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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
February 20, 1990
between
INTERNATIONAL FLAVORS & FRAGRANCES INC.
and
THE BANK OF NEW YORK,
as Rights Agent
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Article I
CERTAIN DEFINITIONS
Page
----
Section 1.1 Certain Definitions ....................................... 2
Article II
THE RIGHTS
Section 2.1 Summary of Rights ......................................... 10
Section 2.2 Legend on Common Stock Certificates ....................... 10
Section 2.3 Exercise of Rights; Separation of Rights .................. 11
Section 2.4 Adjustments to Exercise Price; Number of Rights ........... 16
Section 2.5 Date on Which Exercise is Effective ....................... 18
Section 2.6 Execution, Authentication, Delivery
and Dating of Rights Certificates ....................... 19
Section 2.7 Registration, Registration of Transfer and Exchange ....... 20
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates ............................................ 22
Section 2.9 Persons Deemed Owners ..................................... 23
Section 2.10 Delivery and Cancellation of Certificates ................. 24
Section 2.11 Agreement of Rights Holders ............................... 24
Article III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Flip-in ................................................... 25
Section 3.2 Flip-over ................................................. 29
Article IV
THE RIGHTS AGENT
Section 4.1 General ................................................... 31
Section 4.2 Merger or Consolidation or Change of Name of Rights Agent.. 32
Section 4.3 Duties of Rights Agent .................................... 33
Section 4.4 Change of Rights Agent .................................... 39
Article V
MISCELLANEOUS
Section 5.1 Redemption ................................................. 41
Section 5.2 Expiration ................................................. 42
Section 5.3 Issuance of New Rights Certificates ........................ 42
Section 5.4 Supplements and Amendments ................................. 42
Section 5.5 Fractional Shares .......................................... 43
Section 5.6 Rights of Action ........................................... 43
Section 5.7 Holder of Rights Not Deemed a Shareholder .................. 44
Section 5.8 Notice of Proposed Actions ................................. 45
Section 5.9 Notices .................................................... 45
Section 5.10 Suspension of Exercisability ............................... 47
Section 5.11 Costs of Enforcement ....................................... 47
Section 5.12 Successors ................................................. 47
Section 5.13 Benefits of this Agreement ................................. 47
Section 5.14 Descriptive Headings ....................................... 48
Section 5.15 Governing Law .............................................. 48
Section 5.16 Counterparts ............................................... 48
Section 5.17 Severability ............................................... 48
EXHIBITS
Exhibit A Form of Rights Certificate (Together with
Form of Election to Exercise)
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT (this "Agreement"), dated as of
February 20, 1990, between International Flavors & Fragrances Inc., a New York
corporation (the "Company"), and The Bank of New York, a New York banking
corporation, as Rights Agent (the "Rights Agent", which term shall include any
successor Rights Agent hereunder).
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
February 28, 1990 (the "Record Time") and (b) authorized the issuance of one
Right in respect of each share of Common Stock issued after the Record Time and
prior to the Separation Time (as hereinafter defined);
WHEREAS, each Right entitles the holder thereof, after the Separation Time,
to purchase securities of the Company (or, in certain cases, of certain other
entities) pursuant to the terms and subject to the conditions set forth herein;
and
WHEREAS, the Company desires to appoint the Rights Agent to act on behalf
of the Company, and the Rights Agent is willing so to act, in connection with
the issuance, transfer, exchange and replacement of Rights Certificates
(as hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
Article I--Certain Definitions
1.1 Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of 20%
or more of the outstanding shares of voting stock of the Company; provided,
however, that the term "Acquiring Person" shall not include any Person who is
the Beneficial Owner of outstanding shares of voting stock of the Company on the
date of this Agreement (an "Existing Shareholder"), including any group that may
be formed which is comprised solely of Existing Shareholders, until such time
hereafter as any such Existing Shareholder shall become the Beneficial Owner
(other than by means of a stock dividend, stock split, gift or inheritance) by
purchase of any additional shares of voting stock; and provided further that the
term "Acquiring Person" shall not include any Person who shall become the
Beneficial Owner of 20% or more of the outstanding shares of voting stock of the
Company solely as a result of an acquisition by the Company of shares of voting
stock, until such time thereafter as such Person shall become the Beneficial
Owner (other than by
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means of a stock dividend or stock split) of any additional shares of voting
stock.
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as such Rule
is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have "Beneficial
Ownership" of, and to "Beneficially Own", any securities as to which such Person
or any of such Person's Affiliates or Associates is or may be deemed to be the
beneficial owner pursuant to Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the "Beneficial
Owner", or to have "Beneficial Ownership" of, or to "Beneficially Own", any
security (i) solely because such security has been tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered security is accepted for payment or exchange,
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(ii) solely because such Person or any of such Person's Affiliates or Associates
has or shares the power to vote or direct the voting of such security pursuant
to 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 Securities Exchange Act of 1934, except if such power (or the
arrangements relating thereto) is then reportable under Item 6 of Schedule 13D
under the Securities Exchange Act of 1934 (or any similar provision of a
comparable or successor report), (iii) solely because of the grant by the
Company to such Person, in connection with the execution of an agreement to
acquire the Company, of options to acquire such security or (iv) held for or
pursuant to the terms of any employee stock ownership or other employee benefit
plan of the Company or a majority-owned Subsidiary of the Company. For purposes
of this Agreement, in determining the percentage of the outstanding shares of
Common Stock with respect to which a Person is the Beneficial Owner, all shares
as to which such Person is deemed the Beneficial Owner shall be deemed
outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in The City of New York are generally authorized or
obligated by law or executive order to close.
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"Close of business" on any given date shall mean the time on such date (or,
if such date is not a Business Day, the time on the next succeeding Business
Day) at which the offices of the transfer agent for the Common Stock (or, after
the Separation Time, the offices of the Rights Agent if the Rights Agent is
different than the transfer agent for the Common Stock) are closed to the
public.
"Common Stock" shall mean the shares of Common Stock, par value $0.12 1/2,
of the Company.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $200.00.
"Expiration Time" shall mean the earliest of (i) the Exchange Time, (ii)
the Redemption Time and (iii) the close of business on the tenth-year
anniversary of the date hereof.
"Flip-in Date" shall mean the close of business on the tenth business day
after any Stock Acquisition Date which is not the result of a Flip-over
Transaction or Event, unless the Rights are previously redeemed.
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"Flip-over Stock" of any Person shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the business
and affairs) of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately controls such
first-mentioned Person.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after the time when an Acquiring Person has become such in which,
directly or indirectly, (A) the Company shall consolidate or merge with any
other Person or (B) the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer) assets (i) aggregating
more than 50% of the assets (measured by either book value or fair market value)
or (ii) generating more than 50% of the operating income or cash flow, of the
Company and its Subsidiaries (taken as a whole) to any other Person (other than
the Company or one or more of its wholly owned Subsidiaries) or to two or more
such Persons which are Affiliates or Associates or otherwise acting in concert.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
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including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.4 hereof shall have caused the closing prices used to determine the Market
Price on any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, 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, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or,
if on any such date the securities
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are not listed or admitted to trading on any national securities exchange or
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the securities
selected by the Board of Directors of the Company; provided, however, that if on
any such date the securities are not listed or admitted to trading on a national
securities exchange or traded in the over-the-counter market, the closing price
per share of such securities on such date shall mean the fair value per share of
securities on such date as determined in good faith by the Board of Directors of
the Company, after consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership, association, group
(as such term is used in Rule 13d-5 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement), corporation or other
entity.
"Redemption Price" shall mean an amount (calculated to the nearest one
one-hundredth of a cent) equal to $0.01 per Right.
"Redemption Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 5.1 hereof.
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"Separation Time" shall mean the close of business on the earlier of (i)
the tenth day (or such later date as the Board of Directors of the Company may
from time to time fix by resolution adopted prior to the Separation Time that
would otherwise have occurred) after the date on which any Person (other than
the Company, a majority-owned Subsidiary of the Company or an employee stock
ownership or other employee benefit plan of the Company or a majority-owned
Subsidiary of the Company) commences a tender or exchange offer which, if
consummated, would result in such Person's becoming an Acquiring Person and (ii)
the Flip-in Date; provided, that if the foregoing results in the Separation Time
being prior to the Record Time, the Separation Time shall be the Record Time,
and provided further, that if any tender or exchange offer referred to in clause
(i) of this definition is cancelled, terminated or otherwise withdrawn prior to
the Separation Time, such offer shall be deemed, for purposes of this
definition, never to have been made.
"Stock Acquisition Date" shall mean the first date of public announcement
by the Company (by any means) or by an Acquiring Person (by means of filing a
Schedule 13D under the Securities Exchange Act of 1934 (or any comparable or
successor report or schedule) or an amendment thereto) that an Acquiring Person
has become such.
"Subsidiary" of any specified Person shall mean any corporation or other
entity of which a majority of the
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voting power of the equity securities or a majority of the equity interest is
Beneficially Owned directly or indirectly, by such Person.
"Trading Day", when used with respect to any securities, shall mean a day
on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a Business Day.
Article II--The Rights
2.1 Summary of Rights. As soon as practicable after the Record Time, the
Company will mail a letter to shareholders summarizing the terms of the Rights
to each holder of record of Common Stock as of the Record Time, at such holder's
address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common Stock
issued after the Record Time but prior to the Separation Time shall evidence one
Right for each share of Common Stock represented thereby and
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shall have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Shareholder Protection Rights
Agreement, dated as of February 20, 1990 (as such may be amended from time
to time, the "Rights Agreement"), between International Flavors &
Fragrances Inc. (the "Company") and The Bank of New York, as Rights Agent,
the terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may be exchanged for shares of Common Stock or
other securities or assets of the Company, may expire, may become void (if
they are "Beneficially Owned" by an "Acquiring Person" or an "Affiliate" or
"Associate" thereof, as such terms are defined in the Rights Agreement, or
by any transferee of any of the foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. The
Company will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge within five days
after the receipt of a written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Riqhts. (a) Subject to adjustment as
herein set forth, each Right will entitle the holder thereof, after the
Separation Time, to purchase, for the Exercise Price, one share of Common Stock.
(b) Until the Separation Time, (i) no Right may be exercised and (ii) each
Right will be evidenced by the
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certificate for the associated share of Common Stock (together, in the case of
certificates issued prior to the Record Time, with the letter mailed to the
record holder thereof pursuant to Section 2.1) and will be transferable only
together with, and will be transferred by a transfer (whether with or without
such letter) of, such associated share. Notwithstanding any other provision of
this Agreement, any Rights held by the Company or any of its Subsidiaries, other
than in a fiduciary capacity, shall be void.
(c) After the Separation Time and prior to the Expiration Time, the Rights
(i) may be exercised and (ii) may be transferred independent of the Common
Stock. Promptly following the Separation Time, and following receipt of notice
of the Separation Time from the Company, the Rights Agent will, at the
Company's expense, mail to each holder of record of Common Stock as of the
Separation Time, at such holder's address as shown by the records of the Company
(the Company hereby agreeing to furnish copies of such records to the Rights
Agent for this purpose), (x) a certificate (a "Rights Certificate") in
substantially the form of Exhibit A hereto appropriately completed, representing
the number of Rights held by such holder at the Separation Time, in a machine
printable format, and having 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
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with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which the
Rights may from time to time be listed or traded, or to conform to usage, and
(y) a disclosure statement describing the Rights; provided, however, that the
Company shall have no obligation to distribute Rights Certificates to any
Acquiring Person or Affiliate or Associate of an Acquiring Person.
(d) Subject to Sections 2.3 and 5.10, Rights may be exercised on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
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(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d) above, and subject to
Section 5.10, the Rights Agent will thereupon promptly (i)(A) requisition, as
transfer agent or to the transfer agent of the Common Stock, stock certificates
evidencing such number of shares or other securities to be purchased (the
Company hereby irrevocably authorizing the Rights Agent, as transfer agent, and
any other transfer agents, to comply with all such requisitions) and (B) if the
Company elects pursuant to Section 5.5 hereof not to issue certificates
representing fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 hereof and (ii) after receipt
of such certificates, depositary receipts and/or cash, deliver the same to or
upon the order of the registered holder of such Rights Certificate, registered
(in the case of certificates or depositary receipts) in such name or names as
may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights
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Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) cause to be kept
available until the Expiration Time out of its authorized and unissued shares of
capital stock a number of shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Rights; (ii) take all such action
as may be necessary to ensure that all shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Exercise Price), be duly and validly authorized, executed, issued
and delivered and fully paid and nonassessable; (iii) take all such action as
may be necessary to comply with any applicable requirements of the Securities
Act of 1933 or the Securities Exchange Act of 1934, and the rules and
regulations thereunder, and any other applicable law, rule or regulation, in
connection with the issuance of any shares upon exercise of Rights; (iv) use its
best efforts to cause all shares issued upon exercise of Rights to be listed on
a national securities exchange upon issuance; and (v) pay when due and payable
any and all federal and state transfer taxes and charges which may be payable in
respect of the original issuance or delivery of the Rights Certificates or of
any shares issued upon the exercise of Rights, provided that the Company shall
not be required to pay any transfer tax or charge which may be
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payable in respect of any transfer involved in the transfer or delivery of
Rights Certificates or the issuance or delivery of certificates for shares in a
name other than that of the holder of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event the
Company shall at any time after the Record Time and prior to the Separation Time
(i) declare or pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock, (x) the Exercise Price in
effect after such adjustment will be equal to the Exercise Price in effect
immediately prior to such adjustment divided by the number of shares of Common
Stock (the "Expansion Factor") that a holder of one share of Common Stock
immediately prior to such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior to such adjustment
will become that number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be distributed among the shares of
Common Stock with respect to which the original Rights were associated (if they
remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment
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made pursuant to this paragraph shall be made as of the payment or effective
date for the applicable dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and prior
to the Separation Time issue any shares of Common Stock otherwise than in a
transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share.
(b) In the event the Company shall at any time after the the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Stock (other than pursuant to a
regular periodic cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapitalization (including any
such transaction involving a merger, consolidation or binding share exchange),
or otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the
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Rights Agent shall amend this Agreement as necessary to provide for such
adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this Section 2.4
shall be calculated to the nearest cent. Whenever an adjustment to the Exercise
Price is made pursuant to this Section 2.4, the Company shall (i) promptly
prepare a certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, (ii) promptly file with the Rights Agent
and with each transfer agent for the Common Stock a copy of such certificate and
(iii) mail a brief summary thereof to each holder of Rights.
(d) Irrespective of any adjustment or change in the securities purchasable
upon exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the securities so purchasable which were
expressed in the initial Rights Certificates issued hereunder.
2.5 Date on Which Exercise is Effective. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other
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governmental charges payable by the exercising holder hereunder) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the stock transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the stock transfer
books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates.
(a) The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Time, the Company will
notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for countersignature,
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and the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose until manually countersigned
by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After the
Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon surrender
for registration of transfer or exchange of any Rights Certificate, and subject
to the provisions of Section 2.7(c) below, the Company will execute, and the
Rights Agent will countersign and deliver, in the name of the holder or the
designated transferee or
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transferees, as required pursuant to the holder's instructions, one or more new
Rights Certificates evidencing the same aggregate number of Rights as did the
Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b) hereof, all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment by the
holders of Rights of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto.
(d) The Company shall not be required to register the transfer or exchange
of any Rights after the Rights have been redeemed under Section 5.1 hereof or
become void pursuant to Section 3.1(b) hereof.
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2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If any
mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, the Company shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so
surrendered.
(b) If there shall be delivered to the Company and the Rights Agent prior
to the Expiration Time (i) evidence to their satisfaction of the destruction,
loss or theft of any Rights Certificate and (ii) such security or indemnity as
may be required by them to save each of them and any of their agents harmless,
then, in the absence of notice to the Company or the Rights Agent that such
Rights Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under this
Section 2.8, the Company may require the payment by the holders of Rights of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other
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expenses (including the fees and expenses of the Rights Agent) connected
therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name such
Rights Certificate (or, prior to the Separation Time, such Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
-23-
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for redemption, registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent may, but shall not be
required to destroy, all cancelled Rights Certificates and deliver a certificate
of destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting the
same consents and agrees with the Company and the Rights Agent and with every
other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
-24-
(b) after the Separation Time, the Rights Certificates will be transferable
only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will under the
circumstances set forth in Section 3.1(b) become void; and
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
Article III -- Adjustments to the Rights in the Event of Certain
Transactions
3.1 Flip-in. (a) In the event that prior to the Expiration Time a Flip-in
Date shall occur, the Company shall take such action as shall be necessary to
ensure and provide that, except as provided below, each Right shall
-25-
constitute the right to purchase from the Company, upon exercise thereof in
accordance with the terms hereof (but subject to Section 5.10 hereof), that
number of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with respect to
the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were Beneficially
Owned on or after the Stock Acquisition Date by an Acquiring Person or an
Affiliate or Associate thereof or by any transferee, direct or indirect, of any
of the foregoing shall become void and any holder of such Rights (including
transferees) shall thereafter have no right to exercise or transfer such Rights
under any provision of this Agreement. If any Rights Certificate is presented
for assignment or exercise and the Person presenting the same will not complete
the certification set forth at the end of the form of assignment or notice of
election to exercise and provide such additional evidence of the identity of the
Beneficial Owner and its Affiliates and Associates (or former Beneficial Owners
and their Affiliates
-26-
and Associates) as the Company shall reasonably request, then the Company shall
be entitled to conclusively deem the Beneficial Owner thereof to be an Acquiring
Person or an Affiliate or Associate thereof or a transferee of any of the
foregoing and accordingly will deem the Rights evidenced thereby to be void and
not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any time
after a Flip-in Date and prior to the time that an Acquiring Person becomes the
Beneficial Owner of more than 50% of the outstanding shares of Common Stock,
elect to exchange all (but not less than all) the then outstanding Rights (which
shall not include Rights that have become void pursuant to the provisions of
Section 3.1(b)) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted in order to protect the interests
of holders of Rights generally in the event that after the Separation Time an
event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Common Stock (such exchange ratio,
as adjusted from time to time, being hereinafter referred to as the "Exchange
Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right will
-27-
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the Rights outstanding
immediately prior thereto by mailing such notice in accordance with Section 5.9.
(d) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock of the Company to permit the
exercise or exchange in full of the Rights in accordance with Section 3.1(a) or
(c), the Company shall either (i) call a meeting of shareholders seeking
approval to cause sufficient additional shares to be authorized (provided that
if such approval is not obtained the Company will take the action specified in
clause (ii) of this sentence) or (ii) take such action as shall be necessary to
ensure and provide, to the extent permitted by applicable law and any agreements
or instruments in effect on the Stock Acquisition Date to which it is a party,
that each Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a fair value equal
to twice the Exercise Price, or
-28-
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall not
enter into any agreement with an Acquiring Person with respect to, consummate or
permit to occur any Flip-over Transaction or Event unless and until it shall
have entered into a supplemental agreement with the Person engaging in such
Flip-over Transaction or Event (the "Flip-over Entity"), for the benefit of the
holders of the Rights, providing that, upon consummation or occurrence of the
Flip-over Transaction or Event (i) each Right shall thereafter constitute the
right to purchase from the Flip-over Entity, upon exercise thereof in accordance
with the
-29-
terms hereof, that number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-over Stock) and (ii) the Flip-over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments which would eliminate or otherwise diminish in any respect the
benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
-30-
Article IV -- The Rights Agent
4.1 General. (a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent such compensation as shall be agreed to in writing between the
Company and the Rights Agent for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and expenses 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, damage, claim, liability, or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability. The
provisions of this Section shall survive the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any certificate for securities
purchasable upon exercise of Rights, Rights
-31-
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, instruction, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed and executed by the
proper person or persons and, where necessary, to be verified or acknowledged.
4.2 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 is 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 the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the
-32-
Rights Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights 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 Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at such
time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its selection (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
-33-
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 be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by a person believed by the Rights Agent to be the
Chairman of the Board, the President or any Vice President and by the Treasurer
or any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent 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
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and
-34-
recitals are and will be deemed to have been made by the Company only.
(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
authorization, execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any certificate for securities purchasable upon
exercise of Rights or Rights Certificate (except its countersignature thereof);
nor will it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor will it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment
required under the provisions of Section 2.4, 3.1 or 3.2 hereof or responsible
for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after the Rights Agent's actual receipt of the
certificate contemplated by Section 2.4 describing 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 securities purchasable upon exercise
of Rights or any Rights or as to whether any securities purchasable upon
exercise of Rights will, when issued, be duly and validly authorized,
-35-
executed, issued and delivered and 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
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action shall
be taken or such omission shall be effective. The Rights Agent shall not be
liable for any action taken by, or omission of,
-36-
the Rights Agent in accordance with a proposal included in such app1ication on
or after the date specified in such application (which date shall not be less
than five Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in Common Stock, Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company
-37-
resulting from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the Form of
Assignment or Form of Election to Exercise included as part of Exhibit A hereto,
as the case may be, has not been executed, the Rights Agent shall not take any
further action with respect to such requested transfer or exercise without first
consulting with the Company.
(1) In addition to the foregoing, the Rights Agent shall be protected and
shall incur no liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement if such acts or
omissions are in reliance upon (i) the proper execution of the certification
concerning beneficial ownership appended to the Form of Assignment and the Form
of
-38-
Election to Exercise unless the Rights Agent shall have actual knowledge that,
as executed, such certification is untrue, or (ii) the non-execution of such
certification including, without limitation, any refusal to honor any otherwise
permissible assignment or election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice of
any event or ownership which would prohibit the exercise or transfer of the
Rights Certificates.
4.4 Change of Rights Agent. The Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days' notice (or such lesser notice
as is acceptable to the Company) in writing mailed to the Company and, at the
Company's expense, to each transfer agent of Common Stock by registered or
certified mail, and to the holders of the Rights in accordance with Section 5.9.
The Company may remove the Rights Agent upon 30 days' notice in writing, mailed
to the Rights Agent and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Rights in accordance with Section
5.9. If the Rights Agent should resign or be removed or otherwise become
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
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning
-39-
or incapacitated Rights Agent or by the holder of any Rights (which holder
shall, with such notice, submit such holder's Rights Certificate for inspection
by the Company), then the Company shall become the Rights Agent and the holder
of any Rights may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of New York, in
good standing, having its principal office in the State of New York, which is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000. 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 shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common
-40-
Stock, and mail a notice thereof in writing to the holders of the Rights.
Failure to give any notice provided for in this Section 4.4, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Article V - Miscellaneous
5.1 Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to the Flip-in Date, elect to redeem all (but not less
than all) the then outstanding Rights at the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights (or, if the resolution of the Board of Directors
electing to redeem the Rights states that the redemption will not be effective
until the occurrence of a specified future time or event, upon the occurrence of
such future time or event), without any further action and without any notice,
the right to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash. Promptly after
the Rights are redeemed, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by mailing such
notice in accordance with Section 5.9.
-41-
5.2 Expiration. No Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1(c) or 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement.
5.4 Supplements and Amendments. The Company and the Rights Agent may from
time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) in any respect prior to the Flip-in Date (other than to
change the Redemption Price or the Expiration Time, except as contemplated
elsewhere herein), (ii) to make any changes following the close of business on
the Flip-in Date which the Company may deem necessary or desirable and which
shall not materially adversely affect the interests of the holders of Rights or
(iii) in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be inconsistent with any other provisions herein or
otherwise defective. The Rights Agent will duly execute and deliver any
supplement or amendment hereto reguested by the
-42-
Company which satisfies the terms of the preceding sentence; provided, however,
that the Rights Agent shall not be required to execute any supplement or
amendment hereto which adversely alters the Rights Agent's rights or duties.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise of Rights, the Company shall, in
lieu thereof, (a) evidence such fractional shares by depositary receipts issued
pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) pay to the
registered holder of such Rights the same fraction of the Market Price
(determined as of the date of exercise) of one share of the stock issuable upon
such exercise on the day of exercise.
5.6 Rights of Action. Subject to the terms of this Agreement, rights of
action in respect of this Agreement, other than rights of action vested solely
in the Rights Agent, are vested in the respective holders of the Rights; and any
holder of any Rights, without the consent of the Rights Agent or of the holder
of any other Rights, may, on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights, enforce, and may institute
and maintain any suit, action or proceed-
-43- -
ing against the Company to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the manner provided in such
holder's Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and 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.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as such, of any
Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other securities which may at any time be issuable
on the exercise of such Rights, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights
-44-
shall have been exercised in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after the
Separation Time and prior to the Expiration Time (i) to effect or permit (in
cases where the Company's permission is required) occurrence of any Flip-in Date
or Flip-over Transaction or Event or (ii) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right and to the Rights Agent, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the Flip-in Date
or the date on which such Flip-over Transaction or Event, liquidation,
dissolution, or winding up is to take place, and such notice shall be so given
at least 20 Business Days prior to the date of the taking of such proposed
action.
5.9 Notices. Notices or demands authorized or required by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights to or on the
Company shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
-45-
International Flavors & Fragrances Inc.
000 Xxxx 00xx Xx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
The Bank of New York
00 Xxxxxxxxxx Xxxxxx
Equity Tender and Xxxxxxxx Xxxxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Small
Assistant Vice President
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
-46-
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action need be taken pursuant to Section
3.1(c) or 3.1(e) or to comply with federal or state securities laws, the Company
may suspend the exercisability of the Rights for a period of up to ninety (90)
days following the date of the occurrence of the Separation Time or the Flip-in
Date in order to take such action or comply with such laws. In the event of any
such suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability of the Rights has been temporarily
suspended and shall simultaneously so notify the Rights Agent.
5.11 Costs of Enforcement. The Company agrees that if the Company or any
other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other
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than the Company, the Rights Agent and the holders of the Rights any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
holders of the Rights.
5.14 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.15 Governing Law. This Agreement and each Right issued hereunder shall be
deemed to be a contract made under the laws of the State of New York and for all
purposes shall be governed by and construed in accordance with the laws of such
state applicable to contracts made and to be performed entirely within such
state.
5.16 Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.17 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable
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the remaining terms and provisions hereof or the application of such term or
provision to circumstances other than those as to which it is held invalid or
unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By /S/ XXXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
THE BANK OF NEW YORK,
as Rights Agent
By /S/ XXXX XXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxx
Title: Assistant Vice President
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EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE,
AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS
OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING
WILL BE VOID.
Rights Certificate
INTERNATIONAL FLAVORS & FRAGRANCES INC.
This certifies that _____________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Protection Rights Agreement, dated as of February
20, 1990 (as such may be amended from time to time, the "Rights Agreement"),
between International Flavors & Fragrances Inc., a New York corporation (the
"Company"), and The Bank of New York, a New York banking corporation, as Rights
Agent (the "Rights Agent", which term shall include any successor Rights Agent
under the Rights Agreement), to purchase from the Company at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on February 20, 2000, one fully paid share of Common
Stock, par value $0.12 1/2 per share (the "Common Stock") of the Company
(subject to
adjustment as provided in the Rights Agreement) at the Exercise Price referred
to below, upon presentation and surrender of this Rights Certificate with the
Form of Election to Exercise duly executed at the designated office of the
Rights Agent in The City of New York. The Exercise Price shall initially be
$200.00 per Right and shall be subject to adjustment in certain events as
provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Common Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
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This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced by
this Certificate may be (a) redeemed by the Company under certain circumstances,
at its option, at a redemption price of $0.01 per Right or (b) exchanged by the
Company under certain circumstances, at its option, for one share of Common
Stock per Right (or, in certain cases, other securities or assets of the
Company), subject in each case to adjustment in certain events as provided in
the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of any securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of
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the rights of a shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Date: ___________
INTERNATIONAL FLAVORS & FRAGRANCES INC.
ATTEST:
___________________________ By_____________________________________
Secretary
Countersigned:
THE BANK OF NEW YORK, as Rights Agent
By _______________________________
Authorized Signatory
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