EXHIBIT 4.1
RIGHTS AGREEMENT
by and between
TASTY BAKING COMPANY
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
Dated as of July 30, 2003
TABLE OF CONTENTS
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Section Page
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1 Certain Definitions
2 Appointment of Rights Agent 4
3 Issuance of Rights Certificates 4
4 Form of Rights Certificates 6
5 Countersignature and Registration 6
6 Transfer, Split Up, Combination And Exchange Of Right
Certificates; etc. 7
7 Exercise Of Rights; Exercise Price; Expiration Date
Of Rights 7
8 Cancellation and Destruction of Right Certificates 9
9 Reservation and Availability of Common Shares 9
10 Common Shares Record Date 10
11 Adjustment of Exercise Price, Number and Kind of Shares
or Number of Rights 11
12 Certificate of Adjusted Exercise Price or Number of Shares 15
13 Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 15
14 Additional Covenants 18
15 Fractional Rights and Fractional Shares 19
16 Rights of Action 19
17 Agreement of Rights Holders 20
18 Right Certificate Holder Not Deemed a Stockholder 20
19 Concerning the Rights Agent 20
20 Merger or Consolidation or Change of Name of Rights Agent 21
21 Duties of Rights Agent 21
22 Change of Rights Agent 23
23 Issuance of New Right Certificates 23
24 Redemption 24
25 Exchange 24
26 Notice of Certain Events 25
27 Notices 26
28 Supplements and Amendments 26
29 Successors 27
30 Determinations and Actions by the Board of Directors 27
31 Benefits of this Agreement 27
32 Severability 28
33 Governing Law 28
34 Counterparts 28
35 Descriptive Headings 28
Exhibit A -- Form of Right Certificate
Exhibit B -- Summary of Rights to Purchase Common Stock
RIGHTS AGREEMENT
This RIGHTS AGREEMENT is dated as of July 30, 2003 (the "Agreement"), by and
between Tasty Baking Company, a Pennsylvania corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York corporation (the "Rights
Agent").
The Board of Directors of the Company has authorized and declared a dividend of
one Right (as such term is hereinafter defined) for each share of common stock,
$0.50 par value, of the Company (the "Common Shares") outstanding at the close
of business on July 30, 2003 (the "Record Date"), and has authorized the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date, the Exchange Date and the Final Expiration Date (as such
terms are hereinafter defined), each Right representing the right to purchase
one Common Share, upon the terms and subject to the conditions hereinafter set
forth (the "Rights").
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
a. "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the Common Shares
then outstanding, but shall not include (i) the Company, (ii) any Subsidiary (as
such term is hereinafter defined) of the Company, or (iii) any employee benefit
plan of the Company or of any Subsidiary of the Company or any Person organized,
appointed or established by the Company for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, (i) no Person shall become an "Acquiring
Person" solely as the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the Common
Shares then outstanding; provided, however, that if a Person becomes the
Beneficial Owner of 15% or more of the Common Shares then outstanding by reason
of share acquisitions by the Company and shall, after such share acquisitions,
become the Beneficial Owner of any additional Common Shares, then such Person
shall be deemed to be an "Acquiring Person", and (ii) no Person shall be deemed
an "Acquiring Person" if the Board of Directors determines that such Person
became such inadvertently, including but not limited to circumstances where such
Person (A) is unaware that he/she owned a percentage of the Common Shares that
would cause him/her to become an "Acquiring Person" or (B) is aware of his/her
percentage ownership but not of its consequences under this Agreement and has no
intention to control the Company and who with reasonable promptness reduces
his/her ownership below 15%.
b. "Affiliate", "Associate" and "control" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
c. A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, within the meaning of Rule 13d-3 or
Rule 13d-5 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding whether or not in writing (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", (A) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event (as such term is hereinafter
defined) or (C) securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(b) or Section 23 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(iii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of pursuant
to any agreement, arrangement or understanding whether or not in writing;
provided, however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own", any security under this subparagraph (iii) as a result
of an agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (1) arises solely from a revocable proxy
given to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iv) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person or
any of such Person's Affiliates or Associates has any agreement, arrangement or
understanding whether or not in writing (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 pursuant to a revocable proxy as described in the proviso to
subparagraph (iii) of this paragraph (c)) or disposing of any securities of the
Company.
If a Person shall be deemed to be the Beneficial Owner of any securities which
are not outstanding, such securities shall be deemed to be outstanding for
purposes of determining the percentage of Common Shares beneficially owned by
such Person.
d. "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
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e. "Close of business" on any given date shall mean 5:00 P.M., New
York, New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York, New York time, on the next
succeeding Business Day.
f. "Common Shares" when used with reference to the Company (or without
express reference to another Person) shall mean the shares of common stock,
$0.50 par value, of the Company or any other shares of capital stock of the
Company into which the Common Shares are reclassified or changed. "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock or other equity securities or equity or other beneficial
interests of such Person with the greatest aggregate voting power.
g. "Common Stock Equivalent" shall mean a share, or fraction of a
share, of any authorized class of preferred stock of the Company having
dividend, voting, liquidation and other rights which result, in the judgment of
the Board of Directors, in such share, or fraction of a share, being
approximately equivalent in value to one Common Share as of the Event Date (as
such term is hereinafter defined); provided, however, that, if no preferred
stock has been authorized or, if authorized, in the judgment of the Board of
Directors there are not sufficient authorized but unissued shares of preferred
stock available for the creation of Common Stock Equivalents, "Common Stock
Equivalent" shall mean such cash, reduction in Exercise Price (as such term is
hereinafter defined), other equity securities, debt securities, other assets or
any combination of the foregoing, that the Board of Directors shall determine to
be approximately equivalent in value to one Common Share as of the Event Date.
As used herein, "Event Date" shall mean (i) for purposes of any determination
made pursuant to Section 11(a)(iii) hereof, the date of occurrence of a Section
11(a)(ii) Event (as such term is hereinafter defined), and (ii) for purposes of
any determination made pursuant to Section 25(c) hereof, the Exchange Date.
h. "Distribution Date" shall have the meaning set forth in Section
3(b) hereof.
i. "Exchange" shall have the meaning set forth in Section 25 hereof.
j. "Exchange Date" shall have the meaning set forth in Section 7(a)
hereof.
k. "Exchange Ratio" shall have the meaning set forth in Section 25
hereof.
l. "Exercise Price" shall have the meaning set forth in Section 4
hereof.
m. "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
n. "Person" shall mean any individual, firm, corporation, partnership
or other entity and shall include any successor by merger or otherwise of such
Person.
o. "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
p. "Record Date" shall mean July 30, 2003.
q. "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
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r. "Redemption Price" shall have the meaning set forth in Section
24(a) hereof.
s. "Registered Common Shares" shall have the meaning set forth in
Section 13(b) hereof.
t. "Right Certificates" shall have the meaning set forth in Section
3(b) hereof.
u. "Rights" shall have the meaning set forth in the recital of this
Agreement.
v. "Section 11(a)(ii) Event" shall mean the event described in Section
11(a)(ii)hereof.
w. "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
x. "Securities Act" shall mean the Securities Act of 1933, as amended.
y. "Share Acquisition Date" shall mean the date of the first public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
z. "Subsidiary" shall mean, with reference to any Person, any
corporation or other Person of which a majority of the voting power of the
voting equity securities or equity or other beneficial interests is owned,
directly or indirectly, by such Person, or which is otherwise controlled by such
Person.
aa. "Summary of Rights" shall have the meaning set forth in Section
3(a) hereof.
bb. "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
cc. "Triggering Event" shall mean any Section 11(a) (ii) Event or
Section 13 Event.
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. In the event the Company appoints one or more Co-Rights
Agent, the respective duties of the Rights Agent and any Co-Rights Agent shall
be as the Company shall determine.
Section 3. Issuance of Rights Certificates.
a. No separate certificates representing the Rights will be issued to
shareholders until after a Distribution Date (as defined below). As promptly as
practicable after the Record Date, the Company will send a copy of a Summary of
Rights in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record
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holder of Common Shares as of the close of business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for Common
Shares and this Rights Agreement, and the registered holders of Common Shares
shall also be the registered holders of the associated Rights. Until the
Distribution Date (or the earliest of the Redemption Date, Exchange Date or
Final Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date shall also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate.
b. Until the earlier of (i) the close of business on the tenth day
after the Share Acquisition Date or (ii) the close of business on the tenth
business day (or such later day 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 that a tender or exchange offer by any Person is first published, sent
or given within the meaning of Rule 14d-2 of the General Rules and Regulations
under the Exchange Act (or any comparable or successor rule) if, upon
consummation thereof, such Person would be an Acquiring Person (the earlier of
such dates, including any such date which is after the date of this Agreement
and prior to the issuance of the Rights, being herein referred to as the
"Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
paragraph (a) of this Section 3) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the
transfer of the underlying Common Shares.
As soon as practicable after the Distribution Date, the Rights Agent will send,
by first-class, insured, postage prepaid mail, to each record holder of Common
Shares as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more Right certificates,
in substantially the form of Exhibit A hereto (the "Right Certificates"),
evidencing one Right for each Common Share so held, subject to adjustment as
provided herein and subject to the provisions of Section 7(e) below. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
c. Rights shall be issued in respect of all Common Shares which become
outstanding (including, without limitation, reacquired Common Shares referred to
in the penultimate sentence of this paragraph (c)) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date, the
Exchange Date or the Final Expiration Date. Certificates representing such
Common Shares shall also be deemed to be certificates for Rights, and shall bear
the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Tasty
Baking Company (the "Company") and American Stock Transfer & Trust
Company, dated as of July 30, 2003 (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, as in
effect on the date of mailing, without charge, promptly after receipt
of a written request therefor. As described in the Rights Agreement,
Rights beneficially owned by (i) an Acquiring Person or any Associate
or Affiliate thereof (as such terms are defined in the Rights
Agreement), (ii) a transferee of an Acquiring Person (or of any such
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Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) under certain circumstances, a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee before or concurrently with the
Acquiring Person becoming such, shall be null and void.
With respect to such certificates containing the foregoing legend, until the
earliest of the Distribution Date, the Redemption Date, the Exchange Date or the
Final Expiration Date, the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone (subject to
the provisions of paragraph a of this Section 3) and the registered holders of
Common Shares shall also be the holders of the associated Rights, and the
surrender for transfer of any such certificates shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares which are
no longer outstanding. Rights shall again become outstanding with respect to
such Common Shares at such time as they may be reissued by the Company.
Section 4. Form of Rights Certificates. The Rights Certificates (and the forms
of election to purchase shares, certification and assignment to be printed on
the reverse thereof) shall be substantially in the form set forth in Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or any securities
association on whose interdealer quotation system the Rights may from time to
time be authorized for quotation, or to conform to usage. Subject to the
provisions of Section 23 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of Common Shares as shall be set forth
therein at the price per Common Share set forth therein (the "Exercise Price"),
but the amount and type of securities purchasable upon the exercise of each
Right and the Exercise Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
a. The Rights Certificates shall be executed on behalf of the Company
by its Chief Executive Officer, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer 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 so 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. On the Distribution Date, if the Rights Agent is not the sole
transfer agent for the Common Shares, the Company will furnish the Rights Agent
with the name and address of, and the number of Rights held by, each holder of
Rights. Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at the office of the Rights Agent designated for such purpose, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names
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and addresses of the respective holders of the Right Certificates, the number of
Rights as evidenced on the face of each of the Right Certificates and the date
and certificate number of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.
a. Subject to the provisions of Section 7(e) and Section 15 hereof, at
any time after the close of business on the Distribution Date, and at or prior
to the close of business on the earliest of the Redemption Date, the Exchange
Date or the Final Expiration Date, any Right Certificate or Certificates (other
than Right Certificates representing Rights which have been exchanged pursuant
to Section 25 hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of Common Shares (or other securities or other assets,
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 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, with the form of assignment and certificate appropriately executed,
at the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate or
Certificates until the registered holder shall have completed and signed the
certificate contained in the form of assignment set forth on the reverse side of
each such Right Certificate and shall have provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Section 7(e) and Section 15 hereof, countersign
and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates.
b. Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will execute and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights.
a. The Rights shall not be exercisable prior to the Distribution Date.
Subject to Section 7(e) hereof, the registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii), Section 24(b) and Section 25(b)) in whole or
in part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Exercise Price for the Common
Shares (or other securities, cash or other assets, as the case may be) as to
which the Rights are exercised, at or prior to the earliest of (i) the close of
business on July 29, 2013 (the "Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 24 hereof (the "Redemption Date")
or (iii) the time at which the Rights are exchanged as provided in Section 25
hereof (the "Exchange Date"); provided, however, that if the number of Rights
exercised would entitle the holder thereof to receive any
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fraction of a Common Share greater than one-half of a share, the holder thereof
shall not be entitled to exercise such Rights unless such holder concurrently
purchases from the Company (and in such event the Company shall sell to such
holder) an additional fraction of a Common Share at a price equal to the same
fraction of the current Purchase Price which, when such fraction is added to the
number of Common Shares to be received upon such exercise, will equal a whole
number of Common Shares.
b. The Exercise Price for each Common Share pursuant to the exercise
of one Right shall initially be $45.00. The Exercise Price 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) below.
c. Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Exercise Price for the shares (or other securities, cash or other
assets, as the case may be) to be purchased as set forth below and an amount
equal to any applicable transfer tax or governmental charge required to be paid
by the holder of such Right Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall, subject to Section 21(j) hereof, thereupon promptly (i)
requisition from any transfer agent of the Common Shares (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
number of Common Shares to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be paid
in lieu of issuance of fractional shares in accordance with Section 15 hereof,
(iii) after receipt of such certificates, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate registered in
such name or names as may be designated by such holder, and (iv) when
appropriate, after receipt thereof, deliver such cash, if any, to or upon the
order of the registered holder of such Right Certificate. The payment of the
Exercise Price shall be made in cash or by certified or bank official check or
money order payable to the order of the Company. In the event that the Company
is obligated to issue other securities of the Company or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities or property are available
for distribution by the Rights Agent, if and when appropriate.
d. In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 15 hereof.
e. Notwithstanding anything in this Agreement to the contrary, from
and after the occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by
(i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes
such, or
(iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the
Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring
Person (or of any such Associate or Affiliate) to
holders of equity interests in such Acquiring
Person (or of any such Associate or Affiliate) or
to any Person with whom the Acquiring Person has
any agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer
which the Board of Directors in its discretion has
determined is part of a
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plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this
Section 7(e),
shall be null and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. No Right Certificate shall be issued
pursuant to Section 3 or Section 23 hereof that represents Rights beneficially
owned by an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof and no Right
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate. Any Right Certificate delivered to the Rights
Agent for transfer to any of the foregoing Persons, or which represents void
Rights, shall be canceled. The Company shall use reasonable efforts to effect
compliance with the provisions of this Section 7(e), but shall have no liability
to any holder of Right Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
f. Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported transfer as
set forth in Section 6 hereof or exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certificate
contained in the form of assignment or election to purchase set forth on the
reverse side of the Right Certificate surrendered for such assignment or
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in 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 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. Reservation and Availability of Common Shares.
a. Subject to the Company's rights under Section 11(a)(iii) hereto to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that it will cause to be reserved and kept available out of its authorized and
unissued Common Shares and/or any authorized and issued Common Shares held in
its treasury, the number of Common Shares that will be sufficient to permit the
exercise in full of all outstanding Rights; provided, however, that such action
need not be taken with respect to Common Shares (or other securities) issuable
upon exercise of the Rights until after such time as the Rights become
exercisable.
b. So long as the Common Shares issuable upon the exercise of Rights
may be listed on any national securities exchange or authorized for quotation on
any interdealer quotation system of any securities association, the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed on such
exchange or quoted on such system upon official notice of issuance upon such
exercise.
9
c. The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(ii)
or 11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be (provided the Company shall not have
elected to make the exchange permitted by Section 25 hereof for all outstanding
Rights (other than the Rights that shall have become null and void pursuant to
Section 7(e) hereof)), a registration statement under the Securities Act with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities and (B) the Final
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall give notice to the Rights Agent and issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a notice to the Rights Agent and a public announcement at
such time as the suspension is no longer in effect. In addition, if the Company
shall determine that a registration statement is required following the
Distribution Date but prior to the occurrence of a Section 11(a)(ii) Event
hereof, the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.
d. The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Common Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
e. The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and governmental
charges which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Common Shares (or other securities or property) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax or other governmental 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 for Common Shares (or other securities or
property) in a name other than that of, the registered holder of the Right
Certificates evidencing Rights surrendered for exercise or to issue or deliver
any certificates for Common Shares (or other securities or property) in a name
other than that of the registered holder upon the exercise of any Rights until
any such tax or charge shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax or charge is due.
Section 10. Common Shares Record Date. Each person in whose name any certificate
for Common Shares (or other securities) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Common Shares (or other securities) 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 Exercise Price (and all applicable
transfer taxes and governmental charges) was made; provided, however, that if
the date of such surrender and payment is a date upon
10
which the Common Shares (or other securities) transfer books of the Company are
closed or a date on which the exercisability of the Rights is suspended pursuant
to Section 9(c), such person shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Shares (or other securities) transfer books of
the Company are open or the next succeeding Business Day on which such
suspension is no longer in effect. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate, as such, shall not be entitled to
any rights of a shareholder of the Company with respect to Common Shares (or
other securities) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Exercise Price, Number and Kind of Shares or Number of
Rights
The Exercise Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
a. (i) In the event the Company shall, at any time after the
date of this Agreement, (A) declare a dividend on the Common Shares
payable in Common Shares, (B) subdivide or split the outstanding
Common Shares into a greater number of shares, (C) combine or
consolidate the outstanding Common Shares into a smaller number of
shares or effect a reverse stock split, or (D) issue any shares of its
capital stock in a reclassification of the Common Shares (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation) or
division, except as otherwise provided in this Section 11(a) and in
Section 7(e) hereof, the Exercise Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, split, consolidation, division, combination or
reclassification shall be proportionately adjusted so that the holder
of Rights exercised after such time shall be entitled to receive, upon
payment of the Exercise Price then in effect, the aggregate number and
kind of Common Shares or shares of capital stock, as the case may be,
which, if such Rights had been exercised immediately prior to such
record or effective date and at a time when the Common Shares (or
other capital stock, as the case may be) transfer books of the Company
were open, such holder would have acquired upon such exercise and, in
addition, would have been entitled to receive with respect to such
Common Shares or shares of capital stock, as the case may be, by
virtue of such dividend, subdivision, split, consolidation,
combination or reclassification, at an aggregate Exercise Price (i.e.,
the product of the number of Common Shares or shares of capital stock
purchased on exercise, as the case may be, multiplied by the Exercise
Price) equal to the aggregate Exercise Price prior to such dividend,
subdivision, split, consolidation, combination, division or
reclassification.
(ii) Subject to Sections 11(a)(iii) and 25 hereof, in the
event that any Person, alone or together with its Affiliates and
Associates, shall become an Acquiring Person, then proper provision
shall be made so that each holder of one Right, except as provided in
Section 7(e) hereof, shall thereafter have a right to receive, upon
exercise of each Right and upon payment of the then-current Exercise
Price for one Common Share, in accordance with the terms of this
Agreement, not one Common Share, but rather such number of Common
Shares as shall equal the result obtained by (x) multiplying the
then-current Exercise Price by the number of Common Shares for which
one Right is then exercisable and (y) dividing that product by 50% of
the current market price (determined pursuant to Section 11(d) hereof)
per Common Share on the date such Person, alone or together with its
Affiliates and Associates, became an Acquiring Person. For example,
11
assuming the current market price of the Common Shares is $20.00 per
share and assuming no other adjustments are required under the terms
of this Agreement, after any Person becomes an Acquiring Person, a
holder of one Right upon exercise thereof and payment of $45.00 to the
Company shall receive 4.5 Common Shares. $45.00x1
(---------)
.5x$20.00
(iii) Subject to Section 25 hereof, in the event that the
number of Common Shares which are authorized by the Company's articles
of incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Rights shall not be exercisable for
Common Shares, but proper provision shall be made so that each holder
of one Right, except as provided in section 7(e) hereof, shall
thereafter have a right to receive, upon exercise of each Right and
upon payment of the price for one Common Share determined pursuant to
subparagraph (ii), not one Common Share, but rather such number of
Common Stock Equivalents (or, in the judgment of the Board of
Directors, such combination of Common Stock Equivalents and Common
Shares) as shall equal the number of Common Shares determined pursuant
to subparagraph (ii).
b. In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling them to
subscribe for or purchase (for a limited period of time after such record date)
Common Shares or securities convertible into Common Shares at a price per Common
Share (or having a conversion price per share, if a security convertible into
Common Shares) less than the current market price (as determined pursuant to
Section 11(d) hereof) per Common Share on such record date, the Exercise Price
to be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Common Shares outstanding on such
record date, plus the number of Common Shares which the aggregate offering price
of the total number of Common Shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Common Shares outstanding on such record date, plus the number of
additional Common Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid in 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 and
shall be binding and conclusive for all purposes. Common Shares owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Exercise Price shall be adjusted to be the
Exercise Price which would then be in effect if such record date had not been
fixed.
c. In case the Company shall fix a record date for a distribution to
all holders of Common Shares (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend), assets, stock (other than a dividend payable in Common
Shares) or subscription rights, options or warrants (excluding those referred to
in or excluded pursuant to Section 11(b) hereof), the Exercise Price to be in
effect after such record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as determined pursuant to
Section 11(d) hereof) per one Common Share 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
12
Rights Agent and shall be binding and conclusive for all purposes) of the
portion of the cash, assets, stock or evidences of indebtedness so to be
distributed or of such subscription rights, options or warrants applicable to
one Common Share and the denominator of which shall be such current market price
(as determined pursuant to Section 11(d) hereof) per one Common Share. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Exercise Price shall
again be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
d. For the Purposes of any computation hereunder, the "current market
price" per Common Share on any date shall be deemed to be the average of the
daily closing prices per Common Share for the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current market price per Common Share is
determined during a period following the announcement by the issuer of such
Common Shares of (i) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares (other than
the Rights) or (ii) any subdivision, split, consolidation, combination or
reclassification of such Common Shares and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, split, consolidation, division, combination or
reclassification, then, and in each such case, the "current market price" shall
be appropriately adjusted at the discretion of the Board of Directors of the
Company to take into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Common Shares are listed or admitted to trading or, if the
Common Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the Common
Shares are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Common Shares selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used and shall be binding and conclusive for
all purposes. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Shares are not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding and conclusive for all purposes.
e. Anything herein to the contrary notwithstanding, no adjustment in
the Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a Common Share or other share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the Final Expiration Date.
f. If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right to be thereafter exercised shall
become entitled to receive any shares
13
of capital stock of the Company other than Common Shares, thereafter the number
of such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares contained in
this Section 11 and the provisions of Sections 6, 7, 9, 10, 13 and 15 with
respect to the Common Shares shall apply on like terms to any such other shares.
g. All Rights issued by the Company subsequent to any adjustment made
to the Exercise Price hereunder shall evidence the right to purchase, at the
adjusted Exercise Price, the number of Common Shares purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
h. Unless the Company shall have exercised its election as provided in Section
11(i), upon each adjustment of the Exercise Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of Common Shares
(calculated to the nearest ten-thousandth) obtained by (i) multiplying (x) the
number of Common Shares covered by each Right immediately prior to this
adjustment, by (y) the Exercise Price in effect immediately prior to such
adjustment of the Exercise Price, and (ii) dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment of the Exercise
Price.
i. The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment in the number of
Rights shall be exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Exercise Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 15 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 holder 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 may bear, at
the option of the Company, the adjusted Exercise Price) 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 Exercise Price or
the number of Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Exercise Price and the number of Common Shares which were expressed in the
initial Right Certificates issued hereunder.
k. Before taking any action that would cause an adjustment reducing
the Exercise Price below the then par value, if any, of the Common Shares
issuable upon exercise of
14
the Rights, the Company shall take any corporate action which may, upon the
advice of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Common Shares at such adjusted
Exercise Price.
l. In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Common Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Common Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
m. Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Shares, (ii) issuance wholly for cash of any of the
Common Shares at less than the current market price, (iii) issuance wholly for
cash of Common Shares or securities which by their terms are convertible into or
exchangeable for Common Shares, (iv) stock dividends, or (v) issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Common Shares shall not be taxable to such
stockholders.
n. In the event that the Rights become exercisable following a Section
11(a)(ii) Event, the Company, by action of the Board of Directors, may permit
the Rights, subject to Section 7(e), to be exercised for 50% of the Common
Shares (or cash, other securities or property) that would otherwise be
purchasable under Section 11(a), in consideration of the surrender to the
Company of the Rights so exercised and without other payment of the Exercise
Price. Rights exercised under this Section 11(n) shall be deemed to have been
exercised in full and shall be canceled.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares. Whenever
an adjustment is made as provided in Sections 11 and 13 hereof, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Common Shares a copy
of such certificate and (c) mail a brief summary thereof to each holder of a
Right Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing Common Shares) in accordance with Section 27 hereof.
The Rights Agent shall be fully authorized to rely and be protected in relying
on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power
a. In the event that, following the earlier of the Distribution Date
or the Share Acquisition Date, (x) the Company, directly or indirectly, shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 14(b)
hereof) and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 14(b) hereof), directly or
indirectly, shall consolidate with, or merge with and into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding Common Shares shall be changed into or exchanged for stock or
other securities of any other Person (or of the
15
Company) or cash or any other property, or (z) the Company, directly or
indirectly, shall sell or otherwise transfer (or one or more of its
Subsidiaries, directly or indirectly, shall sell or otherwise transfer), in one
or more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any Person or Persons (other than the Company or any Subsidiary of the
Company in one or more transactions each of which complies with Section 14(b)),
then, and in each such case, proper provision shall be made so that
(i) each holder of one Right (except as provided in Section 7(e)
hereof) shall thereafter have the right to receive, upon the exercise of each
Right and upon payment of the then-current Exercise Price for one Common Share
in accordance with the terms of this Agreement, not one Common Share, but rather
such number of validly authorized and issued, fully paid, nonassessable and
freely tradable Common Shares of the Principal Party (as hereinafter defined),
free and clear of any liens, encumbrances and other adverse claims and not
subject to any rights of call or first refusal, as shall be equal to the result
obtained by (1) multiplying the then-current Exercise Price by the number of
Common Shares for which one Right is then exercisable (without taking into
account any adjustment previously made pursuant to Section 11(a)(ii) or
11(a)(iii) hereof) and (2) dividing that product by 50% of the current market
price (determined pursuant to Section 11(d) hereof) per Common Share of the
Principal Party on the date of consummation of such consolidation, merger, sale
or transfer;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, pay and perform in all respects, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement, regardless of any provision to the contrary in any agreement
between the Company and such Principal Party;
(iii) except for purposes of Section 1(g) hereof, the term "Company"
shall thereafter be deemed to refer to such Principal Party;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares) in
connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights; provided, however, that, upon the subsequent
occurrence of any merger, consolidation, sale of all or substantially all of the
assets, recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of one
Right (except as otherwise provided herein) shall thereupon be entitled to
receive, upon exercise of such Right and payment of the Exercise Price, such
cash, shares, rights, warrants and other property which such holder would have
been entitled to receive had he, at the time of such transaction, owned the
Common Shares of the Principal Party purchasable upon the exercise of such
Rights (after giving effect to the foregoing provisions of 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; and
(v) the provisions of Sections 11(a)(ii) and 11(a)(iii) hereof shall
be of no effect following the occurrence of any Section 13 Event.
b. "Principal Party" shall mean
(i) in the case of any merger described in clause (x) or (y) of
Section 13(a), any Person that is the issuer of any securities into which Common
Shares
16
of the Company are converted in such merger, and if no securities are so issued,
any Person that is a party to such merger that survives the merger;
(ii) in the case of any consolidation described in clause (x) or (y)
of Section 13(a), any Person that directly controls, alone or with other
Persons, a corporation that is consolidating with the Company; and
(iii) in the case of any transaction or transactions described in
clause (z) of Section 13(a), any Person that receives any assets or earning
power transferred pursuant to such transaction or transactions;
provided, however, that with respect to such Person (or, if there is more than
one such Person, with respect to each such Person), (1) if the Common Shares of
such Person are not at such time and have not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange
Act ("Registered Common Shares"), or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person which has Registered
Common Shares outstanding, "Principal Party" shall refer to such other Person;
(2) if the Common Shares of such Person are not Registered Common Shares or such
Person is not a corporation, and such Person is a direct or indirect Subsidiary
of another Person but is not a direct or indirect Subsidiary of another Person
which has Registered Common Shares outstanding, "Principal Party" shall refer to
the ultimate parent entity of such first mentioned Person; (3) if the Common
Shares of such Person are not Registered Common Shares or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and one or more of such latter Persons have Registered Common Shares
outstanding, "Principal Party" shall refer to whichever of such latter Persons
is the issuer of outstanding Registered Common shares having the greatest
aggregate current market value (determined pursuant to Section 11(d)(i) hereof);
or (4) if the Common Shares of such Person are not Registered Common Shares or
such Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such latter Persons have
Registered Common Shares outstanding, "Principal Party" shall refer to whichever
ultimate parent entity is the entity having the greatest net assets; provided,
further, however, that if under the foregoing provisions of this Section 13(b)
there shall for any reason be more than one Principal Party, "Principal Party"
shall refer to whichever of such Persons is the issuer of outstanding Registered
Common Shares having the greatest aggregate current market value (determined
pursuant to Section 11(d) hereof) or, if none of such Persons has Registered
Common Shares outstanding, whichever of such Persons is the entity having the
greatest net assets.
c. Notwithstanding anything herein to the contrary, if the Principal
Party as determined pursuant to paragraph (b) above is not a corporation, proper
provision shall be made so that such Principal Party shall create or otherwise
make available for purposes of the exercise of the Rights in accordance with the
terms of this Agreement, a type or types of securities having a fair market
value (as determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company) equal to at least the value of the
Common Shares which each holder of a Right would have been entitled to receive
if such Principal Party had been a corporation.
d. The Company shall not consummate any Section 13 Event, unless (1)
at the time of and after such consummation the Principal Party shall have a
sufficient number of authorized Common Shares which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and (2) prior to such consummation the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in this Section 13 and
further providing that, as soon as practicable after the date of any such
Section 13 Event, the Principal Party will
17
(i) prepare and file a registration statement under the Securities Act
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Final Expiration Date, and
similarly comply with applicable state securities or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all respects
with the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive share
exchanges, mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the first occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
e. Notwithstanding anything herein to the contrary, Section 13 shall
not be applicable to a transaction described in Section 13(a)(x), (y) or (z) if
such transaction has received the prior approval of the Board of Directors of
the Company.
Section 14. Additional Covenants.
a. Except as expressly provided herein, no adjustment to the Exercise
Price, the number of Common Shares or other securities for which a Right is
exercisable or the number of Rights outstanding (except as permitted by Section
24 or Section 25 hereof) or any similar adjustment shall be made or be effective
if such adjustment would have the effect of substantially reducing or limiting
the benefits the holders of the Rights would have had absent such adjustment,
including, without limitation, the benefits under Section 11(a)(ii) and Section
13 hereof, unless the terms of this Agreement are amended so as to preserve such
benefits.
b. The Company covenants and agrees that, following the earlier of the
Share Acquisition Date and the Distribution Date, except as permitted by
Sections 24, 25 and 28 hereof, it shall not, directly or indirectly, take any
action the purpose or effect of which is to eliminate or otherwise diminish in
any material respect the benefits intended to be afforded by the Rights.
c. The Company covenants and agrees that it shall not consummate any
of the transactions described in clauses (x), (y) and (z) of Section 13(a)
hereof if (i) at the time of or after such consummation there are or would be
any charter or by-law provisions or any rights, warrants or other instruments or
securities outstanding or agreements in effect (whether of the Company or any
other Person) or any other action taken (whether by the Company or any other
Person) the purpose or effect of which is to eliminate or otherwise diminish in
any material respect the benefits intended to be afforded by the Rights or (ii)
the stockholders of the Principal Party shall have received, either prior to,
simultaneously with, or after the consummation of such transaction, a
distribution of Rights previously owned by the Principal Party or any of its
Affiliates and Associates.
d. The Company further covenants and agrees that it shall not
consummate any of the transactions described in clauses (x), (y) and (z) of
Section 13(a) hereof unless prior thereto the Company and the Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with paragraph (c) above and further providing that the
Principal Party covenants and agrees that it shall not, directly or indirectly,
take any action the purpose or effect of which is to eliminate or otherwise
diminish in any material respect the benefits intended to be afforded by the
18
Rights. The provisions of this paragraph (d) and paragraph (c) above shall
similarly apply to successive mergers, consolidations, sales or other transfers.
Section 15. Fractional Rights and Fractional Shares.
a. The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 15(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 of the Rights 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 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 and shall be
conclusive for all purposes.
b. The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares equal to one-half
of a share or less, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Common
Share. Any exercise of Rights that would entitle the holder thereof to receive
any fraction of a Common Share greater than one-half of a share shall be
governed by Section 7(a) hereof. In the event that an additional fraction of a
Common Share is not purchased by such holder (or sold by the Company) pursuant
to such Section 7(a), the Company shall pay such holder an amount in cash equal
to the same fraction of the current market value of one Common Share. For
purposes of this Section 15(b), the current market value of one Common Share
shall be the closing price of a Common Share (as determined pursuant to Section
11(d) hereof) for the Trading Day immediately prior to the date of such
exercise.
Section 16. Rights of Action. All rights of action in respect of 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 Shares);
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
19
Section 17. Agreement of Rights Holders. Every holder of a Right, by accepting
the same, consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
a. prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
b. after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
c. subject to Sections 6(a) and 7(f) hereof, the Company and the
Rights Agent may deem and treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate
or the associated Common Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be affected by any notice to the contrary; and
d. notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 18. 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 Common Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 26 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 19. 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 and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability. Anything in this Agreement to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits),
20
even if the Rights Agent has been advised of the likelihood of such loss or
damage and regardless of the form of the action.
b. The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Right Certificate
or certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, instruction, 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 21.
Section 20. Merger or Consolidation or Change of Name of Rights Agent.
a. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged with or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 22 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 such 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 such 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 21. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
a. The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
b. Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chief Executive Officer,
the President, a Vice President, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such
21
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
c. The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
d. The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates or be required to verify the same (except as to its
countersignature thereof), but all such statements and recitals are and shall be
deemed to have been made by the Company only.
e. The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any 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 adjustment required under the provisions of Sections 11
or 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Common Shares will, when
so issued, be validly authorized and issued, fully paid and nonassessable.
f. The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights 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
one of the Chief Executive Officer, the President, a Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
h. The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
i. The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents for any loss to the Company resulting from any such act, default, neglect
or misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
j. If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to any item therein, the
22
Rights Agent shall not take any further action with respect to such requested
exercise or transfer until it has received instructions with respect thereto
from the Company.
Section 22. 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, if instructed by the Company,
to each transfer agent of the Common Shares by registered or certified mail,
and, at the expense of the Company, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days, notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction 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 which is authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus adequate in the judgment of at least a majority of the Board of
Directors to assure the performance of its duties hereunder and the protection
of the interests of the Company and the holders of the Rights. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares, and mail
a notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 22, 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 23. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Exercise 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 Shares following the Distribution Date and prior to the earliest
of the Redemption Date, the Exchange Date and the Final Expiration Date, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant to
the exercise of employee or director stock options or under any employee or
director plan or arrangement outstanding, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of securities
issued by the Company prior to such date, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificates
would be issued and (ii) no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
23
Section 24. Redemption.
a. The Board of Directors of the Company may, at its option, at any
time prior to such time as any Person becomes an Acquiring Person and for a
period of 10 Business Days thereafter, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend, reclassification or similar
transaction occurring after the date hereof (such 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. Without limiting
the generality of the foregoing, the Company may, at its option, pay the
Redemption Price in cash, Common Shares (based on the "current market price" as
defined in Section 11(d) hereof, of the Common Shares at the time of redemption)
or any other form of consideration deemed appropriate by the Board of Directors.
b. Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (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 such notice shall not affect the validity of such redemption.
Within 10 days after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the Rights Agent and the holders of the then outstanding Rights by mailing such
notice to the Rights Agent and to all such holders at their last address as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
c. Neither the Company nor any of its Subsidiaries may redeem,
acquire, or purchase for value any Rights at any time in any manner except (i)
pursuant to a redemption in accordance with this Section 24 or an exchange
pursuant to Section 25 hereof or (ii) in connection with the purchase or other
acquisition of Common Shares prior to the Distribution Date.
Section 25. Exchange.
a. Subject to paragraph (c) of this Section 25, the Board of Directors
of the Company may, at its option, at any time after the occurrence of a Section
11(a)(ii) Event, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio of one
Common Share for every one Right, appropriately adjusted to reflect any stock
split, stock dividend, reclassification or similar transaction occurring after
the date hereof (such exchange being hereinafter referred to as the "Exchange"
and such exchange ratio being hereinafter referred to as the "Exchange Ratio").
b. Immediately upon the action of the Board of Directors of the
Company authorizing the Exchange and without any further action and without any
notice, the right to exercise the Rights shall terminate and the only right
thereafter of a holder of Rights included in the Exchange shall be to receive
that number of Common Shares equal to the number of Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of the Exchange; provided, however, that the failure to give or any defect in
such notice shall not affect the validity of the Exchange. Within 10 days after
such action of the Board of Directors ordering the Exchange, the Company shall
24
mail a notice of Exchange to the Rights Agent and the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given
whether or not the holder receives the notice. Each such notice of Exchange will
state the method by which the Exchange will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
c. In the event that the number of Common Shares which are authorized
by the Company's articles of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the Exchange in full, the Exchange Ratio shall equal one Common Stock
Equivalent (in lieu of one Common Share) for every one Right. Alternatively, the
Board of Directors of the Company may, at its option, determine that the Company
shall (i) issue Common Shares in the Exchange to the extent Common Shares are
available and (ii) utilize Common Stock Equivalents in the Exchange as provided
above to the extent Common Shares are not available, in which case such Common
Shares shall be allocated on such basis as the Board of Directors determines
pursuant to Section 30 hereof.
d. After aggregating all the Common Shares to which a holder of Rights
is entitled upon the Exchange, the Company shall not be required to issue a
fraction of a Common Share to such holder. In lieu of issuing fractional shares,
there shall be paid to the registered holders of the Right Certificates with
regard to which such fractional shares would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value of one Common Share.
For the purposes of this paragraph (d), the current market value of one Common
Share shall be the closing price of a Common Share (as determined pursuant to
Section 11(d) hereof) for the Trading Day immediately prior to the Exchange
Date.
Section 26. Notice of Certain Events.
a. In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Common Shares or to make any other distribution to the holders of
Common Shares (other than a regular quarterly cash dividend), (ii) to offer to
all of the holders of Common Shares rights, options or warrants to subscribe for
or to purchase any additional Common Shares at less than the current market
price of the Common Shares, or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Common Shares (other than a reclassification involving only the subdivision of
outstanding Common Shares), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer, (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 27 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or distribution
of rights, options or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares, 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
Business Days prior to the record date for determining holders of the Common
Shares for purposes of such action, and in the case of any such other action, at
least 10 Business Days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common Shares,
whichever shall be the earlier.
25
b. In case a Section 11(a)(ii) Event shall occur, then (i) the Company
shall as soon as practicable thereafter give to the Rights Agent and to each
holder of a Right Certificate, in accordance with Section 27 hereof, a notice of
the occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii) hereof and (ii) all
references in the preceding paragraph to Common Shares shall thereafter be
deemed to refer to, if appropriate, Common Share Equivalents.
c. The failure to give notice required by this Section 26 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote on any such action.
Section 27. 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:
Chief Financial Officer
Tasty Baking Company
0000 Xxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
With a copy to:
General Counsel
Tasty Baking Company
0000 Xxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Subject to the provisions of Section 22 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:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
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 28. Supplements and Amendments. Prior to the Distribution Date the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement, whether or not adverse to the holders of
Rights, without any approval of the holders of Rights. From and after the
Distribution Date the Company and the Rights Agent may from time to time
supplement or amend this Agreement without any approval of the holders of Rights
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to extend the period during which the Rights may be
redeemed; provided
26
however, that such period may not be extended if at the time of such supplement
or amendment the Rights are not then redeemable, or (iv) to change or supplement
the provisions herein to effectuate the purposes of this Agreement, including
but not limited to changes in the Exercise Price or Redemption Price, or to make
any other provisions with respect to the Rights, which, in either such case,
shall not materially adversely affect the interests of the holders of Rights
(other than Acquiring Persons and Affiliates or Associates thereof). 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 28, the Rights Agent shall execute such supplement or amendment;
provided, however, that the Rights Agent may, but shall not be obligated to,
enter into any such supplement or amendment which affects the Rights Agent's own
rights, duties or immunities under this Agreement.
Section 29. 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 30. Determinations and Actions by the Board of Directors.
a. Notwithstanding any provision to the contrary in any amendment to
the Company's Articles of Incorporation or By-Laws which may hereafter be
adopted, the Board of Directors of the Company shall have the exclusive power
and authority to administer and interpret this Agreement and to exercise all
rights and powers specifically granted to the Board of Directors 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 calculations and
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not to redeem the Rights
pursuant to Section 24 hereof, to exchange or not to exchange the Rights
pursuant to Section 25 hereof or to supplement or amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) shall
be presumed to have been done or made by the Board of Directors of the Company
in good faith and shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors to any liability to the holders of the Rights.
b. Notwithstanding any provision to the contrary in any amendment to
the Company's Articles of Incorporation or By-Laws which may hereafter be
adopted, no action by the Board of Directors of the Company with respect to the
administration or interpretation of this Agreement, the exercise of any powers
hereunder, or the amendment, modification, supplementation or termination
hereof, shall be valid or effective unless approved by both a majority of the
Continuing Directors and a majority of all directors then in office, at a duly
constituted meeting of the Board of Directors. "Continuing Directors" shall mean
(i) any member of the Board, while such Person is a member of the Board, who is
not an Acquiring Person, or an Affiliate or Associate of such Person, or a
representative or designee of an Acquiring Person or of any such Affiliate or
Associate, and was a member of the Board prior to the date of this Agreement, or
(ii) any Person who subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person or an Affiliate
or Associate of such Person, or a representative or designee of an Acquiring
Person or of any such Affiliate or Associate, if such Person's nomination for
election or election to the Board is recommended or approved by a majority of
the Continuing Directors then in office.
Section 31. 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 Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the
27
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares).
Section 32. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 24 hereof shall be reinstated and
shall not expire until the close of business on the tenth day following the date
of such determination by the Board of Directors.
Section 33. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Pennsylvania and for all purposes shall be governed by and
construed in accordance with the laws of such Commonwealth applicable to
contracts to be made and performed entirely within such Commonwealth.
Section 34. 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 35. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the date and year first above written.
Attest: TASTY BAKING COMPANY
/s/ Xxxxxx X. Xxxxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxx
------------------------------ -------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx. Name: Xxxxxxx X. Xxxxx
Title: Secretary Title: President & Chief Executive
Officer
Attest: AMERICAN STOCK TRANSFER & TRUST COMPANY
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------ -------------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
28
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER JULY , 2013 OR EARLIER IF REDEMPTION OR EXCHANGE OCCURS.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY AT $.001 PER
RIGHT, AND TO EXCHANGE AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. AS DESCRIBED IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY
OWNED BY (1) AN ACQUIRING PERSON OR ANY ASSOCIATE OR AFFILIATE THEREOF (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), (2) A TRANSFEREE OF AN ACQUIRING
PERSON (OR OF ANY SUCH ASSOCIATE OR AFFILIATE) WHO BECOMES A TRANSFEREE AFTER
THE ACQUIRING PERSON BECOMES SUCH OR (3) UNDER CERTAIN CIRCUMSTANCES, A
TRANSFEREE OF AN ACQUIRING PERSON (OR OF ANY SUCH ASSOCIATE OR AFFILIATE) WHO
BECOMES A TRANSFEREE, BEFORE OR CONCURRENTLY WITH THE ACQUIRING PERSON BECOMING
SUCH, SHALL BE NULL AND VOID.
RIGHT CERTIFICATE
TASTY BAKING COMPANY
This certifies that , or registered assigns, is the registered owner
of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of July 30, 2003 (the "Rights Agreement"), between Tasty
Baking Company, a Pennsylvania corporation (the "Company"), and American Stock
Transfer & Trust Company (the "Rights Agent"). Each Right entitles the
registered holder 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, New York time) on July 29, 2013 at the office of the Rights
Agent designated for such purpose, or its successors as Rights Agent, one fully
paid, non-assessable share of Common Stock (the "Common Shares") of the Company.
No less than one Right, and only whole multiples of one Right, may be exercised
at any time at a Exercise Price of $45.00 per Common Share (the "Exercise
Price"), subject to adjustment, upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of shares which may
be purchased upon exercise thereof) set forth above, and the Exercise Price per
share set forth above, are the number and Exercise Price as of July 30, 2003,
based on the Common Shares as constituted at such date.
From and after the occurrence of the event described in section
11(a)(ii) of the Rights Agreement, if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or any Associate
or Affiliate thereof (as such terms are defined in the Rights Agreement), (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such or (iii) under
certain circumstances, a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee before or concurrently with the
Acquiring Person becoming such, such Rights shall be null and void and no holder
hereof shall have any rights with respect to such Rights.
29
As provided in the Rights Agreement, the Exercise Price and the number
and kind of Common Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive office of the
Company and are also available upon written request to the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $.001 per Right or (ii) may be exchanged by the Company
at its option for shares of the Company's Common Stock, $0.50 par value per
share (or, in certain circumstances, Common Stock Equivalents, as such term is
defined in the Rights Agreement).
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby. In lieu of fractions of a share equal to
one-half of a share or less, a cash payment will be made, as provided in the
Rights Agreement. No Rights may be exercised that would entitle the holder to
any fraction of a Common Share greater than one-half of a share unless
concurrently therewith such holder purchases an additional fraction of a Common
Share which, when added to the number of Common Shares to be received upon such
exercise, equals a whole number of Common Shares, as provided in the Rights
Agreement. If such holder does not purchase such additional fraction of a Common
Share, a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
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 Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
30
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _____________, 200__
ATTEST: TASTY BAKING COMPANY
_______________________________ By:________________________________
Secretary President and Chief Executive Officer
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:____________________________________
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Right Certificate.)
FOR VALUE RECEIVED___________________________________hereby sells, assigns and
transfers unto
(Please print name and address of transferee) this Right Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint _________________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power
ofsubstitution.
Dated: _________________, 200__
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible financial institution or
broker who is a member participant in a Medallion Program approved by the
Securities Transfer Association, Inc.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(i) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement);
(ii) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _________________, 200__
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible financial institution or
broker who is a member participant in a Medallion Program approved by the
Securities Transfer Association, Inc.
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Right Certificate.)
To: TASTY BAKING COMPANY
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Common Shares issuable
upon the exercise of the Rights (or such other securities of the Company or of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of:
Please insert social security or other identifying
number ___________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance of such Rights shall
be registered in the name of and delivered to:
Please insert social security or other identifying number___________________
(Please print name and address)
Dated: _________________, 200__
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible financial institution or
broker who is a member participant in a Medallion Program approved by the
Securities Transfer Association, Inc.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _________________, 200__
___________________________
Signature
NOTICE
The signatures to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
Common Stock Purchase Right Dividend
------------------------------------
On July 30, 2003, the Board of Directors of Tasty Baking Company (the
"Company"), declared a dividend distribution of one common stock purchase right
(a "Right") for each outstanding share of the Company's common stock (the
"Common Shares") to shareholders of record at the close of business on July 30,
2003. Each Right entitles the registered holder, upon the occurrence of certain
events, to purchase from the Company that number of Common Shares having a then
market value equal to two times the exercise price of the Rights ($45.00 per
Right, subject to adjustment (the "Exercise Price")), upon payment of the
Exercise Price. The description and terms of the Rights are set forth in a
Rights Agreement dated as of July 30, 2003 (the "Rights Agreement") between the
Company and American Stock Transfer & Trust Company, as Rights Agent.
This Summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement. A copy of
the Rights Agreement may be obtained from the Company without charge.
Certificates; Separation of Rights from Common Stock
Initially, the Rights will be attached to all Common Shares then
outstanding, and no separate Right certificates will be distributed. The Rights
will separate from the Common Shares and trade separately after the Distribution
Date. The "Distribution Date" is the earlier of (i) 10 days following the date
of the first public announcement that a person or group of affiliated or
associated persons, has acquired or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Shares (an "Acquiring
Person") or (ii) 10 business days (or such later day as may be determined by
action of the Board of Directors before the time any person or group becomes an
Acquiring Person) following the commencement of a tender offer or exchange offer
if, upon consummation thereof, any person or group would be an Acquiring Person.
The date of announcement of the existence of an Acquiring Person referred to in
clause (i) above is referred to as the "Share Acquisition Date."
Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), (i) the Rights will be evidenced only by the Rights
Agreement and the Common Share certificates, and will be automatically
transferred with, and only with, the Common Shares, (ii) new Common Share
certificates issued after July 30, 2003, upon transfer or new issuance of Common
Shares, will contain a notation incorporating the Rights Agreement by reference,
and (iii) the surrender for transfer of any Common Share certificate, even
without such notation or a copy of this Summary of Rights attached thereto, will
also constitute the transfer of the Rights associated with the Common Shares
represented by such stock certificate.
As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and thereafter, such separate Right Certificates alone will
evidence the Rights. The Rights are not exercisable until the Distribution Date
and will expire at the close of business on July 29, 2013, unless earlier
redeemed or exchanged by the Company as described below.
Flip In Trigger
In the event that any person or group of associated or affiliated
persons becomes an Acquiring Person, then after the Distribution Date, except as
provided in the next paragraph, each Right shall entitle the holder thereof to
receive, upon exercise and payment, Common Shares (or Common Stock Equivalents
(as such term is defined in the Rights Agreement)) having a then market value
equal to two (2) times the Exercise Price of the Rights.
Certain Rights to Become Void
Upon the occurrence of the event described in the preceding paragraph,
any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate (as such terms are defined in the Rights Agreement) of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
from the Acquiring Person (or any such Associate or Affiliate) to holders of
equity interests in such Acquiring Person or to any person with whom the
Acquiring Person (or any such Associate or Affiliate) has any agreement or other
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company in its discretion has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of the Rights Agreement, shall become null and void without any
further action, and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of the Rights Agreement
or otherwise.
Flip Over Trigger
In the event that, following the earlier of the Distribution Date or
Share Acquisition Date, (i) the Company engages in a merger or other business
combination transaction in which the Company is not the surviving corporation,
(ii) the Company engages in a merger or other business combination transaction
with another person in which the Company is the surviving corporation, but in
which its Common Shares are changed or exchanged, or (iii) more than 50% of the
Company's assets or earning power is sold or transferred, the Rights Agreement
provides that proper provision shall be made so that each Right (except Rights
which previously have been voided as described above in the preceding paragraph)
shall entitle the holder thereof to receive, upon exercise and payment, common
stock of the acquiring company having a then market value equal to two (2) times
the Exercise Price of the Rights.
Optional Exchange of Rights for Common Stock
At any time after any person or group becomes an Acquiring Person, the
Board of Directors of the Company may exchange the Rights (except Rights which
previously have been voided as described above), in whole or in part, at an
exchange ratio of one Common Share (or, in certain circumstances, one Common
Stock Equivalent) for each Right.
Adjustments to Exercise Price and Number of Rights/Common Shares
The Exercise Price payable, the number of Common Shares or other
securities issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Shares, (ii) upon
the grant to all holders of the Common Shares of certain rights, options or
warrants to subscribe for Common Shares or convertible securities at less than
the current market price of the Common Shares, or (iii) upon
the distribution to all holders of the Common Shares of evidences of
indebtedness, stock (other than a dividend payable in Common Shares), assets or
cash (excluding regular quarterly cash dividends) or of subscription rights,
options or warrants (other than those referred to above).
The number of outstanding Rights and the number of Common Shares
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or in the event of subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case, prior to the
Distribution Date.
With certain exceptions, no adjustment in the Exercise Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Exercise Price. No fractional Common Shares will be issued upon the
exercise of any Right or Rights. In lieu of fractions of a share equal to
one-half of a share or less, a cash payment will be made, as provided in the
Rights Agreement. No Rights may be exercised that would entitle the holders to
any fraction of a Common Share greater than one-half of a share unless
concurrently therewith the holder purchases an additional fraction of a Common
Share which, when added to the number of Common Shares to be received upon such
exercise, equal a whole number of Common Shares, as provided in the Rights
Agreement. If the holder does not purchase an additional fraction of a Common
Share, a cash payment will be made, as provided in the Rights Agreement.
Redemption of Rights
At any time prior to such time as any Person becomes an Acquiring
Person and for a period of 10 Business Days thereafter, the Board of Directors
of the Company may redeem the Rights in whole, but not in part, at a price of
$.001 per Right, subject to adjustment (the "Redemption Price"). Immediately
upon the action of the Board of Directors of the Company ordering the redemption
of the Rights (or at such later time as the Board of Directors may establish for
the effectiveness of such redemption), the Rights will terminate and the only
right of the holders of the Rights will be to receive the Redemption Price.
Shareholder Rights
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends by reason of ownership of the Rights.
Tax Implications
While the distribution of the Rights will not be taxable to a
shareholder or to the Company, shareholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable or exchangeable for shares of Common Stock.
Amendment
The terms of the Rights may be amended by the Company and the Rights
Agent at any time for any purpose, provided that following the Distribution Date
the amendment may not materially adversely affect the interests of holders of
Rights (other than the interests of an Acquiring Person).
Continuing Directors
The Board of Directors of the Company has the exclusive power and
authority to administer the Rights Agreement and to exercise all decisions on
behalf of the Company provided in the Agreement. Actions by the Board of
Directors shall require the affirmative vote of a majority of the Continuing
Directors. "Continuing Directors" means (i) any member of the Board who is not
an Acquiring Person or an associate or affiliate of such person, or a
representative or designee of an Acquiring Person or any such associate or
affiliate, and was a member of the Board prior to July 30, 2003, or (ii) any
person who subsequently becomes a member of the Board, who is not an Acquiring
Person or an associate or affiliate of such person, or a representative or
designee of any such person, if such person's nomination for election or
election to the Board is recommended or approved by a majority of the Continuing
Directors then in office.
Anti-takeover Effects
The Rights may have certain anti-takeover effects. The Rights will
cause a dilution to a person or group that attempts to acquire the Company on
terms not approved by the Board of Directors. The Rights will not interfere with
any merger or other business combination approved by the Board of Directors
prior to the time the other party to the transaction becomes an Acquiring
Person.
