the case may be, (or other preferred stock) equivalent in value
thereto, per Class A Right or Class B Right, as the case may be.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares of Preferred Stock or Common Stock
will be issued (other than fractions of Preferred Stock which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), and in lieu
thereof an adjustment in cash will be made based on the current market price of
the Series A Preferred Stock or Series B Preferred Stock, as the case may be, or
the Class A Common Stock or Class B Common Stock, as the case may be.
At any time prior to the time an Acquiring Person becomes such,
the Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price") payable, at the
option of the Company, in cash, shares of Common Stock or such other form of
consideration as the Board of Directors of the Company shall determine. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may,
except with respect to the Redemption Price, amend the Rights Agreement in any
manner. After the Rights are no longer redeemable, the Company may, except with
respect to the Redemption Price, amend the Rights Agreement in any manner that
does not adversely affect the interests of holders of the Rights.
Until a Right is exercised or exchanged, the holder thereof, as
such, will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
E-4
73
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated December __, 1998. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
E-5
