EXHIBIT 1
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________________________________________________________________________________
XX-XXX STORES, INC.
and
NATIONAL CITY BANK, NATIONAL ASSOCIATION, as Rights Agent
AMENDED AND RESTATED
RIGHTS AGREEMENT
Dated as of
October 31, 2000
________________________________________________________________________________
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions.......................................................................... 1
Section 2. Appointment of Rights Agent.................................................................. 4
Section 3. Issue of Right Certificates.................................................................. 4
Section 4. Form of Right Certificates................................................................... 5
Section 5. Countersignature and Registration............................................................ 6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates............................................................ 6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights; Null and Void Rights.......... 7
Section 8. Cancellation and Destruction of Right Certificates........................................... 9
Section 9. Reservation and Availability of Class A Common Shares........................................ 9
Section 10. Class A Common Share Certificate Date........................................................ 10
Section 11. Adjustment of Purchase Price, Exercise Price, Number and Type of Shares or Number of Rights.. 10
Section 12. Certificates of Adjusted Purchase Price, Exercise Price or Number of Shares.................. 15
Section 13. Fractional Rights and Fractional Shares...................................................... 15
Section 14. Rights of Action............................................................................. 17
Section 15. Agreement of Right Holders................................................................... 17
Section 16. Right Certificate Holder Not Deemed a Shareholder............................................ 18
Section 17. Concerning the Rights Agent.................................................................. 18
Section 18. Merger or Consolidation or Change of Name of Rights Agent.................................... 18
Section 19. Duties of Rights Agent....................................................................... 19
Section 20. Change of Rights Agent....................................................................... 21
Section 21. Issuance of New Right Certificates........................................................... 21
Section 22. Redemption................................................................................... 22
Section 23. Notice of Certain Events..................................................................... 22
Section 24. Notices...................................................................................... 23
Section 25. Supplements and Amendments................................................................... 23
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Section 26. Successors................................................................................ 24
Section 27. Determination and Actions by the Board of Directors, etc.................................. 24
Section 28. Benefits of this Agreement................................................................ 24
Section 29. Severability.............................................................................. 24
Section 30. Governing Law............................................................................. 24
Section 31. Counterparts.............................................................................. 25
Section 32. Descriptive Headings...................................................................... 25
Index of Defined Terms.................................................................................. 27
Exhibit A - Form of Right Certificate................................................................. A-1
Exhibit B - Summary of Rights to Purchase Class A Common Shares....................................... B-1
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AMENDED AND RESTATED
RIGHTS AGREEMENT
This AMENDED AND RESTATED RIGHTS AGREEMENT (this "Agreement"), dated
as of October 31, 2000, is made and entered into by and between Xx-Xxx Stores,
Inc., an Ohio corporation (the "Company"), and National City Bank, National
Association, as Rights Agent (the "Rights Agent").
One right (a "Right") has been distributed with respect to each Class
A Common Share (as hereinafter defined) outstanding on October 31, 2000, and the
Board of Directors of the Company has authorized the issuance of one Right in
respect of (1) each Class A Common Share issued after October 31, 2000, and the
earlier of the Shares Acquisition Date or the Expiration Date (as such terms are
hereinafter defined), (2) each Class B Common Share (as hereinafter defined)
outstanding on December 29, 2000, and (3) each Class B Common Share issued
between December 29, 2000, and the earlier of the Shares Acquisition Date or the
Expiration Date, including in each case Common Shares that are treasury shares
and subsequently become outstanding. Each Right represents the right to
purchase one Class A Common Share.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
(a) "Acquiring Person" means any Person (as such term is hereinafter
defined) that, together with all Affiliates and Associates (as such terms are
hereinafter defined) of the Person, is the Beneficial Owner (as such term is
hereinafter defined) of a number of Class A Common Shares that equals or exceeds
15% of the number of Class A Common Shares then outstanding, but will not
include the Company, any subsidiary of the Company, any employee benefit plan or
employee stock ownership plan of the Company or of any subsidiary of the Company
or any person organized, appointed or established by the Company or any
subsidiary of the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person will become an "Acquiring
Person" as the result of an acquisition of Class A Common Shares by the Company
that, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by the Person to 15% or more of the Class A
Common Shares then outstanding; except that, if a Person becomes the Beneficial
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Owner of 15% or more of the Class A Common Shares then outstanding by reason of
share purchases by the Company and, after such share purchases by the Company,
becomes the Beneficial Owner of any additional Class A Common Shares, then the
Person will be deemed to be an "Acquiring Person". In addition, if the Board of
Directors of the Company determines in good faith that a Person that would
otherwise be an "Acquiring Person" has become the Beneficial Owner of 15% or
more of the Class A Common Shares inadvertently, and the Person divests as
promptly as practicable a sufficient number of Class A Common Shares so that the
Person would no longer be an "Acquiring Person", then the Person will not be
deemed to be an "Acquiring Person" for any purposes of this Agreement.
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(b) "Affiliate" and "Associate" have the meanings given to them 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 hereof.
(c) "Associated Acquiring Person" means (i) 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 Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to any
Person who holds an equity interest in such Acquiring Person or with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
that has, as a primary purpose or effect, the avoidance of Section 7(e).
(d) A Person will be deemed to be the "Beneficial Owner" of and will
be deemed to "beneficially own" any securities:
(i) that the Person, or any of the Person's Affiliates or
Associates, beneficially owns, directly or indirectly;
(ii) that the Person or any of the Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; except that, a Person will not
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be deemed to be the "Beneficial Owner" of or to "beneficially own" (1)
securities tendered pursuant to a tender offer made by the Person or any of
the Person's Affiliates or Associates until such tendered securities are
accepted for purchase, or (2) securities issuable upon exercise of these
Rights;
(iii) that the Person or any of the 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); except that, a Person will not be deemed to be the Beneficial
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Owner of or to "beneficially own" any security under this subparagraph
(iii) if the agreement, arrangement or understanding to vote such security
(A) arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and (B) is not then
reportable by the Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iv) that are beneficially owned, directly or indirectly, by any
other Person with which the Person or any of the Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding, voting (except pursuant
to a revocable proxy as described in subparagraph (iii) of this paragraph
(c)) or disposing of any securities of the Company.
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Notwithstanding the foregoing, (x) a Person will not be deemed to be
the Beneficial Owner of, or to "beneficially own," any security if beneficial
ownership arises solely as a result of the Person's status as a "clearing
agency," as defined in Section 3(a)(23) of the Exchange Act, (y) a Person
engaged in business as an underwriter of securities will not be deemed to be the
Beneficial Owner of, or to "beneficially own," any securities acquired through
the Person's participation in good faith in an underwriting syndicate pursuant
to an agreement to which the Company is a party until expiration of 40 calendar
days after the date on which the securities are acquired, and (z) for purposes
of determining the amount of Class A Common Shares beneficially owned by any of
the Family Members, (A) the Class A Common Shares beneficially owned by any one
or more of the Family Members will not be deemed to be beneficially owned by any
other Family member, whether individually or as part of a group, and (B) the
Class A Common Shares beneficially owned by any one or more of the Family
Members that, after the date of this Agreement, are transferred (whether the
transfer is voluntarily or by operation of law and whether the transfer is of a
direct or indirect interest in the shares) to any other Family Member will not
be deemed to be beneficially owned by the other Family Member.
(e) "Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Ohio are authorized or
obligated by law or executive order to close.
(f) "Class A Common Shares" means the Class A Common Shares, without
par value, of the Company.
(g) "Class B Common Shares" means the Class B Common Shares, without
par value, of the Company.
(h) "Close of business" on any given date means 5:00 P.M., Cleveland
time, on such date; except that, if such date is not a Business Day, it will
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mean 5:00 P.M., Cleveland time, on the next succeeding Business Day.
(i) "Common Shares" means the Class A Common Shares and the Class B
Common Shares.
(j) "Current market price" is defined in Section 11(d).
(k) "Exchange Act" is defined in Section 10.
(l) "Exercise Price" means the exercise price per share set forth in
Section 11(a)(ii).
(m) "Expiration Date" is defined in Section 7(a).
(n) "Family Members" mean Xxxxxx Xxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxx
Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxx, their descendants, their
spouses, and the spouses of their descendants, the executors, administrators,
and custodians of any of the foregoing, and any trust for the benefit of any of
the foregoing.
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(o) "Issuance" includes the issuance of authorized but unissued
shares and the transfer of treasury shares. In the event the Class A Common
Shares or Class B Common Shares are subdivided into a greater number of shares,
the excess of the number of shares into which the Class A Common Shares or the
Class B Common Shares are subdivided over the number of shares prior to the
subdivision will be deemed to be "issued."
(p) "NASDAQ" is defined in Section 11(d).
(q) "Person" means any individual, firm, corporation or other entity.
(r) "Purchase Price" means the purchase price per share set forth in
Section 7(b).
(s) "Redemption Price" is defined in Section 22(a).
(t) "SEC" means the Securities and Exchange Commission.
(u) "Securities Act" is defined in Section 9(c).
(v) "Shares Acquisition Date" means the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the SEC or otherwise) that an Acquiring Person has become such.
(w) "Subsidiary" means any corporation or other entity of which a
majority of the voting power of the voting equity securities or other equity
interests is owned, directly or indirectly, by the Company.
(x) "Triggering Event" is defined in Section 11(a)(ii).
Section 2. Appointment of Rights Agent. The Company hereby appoints
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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. Any actions that may be taken by the Rights Agent
pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent.
Section 3. Issue of Right Certificates.
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(a) Until the Shares Acquisition Date, (i) the Rights will be
evidenced (subject to the provisions of Section 3(b)) by the certificates for
the Common Shares registered in the names of the holders of the Common Shares
(which certificates for the Common Shares will also be deemed to be Right
Certificates) and not by separate Right Certificates, and (ii) the right to
receive Right Certificates will be transferable only in connection with the
transfer of the Common Shares. As soon as practicable after receipt of written
notice from the Company that the Shares Acquisition Date has occurred, the
Rights Agent will send, by first-class, insured, postage prepaid mail, at the
expense of the Company, to each record holder of the Common Shares as of the
close of business on the Shares Acquisition Date, at the address of such holder
shown on the records of the Company, a Right Certificate, in substantially the
form of Exhibit A
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hereto, evidencing one Right for each Common Share held of record as of the
close of business on the Shares Acquisition Date. As of the close of business on
the Shares Acquisition Date, the Rights will be evidenced solely by such Right
Certificates.
(b) Rights will be issued in respect of all Common Shares issued
(including but not limited to Common Shares that are treasury shares and
subsequently become outstanding) or surrendered for transfer or exchange after
October 31, 2000, in the case of Class A Common Shares, or after December 29,
2000, in the case of Class B Common Shares, but prior to the earlier of the
Shares Acquisition Date or the Expiration Date. Certificates representing such
Common Shares will have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in an Amended and Restated Rights
Agreement between Xx-Xxx Stores, Inc., and ____________________,
as Rights Agent, dated as of October 31, 2000, as such Amended
and Restated Rights Agreement may be amended from time to time
thereafter, a copy of which is on file at the principal executive
offices of Xx-Xxx Stores, Inc. Under certain circumstances, as
set forth in the Amended and Restated Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Xx-Xxx Stores, Inc.,
will mail to the holder of this certificate a copy of the Amended
and Restated Rights Agreement (as in effect on the date of
mailing) without charge promptly after receipt of a written
request therefor. Under certain circumstances, Rights that are or
were beneficially owned by Acquiring Persons or their Affiliates
or Associates (as such terms are defined in the Amended and
Restated Rights Agreement) and any subsequent holder of such
Rights may become null and void.
Until the Shares Acquisition Date, the Rights associated with the
Common Shares represented by such certificates will be evidenced by such
certificates alone, and the surrender for transfer of any of such certificates
will also constitute the surrender for transfer of the Rights associated with
the Common Shares represented by such certificate.
Section 4. Form of Right Certificates.
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(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) will be
substantially the same as Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law, 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 of any association on which the Rights may from time to time
be authorized for quotation, or to conform to usage. Subject to the provisions
of Section 21, the Right Certificates, whenever issued, will entitle the holders
thereof to purchase such number of Class A Common Shares (or, following a
Triggering Event, Class A Common Shares, other securities, cash or other assets,
as the case may be) as will be set forth therein at the Purchase Price (or, upon
the occurrence of a Triggering Event, at the Exercise
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Price), but the number of such shares, the Purchase Price and the Exercise Price
will be subject to adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any Right
Certificate issued pursuant to Section 3 or Section 21 that represents Rights
beneficially owned by an Acquiring Person or an Associated Acquiring Person, any
Right Certificate issued at any time to any nominee of an Acquiring Person or an
Associated Acquiring Person, and any Right Certificate issued pursuant to
Section 6 or Section 11 upon transfer, exchange, replacement or adjustment of
any Right Certificate referred to in this sentence, will contain the following
legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Associated Acquiring Person (as such terms are
defined in the Rights Agreement between Xx-Xxx Stores, Inc., and
____________________, as Rights Agent, dated as of October 31,
2000). Accordingly, this Right Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. The Right Certificates
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will be executed on behalf of the Company by its Chairman of the Board,
President or any Vice President, either manually or by facsimile signature, and
will be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates will be
countersigned manually or by facsimile by the Rights Agent and will not be valid
for any purpose unless so countersigned. In case any officer of the Company who
has signed any of the Right Certificates ceases to hold such office of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates may nevertheless be countersigned by the
Rights Agent, issued and delivered with the same force and effect as though the
person who signed such Right Certificates had not ceased to hold such office of
the Company; and any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right Certificate,
is a proper officer of the Company to sign such Right Certificate, although at
the date of the execution of this Rights Agreement any the Person did not hold
such office.
Following the Shares Acquisition Date, the Rights Agent will keep or
cause to be kept, at one of its offices in Cleveland, Ohio, books for
registration and transfer of the Right Certificates. Such books will show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 13, at any time after the close of business on the Shares Acquisition
Date, and at or prior to the close of business on the Expiration Date, any Right
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling the
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registered holder to purchase a like number of Class A Common Shares (or,
following a Triggering Event, a like number or amount of Class A Common Shares,
other securities, cash or other assets, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates will make such request in writing delivered to the Rights
Agent, and will surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent in Cleveland, Ohio for such purpose. Neither the Rights Agent nor
the Company will be obligated to take any action with respect to the transfer of
any such surrendered Right Certificate until the registered holder has completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and has provided such additional evidence of the
identity of the Beneficial Owner or former Beneficial Owner, or Affiliates or
Associates thereof, as the Company may reasonably request. Thereupon the Rights
Agent will, subject to Section 4(b), Section 7(e) and Section 13, 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 the loss, theft or destruction of a Right
Certificate, of indemnity or security reasonably satisfactory to them and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and, in case of the mutilation of a Right Certificate, upon
surrender to the Rights Agent and cancellation of the mutilated Right
Certificate, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
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Date of Rights; Null and Void Rights. Subject to Section 7(e), the registered
-------------------------------------
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after the
Shares Acquisition 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 its principal office in Cleveland, Ohio, together with payment of the
aggregate Purchase Price with respect to the total number of Class A Common
Shares (or the aggregate Exercise Price with respect to the total number of
Class A Common Shares or other securities, cash or other assets, as the case may
be) as to which such surrendered Rights are then exercised, at or prior to the
close of business on October 31, 2010 (the "Expiration Date").
(b) Each Right will, as of the date of this Amended and Restated
Rights Agreement, represent the right to purchase one Class A Common Share,
subject to adjustment as provided in Section 11. The Purchase Price for each
Class A Common Share pursuant to the exercise of a Right will, as of the date of
this Amended and Restated Rights Agreement, be $60.00, subject to further
adjustment from time to time as provided in Section 11, and will be payable in
lawful money of the United States of America in accordance with Section 7(c).
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(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment of the Purchase Price for the Class A Common Shares (or
the Exercise Price for the Class A Common Shares, other securities, cash or
assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax in cash, or by certified check or bank draft payable to
the order of the Company, the Rights Agent will, subject to Section 19(k),
promptly (i) requisition from any transfer agent of the Class A Common Shares
certificates for the total number of Class A Common Shares to be purchased, and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requisitions, (ii) if the Company has elected to deposit the total number
of Class A Common Shares issuable upon exercise of the Rights with a depositary
agent, requisition from the depositary agent depositary receipts representing
such number of Class A Common Shares as are to be purchased (in which case
certificates for the Class A Common Shares represented by such receipts will be
deposited by the transfer agent with the depositary agent), and the Company will
direct the depositary agent to comply with all such requisitions, (iii) when
applicable, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 13, (iv) promptly
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (v) when applicable, after receipt promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue securities, pay cash or distribute assets
pursuant to Section 11(a)(iii) or Section 13, the Company will make all
arrangements necessary so that such securities, cash, and assets are available
for issuance, payment, or distribution by the Rights Agent, as and when
appropriate.
(d) In case the registered holder of any Right Certificate exercises
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised will be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 13.
(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are or were at any time beneficially owned by an Acquiring Person or
an Associated Acquiring Person, will become null and void upon the occurrence of
a Triggering Event and no holder of such Rights will have any right with respect
to such Rights under any provision of this Agreement from and after the
occurrence of the Triggering Event. The Company will use all reasonable efforts
to insure that the provisions of this Section 7(e) and Section 4(b) are complied
with, but will have no liability to any holder of Right Certificates or other
Person as a result of its failure properly to make any determinations with
respect to an Acquiring Person, an Associated Acquiring Person or their
transferees or nominees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company will be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder has (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or
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former Beneficial Owner) or Affiliates or Associates thereof as the Company may
reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
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Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange will, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form
or, if surrendered to the Rights Agent, will be cancelled by it, and no Right
Certificates will be issued in lieu thereof except as expressly permitted by the
provisions of this Agreement. The Company will deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent will cancel and retire, any
Right Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent will deliver all cancelled Right Certificates
to the Company or will, at the written request of the Company, destroy such
cancelled Right Certificates and, in such case, will deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Class A Common Shares.
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(a) The Company will cause to be reserved and kept available out of
its authorized and unissued Class A Common Shares or any authorized and issued
Class A Common Shares held in its treasury, the number of Class A Common Shares
that will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) The Company will, as soon as practicable following a Triggering
Event, cause all Class A Common Shares (or other securities, as the case may be)
reserved for issuance upon exercise of the Rights to be, upon official notice of
issuance, listed on the stock exchange or market on which the Class A Common
Shares are then listed for trading.
(c) The Company will, as soon as practicable following the first
occurrence of a Triggering Event, (i) prepare and file a registration statement
under the Securities Act of 1933 (the "Securities Act") with respect to the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) use its reasonable best efforts to cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) use its reasonable best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the date of the expiration of the
Rights. The Company will also take such actions as may be appropriate under the
blue sky laws of the various states in connection with the issuance of the
Rights and the securities purchasable upon exercise of the Rights. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days,
the exercisability of the Rights in order to prepare and file such registration
statement. Upon any such suspension, the Company will issue a public
announcement and notice to the Rights Agent stating that the exercisability of
the Rights has been temporarily suspended, and the Company will issue a public
announcement and notice to the Rights Agent at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights will not be exercisable in any jurisdiction in which any
requisite registration or qualification will not have been obtained.
(d) The Company will take all such action as may be necessary to
ensure that all Class A Common Shares (or other securities, as the case may be)
delivered upon exercise of
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Rights will, at the time of delivery of the certificates therefor (subject to
payment of the Purchase Price or the Exercise Price, as the case may be), be
duly and validly authorized and issued, fully paid and nonassessable, freely
tradeable, free and clear of any liens, encumbrances or other adverse claims and
not subject to any call or first refusal right.
(e) The Company will pay when due and payable all federal and state
transfer taxes and charges that may be payable in respect of the issuance or
delivery of the Right Certificates or of any Class A Common Shares (or other
securities, as the case may be) upon the exercise of Rights. The Company will
not, however, be required to (a) pay any transfer tax that may be payable in
respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for the Class A Common
Shares (or other securities, as the case may be) in a name other than that of
the registered holder of the Right Certificate evidencing the Rights surrendered
for exercise or (b) issue or deliver any certificates for a number of Class A
Common Shares (or other securities, as the case may be) upon the exercise of any
Rights until any such tax has 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 is due.
Section 10. Class A Common Share Certificate Date. Each person in
--------------------------------------
whose name any certificate for Class A Common Shares (or other securities, as
the case may be) is issued upon the exercise of Rights will for all purposes be
deemed to have become the holder of record of such Class A Common Shares (or
other securities, as the case may be) represented thereby on, and such
certificate will be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (or the
Exercise Price, as the case may be) and any applicable transfer taxes was made;
except that, if the date of such surrender and payment is a date upon which the
------ ----
Class A Common Share (or other security, as the case may be) transfer books of
the Company are closed, the Person will be deemed to have become the record
holder thereof on, and such certificate will be dated, the next succeeding
Business Day on which the Class A Common Shares (or other securities, as the
case may be) transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate will not be
entitled to any rights of a shareholder of the Company with respect to shares
for which the Rights are exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Exercise Price, Number and
--------------------------------------------------------
Type of Shares or Number of Rights. The Purchase Price and the Exercise Price,
----------------------------------
the number of Class A Common Shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a)
(i) In the event the Company at any time after the date of this
Agreement (A) declares a dividend on the Class A Common Shares payable in
Class A Common Shares, (B) subdivides the outstanding Class A Common
Shares, (C) combines the outstanding Class A Common Shares into a smaller
number of shares, or (D) issues
10
any shares of its capital stock in a reclassification of the Class A Common
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e), the Purchase Price and the Exercise Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
Class A Common Shares or shares of capital stock, as the case may be,
issuable on such date, will be proportionately adjusted so that the holder
of any Right exercised after such time will be entitled to receive the
aggregate number and kind of Class A Common Shares or shares of capital
stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Class A Common Share
transfer books of the Company were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs that would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) will be in
addition to, and will be made prior to any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event any Person becomes an Acquiring Person (a
"Triggering Event"), each holder of a Right (except as provided in Section
7(e)) will thereafter have the right to receive, upon exercise of the Right
in accordance with the terms of this Agreement, one Class A Common Share
for an Exercise Price of $.50 per share; the number of such Class A Common
Shares and the Exercise Price will be subject to adjustment as provided in
this Section 11.
(iii) In the event that there are not enough Class A Common
Shares authorized but unissued or held as treasury shares to permit the
exercise in full of the Rights in accordance with paragraph (ii) above, the
Company will take all such actions as may be necessary to authorize a
sufficient number of additional Class A Common Shares to permit the
exercise in full of the Rights and will refrain from paying dividends or
making any other distributions on the Class A Common Shares or the Class B
Common Shares until such additional Class A Common Shares have been
authorized and made available to the holders of the Rights for issuance
upon exercise of their Rights.
(b) In case the Company fixes a record date for the issuance of
rights or warrants to all holders of Class A Common Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Class A Common Shares at a price per Class A Common Share (or having
a conversion price per share, if a security convertible into Class A Common
Shares) less than the current market price (as defined in Section 11(d)) per
Class A Common Share on such record date, the Purchase Price and the Exercise
Price to be in effect after such record date will be determined by multiplying
the Purchase Price and the Exercise Price in effect immediately prior to such
record date by a fraction, of which the numerator is the number of Class A
Common Shares outstanding on such record date plus the number of Class A Common
Shares which the aggregate offering price of the total number of Class A 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
11
market price and of which the denominator is the number of Class A Common Shares
outstanding on such record date plus the number of additional Class A 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 is paid in a consideration part or all of which is in a form
other than cash, the value of such consideration will be as determined in good
faith by the Board of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent. Class A Common Shares
owned by or held for the account of the Company will not be deemed outstanding
for the purpose of any such computation. Such adjustment will be made
successively whenever such a record date is fixed; and in the event that such
rights or warrants are not so issued, the Purchase Price and the Exercise Price
will be adjusted to be the Purchase Price and the Exercise Price that would then
be in effect if such record date had not been fixed.
(c) In case the Company fixes a record date for the making of a
distribution to all holders of Class A Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend payable in
Class A Common Shares, but including any dividend payable in stock other than
Class A Common Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b)), the Purchase Price and the Exercise Price to be
in effect after such record date will be determined by multiplying the Purchase
Price or the Exercise Price, as the case may be, in effect immediately prior to
such record date by a fraction, of which the numerator is the current market
price (as defined in Section 11(d)) per Class A 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 will be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Class A Common Share and of which the denominator is the
current market price of one Class A Common Share. Such adjustments will be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price and the Exercise Price will be
adjusted to be the Purchase Price and the Exercise Price that would then be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current market
price" or "value" per share of the Class A Common Shares on any date of
determination will be the average of the daily closing prices per share of such
Class A Common Shares for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; except that, in the event
------ ----
that the "current market price" or "value" per share of the Class A Common
Shares is determined during the period following the announcement by the issuer
of such Class A Common Shares of (A) a dividend or distribution on such Class A
Common Shares payable in such Class A Common Shares or securities convertible
into such Class A Common Shares or (B) any subdivision, combination or
reclassification of such Class A Common Shares and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution or the
record date for such subdivision, combination or reclassification, then, and in
each such case, the "current market price" or "value" will be appropriately
adjusted to take into account ex-dividend trading. The closing price for each
day will be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked
12
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange (the "NYSE") or, if the Class A Common
Shares are not listed or admitted to trading on the NYSE, as reported in the
NASDAQ Stock Market ("NASDAQ") or, if the Class A Common Shares are not listed
or admitted to trading on the NYSE or NASDAQ, as reported in the principal
consolidated transaction reporting system on which the Class A Common Shares are
listed or admitted to trading or, if the Class A Common Shares are not listed or
admitted to trading on the NYSE or NASDAQ or reported by any consolidated
transaction reporting system, 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. or such other organization then reporting transactions
in the over-the-counter market or, if on any such date the Class A Common Shares
are not listed or admitted to trading on the NYSE or NASDAQ or reported by any
consolidated transaction reporting system or other organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Class A Common Shares selected by the Board of Directors
of the Company. The term "Trading Day" will mean a day on which the principal
national securities exchange or market on which Class A Common Shares are listed
or admitted to trading is open for the transaction of business or, if the Class
A Common Shares are not listed or admitted to trading on any national securities
exchange or market, a Monday, Tuesday, Wednesday, Thursday or Friday on which
banking institutions in the State of Ohio are not authorized or obligated by law
or executive order to close. If the Class A Common Shares are not publicly held
or not so listed or traded, "current market price" or "value" per share will
mean the value per share as determined in good faith by an independent
investment banking firm selected by the Board of Directors, whose determination
will be described in a statement filed with the Rights Agent and will be
conclusive for all purposes.
(e) No adjustment in the Purchase Price or the Exercise Price will be
required unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments that by reason
-------- -------
of this Section 11(e) are not required to be made will be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 will be made to the nearest cent or to the nearest ten-thousandth of
a Class A Common Share, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 will be made
no later than the earlier of (i) three years from the date of the transaction
that mandates such adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right exercised after such adjustment becomes entitled to
receive upon exercise of such Right any shares of capital stock of the Company
other than Class A Common Shares, thereafter the number of, and the Purchase
Price and the Exercise Price for, such other shares will be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Class A Common Shares
contained in Section 11(a) through (m)) inclusive, and the provisions of Section
7, Section 9, Section 10 and Section 13 with respect to the Class A Common
Shares will apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price or the Exercise Price hereunder will
evidence the right to purchase, at
13
the adjusted Purchase Price or the adjusted Exercise Price, as the case may be,
the number of Class A Common Shares (or other securities, as the case may be)
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company has exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price or the Exercise Price
as a result of the calculations made in Section 11(b) and Section 11(c), each
Right outstanding immediately prior to the making of such adjustment will
thereafter evidence the right to purchase, at the adjusted Purchase Price or the
adjusted Exercise Price, as the case may be, that number of Class A Common
Shares (calculated to the nearest ten-thousandth) obtained by (i) multiplying
(x) the number of Class A Common Shares covered by a Right immediately prior to
this adjustment by (y) the Purchase Price or the Exercise Price, as the case may
be, in effect immediately prior to such adjustment and (ii) dividing the product
so obtained by the Purchase Price or the Exercise Price, as the case may be, in
effect immediately after such adjustment.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price or the Exercise Price to adjust the number of Rights, in
substitution for any adjustment in the number of Class A Common Shares
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights will be exercisable for the number of
Class A 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 will become that number of Rights (calculated to the nearest
ten-thousandth), obtained by dividing the Purchase Price or the Exercise Price,
as the case may be, in effect immediately prior to such adjustment by the
Purchase Price or the Exercise Price, as the case may be, in effect immediately
after such adjustment. The Company will make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment to be made. This record date may be the date on which the Purchase
Price or the Exercise Price, as the case may be, is adjusted or any day
thereafter but, if Right Certificates have been issued, will 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 will, as promptly as practicable, cause to be distributed to
holders of Right Certificates on such record date Right Certificates evidencing,
subject to Section 13, the additional Rights to which such holders will be
entitled as a result of such adjustment or, at the option of the Company, will
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof if required by the Company, new Right
Certificates evidencing all the Rights to which such holders will be entitled
after such adjustment. Right Certificates so to be distributed will be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price or the adjusted Exercise
Price) and will be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Notwithstanding any adjustment or change in the Purchase Price,
the Exercise Price or the number of Class A Common Shares issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the
14
Purchase Price, the Exercise Price and the number of Class A Common Shares that
were expressed in the initial Right Certificates.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price or the Exercise Price below the stated capital, if any, of a
Class A Common Share issuable upon exercise of the Rights, the Company will take
any corporate action that may be necessary in order that the Company may validly
and legally issue fully paid and nonassessable Class A Common Shares at such
adjusted Purchase Price and or at such adjusted Exercise Price, as the case may
be.
(l) In any case in which this Section 11(i) requires that an
adjustment in the Purchase Price or 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 issuing to the holder of any Right exercised after
such record date the number of Class A Common Shares issuable upon such exercise
over and above the number of Class A Common Shares issuable upon such exercise
on the basis of the Purchase Price or the Exercise Price in effect prior to such
adjustment; provided, however, that the Company will deliver to such holder a
-------- -------
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional Class A Common Shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11(i) to the contrary notwithstanding,
the Company will be entitled to make such reduction in the Purchase Price or the
Exercise Price, in addition to those adjustments expressly required by this
Section 11(i), as and to the extent that it in its sole discretion determines to
be advisable in order that any consolidation or subdivision of Class A Common
Shares, issuance wholly for cash of any Class A Common Shares at less than the
current market price, issuance wholly for cash of securities that by their terms
are convertible into or exchangeable for Class A Common Shares, stock dividends
or issuance of rights, options or warrants referred to in this Section 11(i),
hereafter made by the Company to holders of its Class A Common Shares will not
be taxable to such holders.
Section 12. Certificates of Adjusted Purchase Price, Exercise Price
-------------------------------------------------------
or Number of Shares. Whenever an adjustment is made as provided in Section
-------------------
11(i), the Company will (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 Shares Acquisition
Date, to each holder of a certificate representing Common Shares) in accordance
with Section 24. The Rights Agent will be fully protected in relying on any such
certificate and on any adjustment therein contained, will not be obligated or
responsible for calculating any adjustment and will not be deemed to have
knowledge of such adjustment unless and until it has received such certificate.
Section 13. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company will not be required to issue fractions of Rights or
to distribute Right Certificates that evidence fractional Rights. In lieu of
such fractional Rights, the Company will pay 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
15
current market value of a whole Right. For the purposes of this Section 13(a),
the current market value of a whole Right will be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for each
day will be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange (the "NYSE") or, if the Rights are not listed or admitted to
trading on the NYSE, as reported in NASDAQ or, if the Rights are not listed or
admitted to trading on the NYSE or NASDAQ, as reported in the principal
consolidated transaction reporting system on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
the NYSE or NASDAQ or reported by any consolidated transaction reporting system,
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. or such
other organization then reporting transactions in the over-the-counter market
or, if on any such date the Rights are not listed or admitted to trading on the
NYSE or NASDAQ or reported by any consolidated transaction reporting system or
other 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.
(b) The Company will not be required to issue fractions of Class A
Common Shares upon exercise of the Rights or to distribute certificates that
evidence fractional shares. In lieu of fractional Class A Common Shares, the
Company may pay to the registered holders of Right Certificates at the time such
Right Certificates are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Class A Common Share. For
purposes of this Section 13(b), the current market value of one Class A Common
Share will be the closing price of a Class A Common Share (as determined
pursuant to Section 11(d)) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right.
16
Section 14. 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 Shares Acquisition Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Shares Acquisition Date, of any Common Share), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Shares Acquisition Date, of the Common Shares), may, in the holder's own
behalf and for the holder's own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act
in respect of, the holder's right to exercise the Rights evidenced by such Right
Certificate. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
Section 15. Agreement of Right Holders. Every holder of a Right by
---------------------------
accepting such Right consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Shares Acquisition Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Shares Acquisition Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent in Cleveland, Ohio, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed; and
(c) subject to Section 6, Section 7(e) and Section 7(f), the Company
and the Rights Agent may deem and treat the Person in whose name the Right
Certificate (or, prior to the Shares Acquisition Date, the associated Common
Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Share certificate made by anyone
other than the Company or the Rights Agent) for all purposes, and neither the
Company nor the Rights Agent will be affected by any notice to the contrary.
17
Section 16. Right Certificate Holder Not Deemed a Shareholder. No
-------------------------------------------------
holder, as such, of a Right Certificate will be entitled to vote, receive
dividends or be deemed for any purpose to be the holder of the number of Class A
Common Shares that may at any time be issuable on the exercise of the Rights
represented thereby, nor will anything contained herein or in any Right
Certificate give to any holder, as such, of a Right Certificate any of the
rights of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in Section
23), or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate have been exercised in
accordance with the provisions of this Agreement.
Section 17. Concerning the Rights Agent.
----------------------------
(a) The Company will pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time on demand of
the Rights Agent, to reimburse it for or pay 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 gross negligence, bad
faith or willful misconduct on the part of the Rights Agent as a result of
anything done or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including without limitation
the costs and expenses of defending against any claim of liability in connection
therewith. The costs and expenses of enforcing this right of indemnification
will also be paid by the Company. The indemnification provided for hereunder
will survive the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent may conclusively rely upon and will be protected
and will incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this Agreement in
reliance upon any Right Certificate or certificate for Common Shares or other
securities, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other document believed by it in good faith to be genuine and to be
signed, executed and, where necessary, verified or acknowledged by the proper
person or persons.
(c) Notwithstanding anything in this Agreement to the contrary, in no
event will the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind (including but not limited to lost profits), even if
the Rights Agent has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
Section 18. Merger or Consolidation or Change of Name of Rights
---------------------------------------------------
Agent.
-----
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent will be a party, or any corporation, succeeding to
the shareholder services business of the Rights Agent or any successor Rights
Agent, will be the successor to the Rights Agent under this Agreement without
18
the execution or filing of any document or any further act on the part of any of
the parties hereto, provided that such corporation is for appointment as a
successor Rights Agent under the provisions of Section 20. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Right Certificates has been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor so
countersigned; in case at that time any of the Right Certificates have not been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases, such Right Certificates
will have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Right Certificates has been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; in case at that time any of the
Right Certificates have not been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and in
all such cases, such Right Certificates will have the full force provided in the
Right Certificates and in this Agreement.
Section 19. Duties of Rights Agent. The Rights Agent undertakes the
-----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, and no implied duties or obligations will be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, will be bound:
(a) Before the Rights Agent acts or refrains from acting, the Rights
Agent may consult with legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel will be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof is specifically
prescribed in this Agreement) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate will be full authorization
to the Rights Agent for any action taken or omitted in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify such
statements or recitals, but all such statements and recitals are and will be
deemed to have been made by the Company only.
19
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof and as
provided in Section 17); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor will it be responsible for any adjustment required under the
provisions of Section 11 or the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such adjustment); nor will it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Class A Common Shares to be issued pursuant
to this Agreement or any Right Certificate or as to whether any Class A Common
Shares will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further 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 Chairman of the Board, the President, any Vice President, the
Treasurer or the Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it will not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein will preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorney or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement will require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there will be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
20
(k) The Rights Agent will not be required to take notice or be deemed
to have notice of any fact, event or determination (including, without
limitation, any dates or events defined in this Agreement or the designation of
any Person as an Acquiring Person, Associated Acquiring Person, Affiliate or
Associate) under this Agreement unless and until the Rights Agent is
specifically notified in writing by the Company of such fact, event or
determination.
(l) 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 clause 1 or 2 thereof,
the Rights Agent will not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
Section 20. 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 by registered or certified mail to the
Company and to each transfer agent of the Common Shares; if the resignation
occurs after a Triggering Event, notice in writing will, at the expense of the
Company, also be sent by first class mail to the holders of the Right
Certificates. The Rights Agent or any successor Rights Agent that the Company
may appoint may, prior to a Triggering Event, be removed by the Company and be
discharged from its duties under this Agreement upon 30 days notice in writing
mailed by registered or certified mail to the Rights Agent and to each transfer
agent of the Common Shares. If the Rights Agent resigns or is removed by the
Company or otherwise becomes incapable of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period of 30 days after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who will, with such notice, submit his Right
Certificate for inspection by the Company) or after it has given notice of such
removal, then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a successor Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
will be a corporation organized and doing business under the law of the United
States or of any other state of the United States, in good standing, that is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority or that has at the time
of its appointment as Rights Agent a combined capital and surplus of at least
$50 million. After appointment, the successor Rights Agent will be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent will deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares. Failure to give any notice provided for in this Section 20 or
any defect therein, however, will not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 21. 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
21
Directors to reflect any adjustment or change in the Purchase Price or the
Exercise Price per share and the number, kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 22. Redemption.
----------
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of the Shares Acquisition Date or the Expiration Date,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $0.005 per Right, appropriately further adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(the "Redemption Price").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights will be to receive the Redemption
Price. Within ten calendar days after the action of the Board of Directors
ordering the redemption of the Rights, the Company will give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Shares Acquisition Date, on the
registry books of the transfer agent for the Common Shares. Any notice that is
mailed in the manner herein provided will be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any of the Rights at any time in any manner other than that
specifically set forth in this Section 22 or in connection with the repurchase
of Common Shares prior to the Shares Acquisition Date.
Section 23. Notice of Certain Events. In case the Company proposes at
------------------------
any time following the Shares Acquisition Date to (a) pay any dividend payable
in stock of any class to the holders of Class A Common Shares or make any other
distribution to the holders of Class A Common Shares (other than dividends
payable in Class A Shares and regular cash dividends), (b) offer to the holders
of Class A Common Shares rights or warrants to subscribe for or to purchase any
additional Class A Common Shares or shares of stock of any class or any other
securities, rights or options, (c) effect any reclassification of its Common
Shares, (d) 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 (e) effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company will give to the
Rights Agent and to each holder of a Right, in accordance with Section 24, a
notice of such proposed action, which will specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Class A Common Shares, if any such
date is to be fixed, and such notice will be so given, in the case of any action
described in clause (a) or (b) above, at least twenty days prior to the record
date for determining holders of the Class A Common Shares for purposes of such
action and, in the case of any such other action, at least twenty days prior to
the date of the taking of such proposed
22
action or the date of participation therein by the holders of the Class A Common
Shares, whichever will be the earlier.
In case of any Triggering Event, then the Company will as soon as
practicable thereafter give to the Rights Agent and to each holder of a Right,
in accordance with Section 24, a notice of the occurrence of such Triggering
Event, which will specify the event and the consequences of the event to holders
of Rights under Section 11(a)(ii).
Section 24. 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 will be sufficiently given or made if
personally delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
Xx-Xxx Stores, Inc.
0000 Xxxxxx Xxxx
Xxxxxx, Xxxx 00000
Attention: President
Subject to the provisions of Section 20, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent will be sufficiently given or made if
personally delivered or sent by registered or certified mail and will be deemed
given upon receipt, addressed (until another address is filed in writing with
the Company) as follows:
National City Bank
0000 Xxxx 0/xx/ Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Corporate Trust Administration
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to or on the holder of any Right Certificate
will be sufficiently given or made if personally delivered or 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 25. Supplements and Amendments. The Company may from time to
--------------------------
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contain herein which may be defective or inconsistent
with any other provision herein, or (iii) prior to the Shares Acquisition Date,
change or supplement the provisions hereunder that the Company may deem
necessary or desirable and not adverse to the interests of the holders of Common
Shares. 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 25, the Rights Agent will execute such supplement
or amendment unless the Rights Agent determines in good faith that such
supplement or amendment would adversely affect its interests under this
Agreement. Prior to the Shares Acquisition Date, the interests of the holders of
Rights will be deemed coincident with the interests of the holders of Common
Shares. Notwithstanding
23
anything in this Agreement to the contrary, no supplement or amendment that
changes the rights and duties of the Rights Agent under this agreement will be
effective against the Rights Agent without the execution of such supplement or
amendment by the Rights Agent.
Section 26. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent will bind and
inure to the benefit of their respective successors and assigns hereunder.
Section 27. Determination and Actions by the Board of Directors, etc.
--------------------------------------------------------
For all purposes of this Agreement, any calculation of the number of Class A
Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Class A Common Shares
of which any Person is the Beneficial Owner, will be made in accordance with the
provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company will have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board, or the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend or supplement this Agreement). All such actions,
calculations, interpretations and determinations (including, for the purpose of
clause (ii) below, all omissions with respect to the foregoing) that are done or
made by the Board in good faith, will (i) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Right Certificates and all
other parties, and (ii) not subject the Board to any liability to any holder of
any Right Certificate.
Section 28. Benefits of this Agreement. Nothing in this Agreement
--------------------------
will be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Shares Acquisition Date, the registered holders of the Common
Shares) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement will be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Shares Acquisition Date, the registered holders of the Common Shares).
Section 29. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement will remain in
full force and effect and will in no way be affected, impaired or invalidated
Section 30. Governing Law. This Agreement and each Right Certificate
-------------
will be deemed to be a contract made under the laws of the State of Ohio and for
all purposes will be governed by and construed in accordance with the laws of
such State applicable to contracts to be made and performed entirely within such
State.
24
Section 31. Counterparts. This Agreement may be executed in any
------------
number of counterparts and each of such counterparts will for all purposes be
deemed to be an original, and all such counterparts will together constitute but
one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the
--------------------
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions hereof.
[signature page follows]
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
XX-XXX STORES, INC. Attest:
By:_____________________________ By:_____________________________
Name:___________________________ Name:___________________________
Title:__________________________ Title:__________________________
[RIGHTS AGENT] Attest:
By:_____________________________ By:_____________________________
Name:___________________________ Name:___________________________
Title:__________________________ Title:__________________________
26
INDEX OF DEFINED TERMS
Page
----
Acquiring Person................................................... 1
Affiliate.......................................................... 2
Agreement.......................................................... 1
Associate.......................................................... 2
Associated Acquiring Person........................................ 2
Beneficial Owner................................................... 2
beneficially own................................................... 2
Business Day....................................................... 3
Class A Common Shares.............................................. 3
Class B Common Shares.............................................. 3
Close of business.................................................. 3
Common Shares...................................................... 3
Company............................................................ 1
current market price............................................... 12
Exchange Act....................................................... 2
Exercise Price..................................................... 3
Expiration Date.................................................... 7
Family Members..................................................... 3
Issuance........................................................... 4
NASDAQ............................................................. 13
NYSE............................................................... 13
Person............................................................. 4
Purchase Price..................................................... 4
Redemption Price................................................... 22
Right.............................................................. 1
Rights Agent....................................................... 1
SEC................................................................ 4
Securities Act..................................................... 9
Shares Acquisition Date............................................ 4
Subsidiary......................................................... 4
Trading Day........................................................ 13
Triggering Event................................................... 11
27
Exhibit A
[FORM OF RIGHT CERTIFICATE]
Certificate No. R - ___________ Rights
NOT EXERCISABLE AFTER OCTOBER 31, 2010 OR EARLIER IF NOTICE OF REDEMPTION
IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.005 PER RIGHT ON THE TERMS SET FORTH IN THE AMENDED AND
RESTATED RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN ASSOCIATED ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(E) OF THE RIGHTS AGREEMENT.]/*/
RIGHT CERTIFICATE
This certifies that _________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Amended and Restated Rights Agreement, dated as of October 31, 2000 and as
amended to date (the "Rights Agreement"), between Xx-Xxx Stores, Inc., an Ohio
corporation (the "Company"), and ____________________, as Rights Agent (the
"Rights Agent"), to purchase from the Company at any time after the Shares
Acquisition Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M., Cleveland time, on October 31, 2010, at the principal office of the
Rights Agent, or its successors as Rights Agent, in __________, ___________, one
Class A Common Share of the Company (the "Class A Common Share"), at a purchase
price of $60.00 per share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate, the number
of Class A Common Shares that may be purchased upon exercise thereof and the
Purchase Price per share set forth above are the numbers and Purchase Price as
of October 31, 2000, based on the Class A Common Shares of the Company as
constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), each Right will entitled the holder to receive, upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed, one Class A Common Share for an Exercise Price of
$.50 per share (the "Exercise Price").
If the Rights evidenced by this Right Certificate are or at any time
were beneficially owned by an Acquiring Person or an Associated Acquiring Person
(as such terms are
________________________
/*/ The portion of the legend in brackets will be inserted only if
applicable.
A-1
defined in the Rights Agreement), such Rights will become null and void and no
holder hereof will have any right with respect to such Rights from and after the
occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price, the Exercise
Price and number and kind of Class A Common Shares or other securities that 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; reference is made to the Rights Agreement
for a full description of the rights, limitations of rights, obligations, duties
and immunities of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the principal
office of the Rights Agent in ________, ________. In addition, 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.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Class A Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered entitled such holder to purchase. If this Right
Certificate is exercised in part, the holder will be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number
of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price of $0.005 per Right.
The Company will not issue any fractional Class A Common Shares upon
the exercise of any Right or Rights evidenced hereby, but in lieu thereof may
make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate will be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Class A Common
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor will anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate have been exercised as provided in the Rights Agreement.
This Right Certificate will not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
A-2
WITNESS the signature (which may be by facsimile) of the proper
officers of the Company. Dated as of __________________, 20___.
XX-XXX STORES, INC. Attest:
By:_____________________________ By:_____________________________
Name:___________________________ Name:___________________________
Title:__________________________ Title:__________________________
Countersigned:
By:_____________________________
Name:___________________________
Title:__________________________
A-3
[FORM OF REVERSE SIDE OF RIGHT CERTIFICATE]
Form of Assignment
(To be executed by the registered holder if the
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 _______________________________
as attorney, to transfer the Right Certificate on the books of Xx-Xxx Stores,
Inc., with full power of substitution.
Dated: __________________, 20___
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person or
an Associated Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] 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 Associated Acquiring Person.
Dated: __________________, 20___
Signature
Notice
The signature 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, enlargement or change.
A-4
Form of Election to Purchase Class A Common Shares
(To be executed if the holder desires to
exercise the Right Certificate in accordance with
Section 11(a)(ii) of the Rights Agreement)
To Xx-Xxx Stores, Inc.:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Right Certificate to purchase the Class A Common
Shares issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
(Please print name and address)
Please insert social security
or other identifying number: ______________________________
If such number of Rights are not all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
will be registered in the name of and delivered to:
(Please print name and address)
Please insert social security
or other identifying number: ______________________________
Dated: __________________, 20___
Signature
(Signature must conform in all respects to name
of the holder as specified on the face of this
Right Certificate)
Signature Guaranteed:
A-5
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 Associated 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
Associated Acquiring Person.
Dated: ______________, 20___
Signature
Notice
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the fact of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
A-6
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
CLASS A COMMON SHARES
The Board of Directors of Xx-Xxx Stores, Inc. (the "Company") has
authorized the issuance of one Right for each outstanding Class A Common Share,
without par value, of the Company (the "Class A Common Shares") and each Class B
Common Share, without par value, of the Company (the "Class A Common Shares";
the Class A Common Shares and the Class B Common Shares are referred to together
as the "Common Shares"). As of October 31, 2000, Each Right entitles the
registered holder to purchase from the Company one Class A Common Share at a
price of $60.00 (the "Purchase Price"), subject to adjustment. Following the
Shares Acquisition Date (as hereinafter defined) and under the conditions
described below, each Right entitles the registered holder (other than an
Acquiring Person (as hereinafter defined) or Associated Acquiring Person) to
acquire one Class A Common Share for an exercise price of $.50 per share (the
"Exercise Price"). The description and terms of the Rights are set forth in an
Amended and Restated Rights Agreement (the "Rights Agreement"), dated as of
October 31, 2000, by and between the Company and ____________________, as Rights
Agent (the "Rights Agent").
Until there is a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the Class
A Common Shares then outstanding (the "Shares Acquisition Date"), the Rights
will be evidenced by the certificate for such Class A Common Share.
The Rights Agreement provides that, until the Shares Acquisition Date,
the Rights will be transferred with and only with the associated Common Shares.
Until the Shares Acquisition Date (or the earlier redemption or expiration of
the Rights), the surrender for transfer of any certificate for Common Shares
will also constitute the transfer of the Rights associated with the Common
Shares represented by the certificates. As soon as practicable following the
Shares Acquisition 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 Shares Acquisition Date, and thereafter such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Shares Acquisition Date. The
Rights will expire at the close of business on October 31, 2010 unless earlier
redeemed by the Company as described below.
Upon the occurrence of a Triggering Event (as defined in the Rights
Agreement), each holder of a Right, other than Rights that were or are
beneficially owned by an Acquiring Person or an Associated Acquiring Person
(which will thereafter be void), will have the right to receive, upon exercise
of the Right and payment of the Exercise Price, one Class A Common Share of the
Company.
The Purchase Price and the Exercise Price, and the number of Class A
Common Shares or other securities issuable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution.
B-1
With certain exceptions, no adjustment in the Purchase Price or the
Exercise Price will be required until cumulative adjustments require an
adjustment of at least 1% in the Purchase Price or the Exercise Price. No
fractional shares will be issued and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Class A Common Shares on the last
trading date prior to the date of exercise.
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.
At any time prior to the Shares Acquisition Date, the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $0.005 per Right (the "Redemption Price"). Immediately upon the action
of the Board of Directors of the Company electing to redeem the Rights, the
Company will make announcement thereof, and the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
The provisions of the Rights Agreement may be amended by the Board of
Directors in order to cure any ambiguity, to correct any defect or inconsistency
or, prior to the Shares Acquisition Date, to make changes deemed to be not
adverse to the interests of the holders of the Rights.
A copy of the Rights Agreement has been, and any amendments thereto
will be, filed with the Securities and Exchange Commission as an exhibit to the
Company's registration of the Rights on Form 8-A. A copy of the Rights
Agreement is available from the Company free of charge to any holder of Class A
Common Shares of the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, as it may be amended from time to time.
B-2
