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RIGHTS AGREEMENT
by and between
SUPERVALU INC.
and
NORWEST BANK MINNESOTA, N.A.
as Rights Agent
Dated April 12, 2000
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions...........................................1
Section 2. Appointment of Rights Agent...................................5
Section 3. Issuance of Rights Certificates...............................5
Section 4. Form of Rights Certificates...................................8
Section 5. Countersignature and Registration.............................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates.........................................9
Section 7. Exercise of Rights; Exercise Price; Expiration Date
of Rights..............................10
Section 8. Cancellation and Destruction of Rights Certificates..........12
Section 9. Reservation and Availability of Shares of Preferred Stock....12
Section 10. Preferred Stock Record Date..................................13
Section 11. Adjustment of Exercise Price or Number of Shares.............13
Section 12. Certification of Adjusted Exercise Price or
Number of Shares...........................................17
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...........................................17
Section 14. Fractional Rights and Fractional Shares......................20
Section 15. Rights of Action.............................................21
Section 16. Agreement of Right Holders...................................21
Section 17. Rights Certificate Holder Not Deemed a Stockholder...........22
Section 18. Concerning the Rights Agent..................................22
Section 19. Merger or Consolidation of, or Change in Name of,
the Rights Agent...........................................23
Section 20. Duties of Rights Agent.......................................23
Section 21. Change of Rights Agent.......................................25
Section 22. Issuance of New Rights Certificates..........................26
Section 23. Redemption...................................................26
Section 24. Notice of Proposed Actions...................................27
Section 25. Notices......................................................28
Section 26. Supplements and Amendments...................................28
Section 27. Exchange.....................................................29
Section 28. Successors...................................................30
Section 29. Benefits of this Rights Agreement............................30
Section 30. Delaware Contract............................................30
Section 31. Counterparts.................................................30
Section 32. Descriptive Headings.........................................30
Section 33. Severability.................................................30
Section 34. Determinations And Actions By The Board Of Directors, Etc....30
Exhibit A Summary of Rights
Exhibit B Form of Rights Certificate
Exhibit C Form of Certificate of Designations Relating to
the Terms of the Series A Junior Participating
Preferred Stock
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RIGHTS AGREEMENT
Agreement, dated as of April 12, 2000, by and between SUPERVALU INC., a
Delaware corporation (the "Company"), and Norwest Bank Minnesota, N.A. (the
"Rights Agent") (the "Rights Agreement").
W I T N E S S E T H:
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WHEREAS, on April 12, 2000, the Board of Directors of the Company
authorized the issuance of, and declared a dividend payable in, one right (a
"Right") for each share of Common Stock, $1.00 par value per share, of the
Company outstanding as of the close of business on April 24, 2000 (the "Record
Date"), each such Right representing the right to purchase one one-thousandth of
a share of Series A Junior Participating Preferred Stock of the Company (the
"Preferred Stock") having the rights and preferences set forth in the
Certificate of Designations attached hereto as Exhibit C, containing the
resolutions adopted by the Board of Directors on April 12, 2000, upon the terms
and subject to the conditions hereinafter set forth; and
WHEREAS, the Board of Directors of the Company further authorized the
issuance of one Right (subject to adjustment) with respect to each share of
Common Stock which may be issued between the Record Date and the earlier to
occur of the Distribution Date or the Expiration Date (as such terms are
hereinafter defined);
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 Rights Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, is the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Voting Stock (as such term is
hereinafter defined) of the Company then outstanding; provided, that, an
Acquiring Person shall not include (i) an Exempt Person (as such term is
hereinafter defined) or (ii) any Person, together with all Affiliates and
Associates of such Person, who or which would be an Acquiring Person solely
by reason of (A) being the Beneficial Owner of shares of Voting Stock of
the Company, the Beneficial Ownership of which was acquired by such Person
(or his or its predecessor through merger, consolidation, amalgamation or
other similar legal succession) pursuant to any action or transaction or
series of related actions or transactions approved by the Board of
Directors before such Person otherwise became an Acquiring Person or (B) a
reduction in the number of outstanding shares of Voting Stock of the
Company pursuant to a transaction or a series of related transactions
approved by the Board of Directors of the Company; provided, further, that
in the event such Person described in this clause (ii) does not become an
Acquiring Person by reason of subclause (A) or (B) of this clause (ii),
such Person nonetheless shall become an Acquiring Person in the event such
Person thereafter acquires Beneficial Ownership of an additional 1% or more
of the Voting Stock of the Company then outstanding, unless the acquisition
of such additional Voting Stock would not result in such Person becoming an
Acquiring Person by reason of subclause (A) or (B) of this clause (ii).
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person" became the Beneficial Owner of a number of shares of Common Stock
such that the Person would otherwise qualify as an "Acquiring Person"
inadvertently (including, without limitation, because (A) such Person was
unaware that it Beneficially Owned a percentage of Common Stock that would
otherwise cause such Person to be an "Acquiring Person" or (B) such Person
was unaware of the extent of its Beneficial ownership under this Rights
Agreement) and without any intention of changing or influencing control of
the Company, then such Person shall not be deemed to be or have become an
"Acquiring Person" for any purposes of this Rights Agreement unless and
until such Person shall have failed to divest itself, as soon as
practicable (as determined, in good faith, by the Board of Directors of the
Company), of Beneficial Ownership of a sufficient number of shares of
Common Stock so that such Person would no longer otherwise qualify as an
"Acquiring Person."
(b) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), as in effect on the date of this
Rights Agreement.
(c) "Associate" of a Person (as such term is hereinafter defined)
shall mean (i) with respect to a Company, any officer or director thereof
or of any Subsidiary (as such term is hereinafter defined) thereof, or any
Beneficial Owner (as such term is hereinafter defined) of 10% or more of
any class of equity security thereof, (ii) with respect to an association,
joint venture or other unincorporated organization, any officer or director
thereof or of a Subsidiary thereof or any Beneficial Owner of 10% or more
ownership interest therein, (iii) with respect to a partnership, any
general partner thereof or any limited partner thereof who is, directly or
indirectly, the Beneficial Owner of a 10% or greater ownership interest
therein, (iv) with respect to a limited liability company, any officer,
director or manager thereof or of a Subsidiary thereof or any member
thereof who is, directly or indirectly, the Beneficial Owner of a 10% or
greater ownership interest therein, (v) with respect to a business trust,
any officer or trustee thereof or of any Subsidiary thereof, (vi) with
respect to any other trust or an estate, any trustee, executor or similar
fiduciary or any Person who has a 10% or greater interest as a beneficiary
in the income from or principal of such trust or estate, (vii) with respect
to a natural person, any relative or spouse of such person, or any relative
of such spouse, who has the same home as such person, and (viii) any
Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities (and correlative terms shall have
correlative meanings):
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange
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Act and Regulations 13D and 13G thereunder, in each case as in effect
on the date hereof; or
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or the
fulfillment of a condition or both) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, other rights (other
than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "Beneficially Own," securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (B) the right to vote, alone or
in concert with others, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy or consent given in response to a proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (2) is not at that time
reportable by such Person on a Schedule 13D report under the Exchange
Act (or any comparable or successor report), other than by reference
to a proxy or consent solicitation being conducted by such Person; or
(iii) which are Beneficially Owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except as described in the proviso in
clause (B) of subparagraph (ii) of this paragraph (d)) or disposing of
any securities of the Company; provided, however, that for purposes of
determining Beneficial Ownership of securities under this Rights
Agreement, officers and directors of the Company solely by reason of
their status as such shall not constitute a group (notwithstanding
that they may be Associates of one another or may be deemed to
constitute a group for purposes of Section 13(d) of the Exchange Act)
and shall not be deemed to own shares owned by another officer or
director of the Company.
Notwithstanding anything in this paragraph (d) to the contrary, a
Person engaged in the business of underwriting securities shall not be
deemed the "Beneficial Owner" of, or to "Beneficially Own," any securities
acquired in good faith in a firm commitment underwriting, until the
expiration of forty days after the date of such acquisition.
(e) "Book-Entry" shall mean an uncertificated book-entry for the
Company's Common Stock.
(f) "Business Day" shall mean any day other than a Saturday, Sunday,
or day on which banking institutions in the States of New York or Minnesota
or the state in which the office of the Rights Agent is located are
authorized or obligated by law or executive order to close.
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(g) "Close of Business" on any given date shall mean 5:00 p.m., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
(h) "Common Stock," when used with reference to the Company, shall
mean the common stock, presently $1.00 par value, of the Company. "Common
Stock," when used with reference to any Person other than the Company which
shall be organized in corporate form, shall mean the capital stock or other
equity security with the greatest voting power of such Person or, if such
other Person is a subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person. "Common Stock," when used
with reference to any Person other than the Company which shall not be
organized in corporate form, shall mean units of beneficial interest which
shall represent the right to participate in profits, losses, deductions and
credits of such Person and which shall be entitled to exercise the greatest
voting power of such Person.
(i) "Distribution Date" shall have the meaning set forth in Section
3(b) hereof.
(j) "Exchange Act" shall have the meaning set forth in Section 1(b)
hereof.
(k) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of
the Company or (iii) any employee benefit plan or employee stock plan of
the Company or any Subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Common Stock for or pursuant
to the terms of any such plan.
(l) "Exercise Price" shall have the meaning set forth in Sections 4
and 7(b) hereof.
(m) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(n) "Fair Market Value" of any property shall mean the fair market
value of such property as determined in accordance with Section 11(b)
hereof.
(o) "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System or any successor thereto or other
comparable quotation system.
(p) "Person" shall mean any individual, firm, Company or other entity.
(q) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(r) "Record Date" shall have the meaning set forth in the first
Recital.
(s) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(t) "Rights Certificate" shall have the meaning set forth in Section
3(d) hereof.
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(u) "Stock Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) or such earlier date as a majority of
the Board of Directors shall become aware of the existence of an Acquiring
Person.
(v) "Subsidiary" of a Person shall mean any Company or other entity of
which securities or other ownership interests having voting power
sufficient to elect a majority of the Board of Directors or other persons
performing similar functions are Beneficially Owned, directly or
indirectly, by such Person or by any Company or other entity that is
otherwise controlled by such Person.
(w) "Summary of Rights" shall have the meaning set forth in Section
3(a) hereof.
(x) "Trading Day" shall have the meaning set forth in Section 11(b)
hereof.
(y) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or
regulatory authority in respect of any transfer of any security, instrument
or right, including Rights, shares of Common Stock and shares of Preferred
Stock.
(z) "Voting Stock" shall mean (i) the Common Stock of the Company and
(ii) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with
the Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or
winding up. For purposes of this Rights Agreement, Voting Stock shall
include securities of the type referred to in clauses (i) and (ii) above
that trade on a "when issued" basis on a national securities exchange or on
the NASDAQ. For purposes of this Rights Agreement, a stated percentage of
the Voting Stock shall mean a number of shares of the Voting Stock as shall
equal in voting power that stated percentage of the total voting power of
the then outstanding shares of Voting Stock in the election of a majority
of the Board of Directors or in respect of any merger, consolidation, sale
of all or substantially all of the Company's assets, liquidation,
dissolution or winding up.
Any determination required to be made by the Board of Directors of the
Company for purposes of applying the definitions contained in this Section 1
shall be made by the Board of Directors in its good faith judgment, and such
determination shall be binding on the Rights Agent and the holders of the
Rights.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights 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.
Section 3. Issuance of Rights Certificates.
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(a) On the Record Date (or as soon as practicable thereafter), the
Company or the Rights Agent shall send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit A (the "Summary of
Rights"), by first class mail, postage prepaid, to each record holder of
the Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
(b) Until the Close of Business on the day which is the earlier of (i)
the tenth day after the Stock Acquisition Date or such earlier or later
date (not beyond the thirtieth day after the Stock Acquisition Date) as the
Board of Directors may from time to time fix by resolution adopted prior to
the Distribution Date that otherwise would have occurred or (ii) the tenth
business day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an
Exempt Person) of, or the first public announcement of the intent of any
Person (other than an Exempt Person) to commence, a tender or exchange
offer upon the successful consummation of which such Person, together with
its Affiliates and Associates, would be the Beneficial Owner of 15% or more
of the then outstanding shares of Voting Stock of the Company (irrespective
of whether any shares are actually purchased pursuant to any such offer)
(the earlier of such dates being herein referred to as the "Distribution
Date"), (x) the Rights shall be evidenced by the Book-Entries, or
certificates for, Common Stock registered in the name of the holders of
Common Stock (together with, in the case of Book-Entries representing, or
the certificates for, Common Stock outstanding as of the Record Date, the
Summary of Rights) and not by separate Book-Entries or Rights Certificates
and the record holders of the Common Stock represented by such Book-Entries
or certificates shall be the record holders of the Rights represented
thereby and (y) each Right shall be transferable only simultaneously and
together with the transfer of a share of Common Stock (subject to
adjustment as hereinafter provided). Until the Distribution Date (or, if
earlier, the Expiration Date), transfer on the Company's Direct
Registration System of any Common Stock represented by a Book-Entry or the
surrender for transfer of any certificate for Common Stock shall constitute
the surrender for transfer of the Right or Rights associated with the
Common Stock evidenced thereby, whether or not accompanied by a copy of the
Summary of Rights.
(c) Rights shall be issued in respect of all shares of Common Stock
that become outstanding after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date and, in certain circumstances
provided in Section 22 hereof, may be issued in respect of shares of Common
Stock that become outstanding after the Distribution Date. Certificates of
Common Stock issued (including, without limitation, certificates issued
upon original issuance, dispensation from the Company's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to
the earliest of the Distribution Date or the Expiration Date (or, in
certain circumstances as provided in Section 22 hereof, after the
Distribution Date) shall have impressed, printed, written or stamped
thereon or otherwise affixed thereto the following legend:
This certificate also evidences and entitles the holder hereof to the
same number of Rights (subject to adjustment) as the number of shares
of Common Stock represented by this certificate, such
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Rights being on the terms provided under the Rights Agreement between
SUPERVALU INC. (the "Company") and Norwest Bank Minnesota, N.A. (the
"Rights Agent"), dated as of April 12, 2000, as it may be amended from
time to time (the "Rights Agreement"), the terms of which are
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 shall
be evidenced by separate certificates and shall no longer be evidenced
by this certificate. The Company shall mail to the registered holder
of this certificate a copy of the Rights Agreement without charge
within five days after receipt of a written request therefor. UNDER
CERTAIN CIRCUMSTANCES AS PROVIDED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS
OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE
NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
(d) As soon as practicable after the Distribution Date, the Company
will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if
requested, send), by first class mail, postage prepaid, to each record
holder of the Common Stock as of the Close of Business on the Distribution
Date, as shown by the records of the Company, at the address of such holder
shown on such records, a certificate in the form provided by Section 4
hereof (a "Rights Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so held. As
of and after the Distribution Date, the Rights shall be evidenced solely by
such Rights Certificates and may be transferred by the transfer of the
Rights Certificate as permitted hereby, separately and apart from any
transfer of one or more shares of Common Stock.
(e) In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration
Date, the Company (i) shall, with respect to shares of Common Stock so
issued or sold (x) pursuant to the exercise of stock options or under any
employee plan or arrangement or (y) upon the exercise, conversion or
exchange of other securities issued by the Company prior to the
Distribution Date and (ii) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided that no such Rights Certificate shall
be issued if, and to the extent that, (i) the Company shall be advised by
counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Rights
Certificate would be issued or (ii) appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
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Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
shares, certificate and assignment to be printed on the reverse thereof),
when, as and if issued, shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon 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 stock exchange on
which the Common Stock or the Rights may from time to time be listed or as
the Company may deem appropriate to conform to usage or otherwise and as
are not inconsistent with the provisions of this Rights Agreement. Subject
to the provisions of Section 22 hereof, Rights Certificates evidencing
Rights whenever issued, (i) shall be dated as of the date of issuance of
the Rights they represent and (ii) subject to adjustment from time to time
as provided herein, on their face shall entitle the holders thereof to
purchase such number of shares (including fractional shares which are
integral multiples of one one-thousandth of a share) of Preferred Stock as
shall be set forth therein at the price payable upon exercise of a Right
provided by Section 7(b) hereof as the same may from time to time be
adjusted as provided herein (the "Exercise Price").
(b) Notwithstanding any other provision of this Rights Agreement, any
Rights Certificate that represents Rights Beneficially Owned by an
Acquiring Person or any Affiliate or Associate thereof or any other Person
whose Rights shall become void pursuant to Section 7(e) shall have
impressed on, printed on, written on or otherwise affixed to it (if the
Company or the Rights Agent has knowledge that such Person is an Acquiring
Person or an Associate or Affiliate or a nominee of any of the foregoing)
the following legend:
The Beneficial Owner of the Rights represented by this Rights
Certificate is an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person. Accordingly, this Rights Certificate and the
Rights represented hereby shall become void in the circumstances
specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) Each Rights Certificate shall be executed on behalf of the Company
by its Chairman of the Board, any President or any Senior or Executive Vice
President, either manually or by facsimile signature, and have affixed
thereto the Company's seal or a facsimile thereof which shall be attested
to by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. Each Rights Certificate shall be
countersigned by the Rights Agent either manually or by facsimile signature
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any Rights Certificate shall
cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery of the certificate by the Company,
such Rights Certificate, nevertheless, may be countersigned by the Rights
Agent and issued and delivered with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such
officer of the
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Company. Any Rights Certificate may be signed on behalf of the Company by
any person who, on the date of the execution of such Rights Certificate,
shall be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or one or more offices designated
as the appropriate place for the surrender of Rights Certificates upon
exercise or transfer, and in such other locations as may be required by
law, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its
face by each of the Rights Certificates and the date of each of the Rights
Certificates and any Rights Certificates that have a legend printed thereon
pursuant to Section 4(b).
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14(b) hereof,
at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the Expiration Date, any Rights
Certificate, may be (i) transferred or (ii) split up, combined or exchanged
for one or more other Rights Certificates, entitling the registered holder
to purchase a like number of shares of Preferred Stock as the Rights
Certificate or Rights Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer any Rights Certificate
shall surrender the Rights Certificate at the office of the Rights Agent
designated for the surrender of Rights Certificates with the form of
certificate and assignment on the reverse side thereof duly endorsed (or,
enclosed with such Rights Certificate, a written instrument of transfer in
a form satisfactory to the Company and the Rights Agent), duly executed by
the registered holder thereof or his attorney duly authorized in writing,
and with such signature duly guaranteed. Any registered holder desiring to
split up, combine or exchange any Rights Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate to be split up, combined or exchanged at the office of
the Rights Agent. Thereupon, the Rights Agent shall countersign and deliver
to the person entitled thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested. The Company may require payment of a
sum sufficient to cover any Transfer Tax that may be imposed in connection
with any transfer, split up, combination or exchange of any Rights
Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f) and 14(b) hereof,
upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them and, if requested by
the Company, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, or upon surrender to the Rights
Agent and cancellation of the Rights Certificate if mutilated, the Company
shall issue and deliver a new Rights Certificate of like tenor to the
Rights Agent for delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
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Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights.
(a) The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth
in Section 7(e) and 23(a) hereof). Except as otherwise provided herein, the
Rights may be exercised, in whole or in part, at any time commencing with
the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and certificate on the reverse side thereof
duly executed (with signatures duly guaranteed), to the Rights Agent at the
principal office of the Rights Agent, in South St. Xxxx, Minnesota,
together with payment of the Exercise Price for each Right exercised,
subject to adjustment as hereinafter provided, at or prior to the Close of
Business on the earlier of (i) April 12, 2010 (or if the Distribution Date
shall have occurred before April 12, 2010, at the Close of Business on the
90th day following the Distribution Date) or (ii) the date on which the
Rights are redeemed as provided in Section 23 hereof (such earlier date
being herein referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $85.00 for each one
one-thousandth (1/1,000) of a share of Preferred Stock issued pursuant to
the exercise of a Right. The Exercise Price and the number of shares of
Preferred Stock or other securities to be acquired upon exercise of a Right
shall be subject to adjustment from time to time as provided in Sections 11
and 13 hereof. The Exercise Price shall be payable in lawful money of the
United States of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Rights
Certificate representing exercisable Rights with the form of election to
purchase duly executed, accompanied by payment by certified check,
cashier's check, bank draft or money order payable to the Company or the
Rights Agent of the Exercise Price for the shares to be purchased and an
amount equal to any applicable Transfer Tax required to be paid by the
holder of the Rights Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall thereupon promptly (i) requisition from any
registrar or transfer agent (as may be appropriate) of the Preferred Stock
of the Company one or more certificates representing the number of shares
of Preferred Stock to be so purchased, and the Company hereby authorizes
and directs such registrar or transfer agent (as may be appropriate) to
comply with all such requests, (ii) as provided in Section 14(b), at the
election of the Company, cause depositary receipts to be issued in lieu of
fractional shares of Preferred Stock, (iii) if the election provided for in
the immediately preceding clause (ii) has not been made, requisition from
the Company the amount of cash to be paid in lieu of the issuance of
fractional shares in accordance with Section 14(b) hereof, (iv) after
receipt of such Preferred Stock certificates and, if applicable, depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (v) when appropriate, after
receipt, promptly deliver such cash to or upon the order of the registered
holder of such Rights Certificate; provided, however, that in the case of a
purchase of securities, other than Preferred Stock, pursuant to Section 13
hereof, the Rights Agent shall promptly take the appropriate actions
corresponding in such case to that referred to in the foregoing clauses (i)
through (v) of this Section 7(c). Notwithstanding the foregoing provisions
of this Section 7(c), the Company may suspend
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the issuance of shares of Preferred Stock upon exercise of a Right for a
reasonable period, not in excess of 120 days, during which the Company
seeks to register under the Securities Act of 1933, as amended (the "Act"),
and any applicable securities law of any other jurisdiction, the shares of
Preferred Stock to be issued pursuant to the Rights; provided, however,
that nothing contained in this Section 7(c) shall relieve the Company of
its obligations under Section 9(c) hereof.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Rights Certificate or his assignee, subject to the provisions of
Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the time (the "Invalidation Time") when any Person
first becomes an Acquiring Person, any Rights that are Beneficially Owned
by (x) such Acquiring Person (or any Associate or Affiliate of such
Acquiring Person), (y) a transferee of such Acquiring Person (or any such
Associate or Affiliate) who becomes a transferee after the Invalidation
Time or (z) a transferee of such Acquiring Person (or any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Invalidation Time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any Person with whom it
has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (II) a transfer which the Board of Directors has
determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this Section 7(e), and
subsequent transferees of the Persons referred to in either clause (y) or
(z) above, shall be void without any further action and any holder of such
Rights shall thereafter have no rights whatsoever with respect to such
Rights under any provision of this Rights Agreement. The Company shall use
all reasonable efforts to ensure that the provisions of this Section 7(e)
are complied with, but shall have no liability to any holder of a Rights
Certificate or any other Person as a result of the Company's failure to
make any determination with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. No Rights Certificate
shall be issued pursuant to Section 3 hereof that represents Rights
Beneficially Owned by an Acquiring Person or any other Person whose Rights
would be void pursuant to the provisions of this Section 7(e) or any
Associate, Affiliate or nominee thereof; no Rights Certificate shall be
issued at any time upon the transfer of any Rights to an Acquiring Person
or any other Person whose Rights would be void pursuant to the provisions
of this Section 7(e) or any Associate, Affiliate or nominee thereof; and
any Rights Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the provisions of
this Section 7(e) shall be canceled.
(f) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate following the
form of election to purchase set forth on the reverse side of the
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Rights Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof or a Person referred
to in clause (y) or (z) of Section 7(e) and such other information as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall cancel
and retire, any Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, and after any retention period required by the Securities and
Exchange Commission, destroy such canceled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred
Stock or out of authorized and issued shares of Preferred Stock held in its
treasury, such number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding
Rights. The Company shall take such action as may be required for it to
comply with the foregoing sentence of this Section 9(a).
(b) The Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance in accordance with this Rights Agreement to
be listed, upon official notice of issuance, upon the principal national
securities exchange, if any, upon which the Common Stock is listed or, if
the principal market for the Common Stock is not on any national securities
exchange, to be eligible for quotation on NASDAQ or any successor thereto
or other comparable quotation system.
(c) The Company covenants and agrees that it will take all such
actions as may be necessary to insure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates, for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid
and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Act, with
respect to the shares of Preferred Stock purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause
such registration
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statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for Preferred Stock, or (B) the Expiration
Date. The Company may temporarily suspend, for a period of time not to
exceed 120 days, the issuance of shares of Preferred Stock upon exercise of
a Right in order to prepare and file a registration statement under the Act
and permit it to become effective. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the securities
or "Blue Sky" laws of the various states in connection with the
exercisability of the Rights. Notwithstanding any provision of this Rights
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement under the Act (if
required) shall have been declared effective.
(e) The Company covenants and agrees that it will pay when due and
payable any and all federal and state Transfer Taxes which may be payable
in respect of the issuance or delivery of the Rights Certificates or of any
shares of Preferred Stock issued or delivered upon the exercise of Rights.
The Company shall not, however, be required to pay any Transfer Tax which
may be payable in respect of any transfer or delivery of a Rights
Certificate to a Person other than, or the issuance or delivery of
certificates for Preferred Stock upon exercise of Rights in a name other
than that of, the registered holder of the Rights Certificate, and the
Company shall not be required to or issue or deliver a Rights Certificate
or certificate for Preferred Stock to a Person other than such registered
holder until any such Transfer Tax shall have been paid (any such Transfer
Tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction
that no such Transfer Tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Stock represented thereby on, and such certificate shall be dated as
of, the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable Transfer
Taxes) was made; provided, however, that, if the date of such surrender and
payment is a date upon which the Preferred Stock 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 as of, the next succeeding
Business Day on which the Preferred Stock transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Exercise Price or Number of Shares. The Exercise
Price and the number of shares of Preferred Stock which may be purchased upon
exercise of a Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
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(a) (i) In the event the Company shall at any time after the date of
this Rights Agreement (A) declare or pay any dividend on Common Stock
payable in shares of Common Stock, (B) subdivide or split the outstanding
shares of Common Stock into a greater number of shares or (C) combine or
consolidate the outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Common Stock,
then and in each such event the number of shares of Preferred Stock
issuable upon the exercise of a Right after the record date for such event
(if one shall have been established or, if not, after the date of such
event) shall be the number of shares of Preferred Stock issuable
immediately prior to such event multiplied by a fraction the numerator of
which is the number of Rights outstanding immediately prior to such event
and the denominator of which is the number of Rights outstanding
immediately after such event and the Exercise Price after such event shall
be the Exercise Price in effect immediately prior to such event multiplied
by such fraction. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) Subject to Section 27 of this Rights Agreement, in the event
that any Person (other than an Exempt Person), alone or together with
its Affiliates and Associates, shall become an Acquiring Person, then,
subject to the last sentence of Section 23(a) and except as otherwise
provided in this Section 11, each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to
receive upon exercise of such Right in accordance with the terms of
this Rights Agreement and payment of the Exercise Price, the greater
of (1) the number of one one-thousandths of a share of Preferred Stock
for which such Right was exercisable immediately prior to the first
occurrence of the event described in this Section 11(a)(ii) or (2)
such number of one one-thousandths of a share of Preferred Stock as
shall equal the result obtained by dividing the Exercise Price by 50%
of the Fair Market Value of one one-thousandth of a share of Preferred
Stock (determined pursuant to Section 11(b) hereof) on the date of
such first occurrence; provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject
to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant
to this Section 11(a)(ii).
(iii) In the event that the Company does not have available
sufficient authorized but unissued Preferred Stock to permit the
adjustments required pursuant to the foregoing subparagraph (i) or the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such actions as may be
necessary to authorize and reserve for issuance such number of
additional shares of Preferred Stock as may from time to time be
required to be issued upon the exercise in full of all Rights from
time to time outstanding and, if necessary, shall use its best efforts
to obtain stockholder approval thereof. In lieu of issuing shares of
Preferred Stock in accordance with the foregoing subparagraphs (i) and
(ii), the Company may, if the Board of Directors determines that such
action is necessary or appropriate and not contrary to the interests
of holders of Rights, elect to issue or pay, upon the exercise of the
Rights, (A) cash, (B) other equity securities of the Company, (C) debt
securities of the Company, (D) other assets or (E) any combination of
the foregoing, in each case, having an aggregate Fair
-14-
Market Value equal to the Fair Market Value of the shares of Preferred
Stock which otherwise would have been issuable pursuant to Section
11(a)(ii), which Fair Market Value shall be determined by an
investment banking firm selected by the Board of Directors. For
purposes of the preceding sentence, the Fair Market Value of the
Preferred Stock shall be as determined pursuant to Section 11(b).
Subject to Section 23 hereof, any such election by the Board of
Directors of the Company must be made and publicly announced within
thirty (30) days after the date on which the event described in
Section 11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair Market Value"
of any share of Preferred Stock, Common Stock or any other stock or any
Right or other security or any other property on any date shall be
determined as provided in this Section 11(b). In the case of a
publicly-traded stock or other security, the Fair Market Value on any date
shall be deemed to be the average of the daily closing prices per share of
such stock or per unit of such other security for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to
such date; provided, however, that in the event that the Fair Market Value
per share of any share of Common Stock is determined during a period which
includes any date that is within 30 Trading Days after (i) the ex-dividend
date for a dividend or distribution on such stock payable in shares of
Common Stock or securities convertible into shares of Common Stock, or (ii)
the effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of such stock, then, and in each
such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Company to take into account ex-dividend or
post-effective date trading. The closing price for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way (in
either case, as reported in the applicable transaction reporting system
with respect to securities listed or admitted to trading on the New York
Stock Exchange), or, if the securities are not listed or admitted to
trading on the New York Stock Exchange, as reported in the applicable
transaction reporting system with respect to securities listed on the
principal national securities exchange on which such security is listed or
admitted to trading; or, if not listed or admitted to trading on any
national securities exchange, the last quoted price (or, if not so quoted,
the average of the high bid and low asked prices) in the over-the-counter
market, as reported by NASDAQ or such other system then in use; or, if no
bids for such security are quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in such security selected by the Board of Directors
of the Company. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business or, if such
security is not listed or admitted to trading on any national securities
exchange, a Business Day. If a security is not publicly held or not so
listed or traded, "Fair Market Value" shall mean the fair value per share
of stock or per other unit of such other security, as determined by an
independent investment banking firm experienced in the valuation of
securities selected in good faith by the Board of Directors of the Company,
or, if no such investment banking firm is, in the good faith judgment of
the Board of Directors, available to make such determination, in good faith
by the Board of Directors of the Company; provided, however, that for
purposes of making the adjustment provided for by Section 11(a)(ii) hereof,
the Fair
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Market Value of a share of Preferred Stock shall not be less than 100% of
the product of the Fair Market Value of a share of Common Stock multiplied
by the higher of the then Dividend Multiple or Vote Multiple applicable to
the Preferred Stock (as defined in the provisions of the Certificate of
Designations relating to the Preferred Stock) and shall not exceed 105% of
the product of the then Fair Market Value of a share of Common Stock
multiplied by the higher of the then Dividend Multiple or Vote Multiple
applicable to the Preferred Stock. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good
faith by the Board of Directors of the Company based upon such appraisals
or valuation reports of such independent experts as the Board of Directors
of the Company shall in good faith determine to be appropriate in
accordance with good business practices and the interests of the holders of
Rights. Any such determination of Fair Market Value shall be described in a
statement filed with the Rights Agent and shall be binding upon the Rights
Agent.
(c) All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-thousandth of a share, as the case
may be.
(d) Irrespective of any adjustment or change in the Exercise Price or
the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Exercise Price and the number of shares to be
issued upon exercise of the Rights as in the initial Rights Certificates
issued hereunder but, nevertheless, shall represent the Rights as so
adjusted.
(e) Before taking any action that would cause an adjustment reducing
the purchase price per whole share of Preferred Stock upon exercise of the
Rights below the then par value, if any, of the shares of Preferred Stock,
the Company shall use its best efforts to take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and non-assessable shares of such
Preferred Stock at such adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary notwithstanding, in
the event of any reclassification of stock of the Company or any
recapitalization, reorganization or partial liquidation of the Company or
similar transaction, the Company shall be entitled to make such further
adjustments in the number of shares of Preferred Stock which may be
acquired upon exercise of the Rights, and such adjustments in the Exercise
Price therefor, in addition to those adjustments expressly required by the
other paragraphs of this Section 11, as the Board of Directors of the
Company shall determine to be necessary or appropriate in order for the
holders of the Rights in such event to be treated equitably and in
accordance with the purpose and intent of this Rights Agreement or in order
that any such event shall not, but for such adjustment, in the opinion of
counsel to the Company, result in the stockholders of the Company being
subject to any United States federal income tax liability by reason
thereof.
(g) In the event the Company shall at any time after the Record Date
make any distribution on the shares of Common Stock of the Company, whether
by way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Company or otherwise, in cash
or any debt security, debt instrument,
-16-
real or personal property or any other property (other than any shares of
Common Stock or other capital stock of the Company and other than any right
or warrant to acquire any such shares, including any debt security
convertible into or exchangeable for any such share, at less than the Fair
Market Value of such shares) and the amount of such cash dividend or the
Fair Market Value of such debt security, debt instrument or property
exceeds 150% of the aggregate amount of the cash dividends declared or paid
on the Common Stock of the Company in the 15-month period immediately
preceding such distribution, then and in each such event, unless such
distribution is part of or is made in connection with a transaction to
which Section 11(a)(ii) or Section 13 hereof applies, the Exercise Price
shall be reduced by an amount equal to the cash or the Fair Market Value of
such distribution, as the case may be, per share of Common Stock of the
Company. For purposes hereof, the Fair Market Value of any property
distributed to the holders of shares of Common Stock of the Company shall
be the Fair Market Value of such property as determined by an independent
investment banking firm experienced in the valuation of securities or the
other property so distributed, as the case may be, selected in good faith
by the Board of Directors of the Company, or, if no such investment banking
firm is in the good faith judgment of the Board of Directors available to
make such determination, in good faith by the Board of Directors of the
Company, whose determination shall be final and binding on the Company, the
Rights Agent and the holders of Rights.
Section 12. Certification of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11, 13 or 23(c), the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts giving rise to such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred Stock
a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Rights Certificate in accordance with Section 25. Notwithstanding the
foregoing sentence, the failure of the Company to make such certification or
give such notice shall not affect the validity of or the force or effect of the
requirement for such adjustment. Any adjustment to be made pursuant to Section
11, 13 or 23(c) of this Rights Agreement shall be effective as of the date of
the event giving rise to such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any adjustment unless and
until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, at any time after the time that any Person
becomes an Acquiring Person, (x) the Company shall, directly or indirectly,
consolidate with, or merge with and into, any other Person or Persons
(other than an Exempt Person or Persons) and the Company shall not be the
surviving or continuing Company of such consolidation or merger, or (y) any
Person or Persons (other than an Exempt Person) shall, directly or
indirectly, consolidate with, or merge with and into, the Company, and the
Company shall be the continuing or surviving Company of such consolidation
or merger and, in connection with such consolidation or merger, all or part
of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or
-17-
other securities of any other Person (other than an Exempt Person) or of
the Company or cash or any other property, or (z) the Company or one or
more of its Subsidiaries shall, directly or indirectly, sell or otherwise
transfer to any other Person or any Affiliate or Associate of such Person,
in one or more transactions, or the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any Persons in one or a
series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole), then, on the first occurrence of any such event, proper
provision shall be made so that (i) each holder of record of a Right,
except as provided in Section 7(e) hereof, shall thereafter have the right
to receive, upon the exercise thereof and payment of the Exercise Price in
accordance with the terms of this Rights Agreement, such number of shares
of validly issued, fully paid, non-assessable and freely tradable Common
Stock of the Principal Party (as defined herein), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall
equal the result obtained by dividing the Exercise Price by 50% of the Fair
Market Value of the Common Stock of the Principal Party on the date of the
consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Rights Agreement; (iii) the term
"Company" for all purposes of this Rights Agreement shall thereafter be
deemed to refer to such Principal Party; (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with the
provisions of Section 9 hereof applicable to the reservation of Preferred
Stock) in connection with such consummation as may be necessary to insure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; provided, however, that, upon
the subsequent occurrence of any merger, consolidation, sale of all or
substantially all of the assets, recapitalization, reclassification of
shares, reorganization or other extraordinary transaction in respect of
such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Exercise Price, such
cash, shares, rights, warrants and other property which such holder would
have been entitled to receive had it, at the time of such transaction,
owned the shares of Common Stock of the Principal Party purchasable upon
the exercise of a Right, and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance
with the terms hereof for such cash, shares, rights, warrants and other
property; and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any event described in clause (x), (y)
or (z) above of this Section 13(a).
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which shares of Common Stock of the
Company are changed or otherwise exchanged or converted in such merger
or consolidation, or, if there is more than one such issuer, the
issuer of the Common Stock of which has the greatest market value or
(B) if no securities are so issued, (x) the Person that is the other
party to the merger or consolidation and that
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survives such merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the greatest
market value or (y) if the Person that is the other party to the
merger or consolidation does not survive the merger or consolidation,
the Person that does survive the merger or consolidation (including
the Company if it survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant
to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of
the assets or earning power so transferred or if the Person receiving
the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons as is the issuer of Common Stock
having the greatest market value of shares outstanding; provided,
however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or if such Person
is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of all of which are and have been so registered, the
term "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest market value of shares
outstanding.
(c) The Company shall not consummate any consolidation, merger or sale
or transfer of assets or earning power referred to in Section 13(a) unless
the Principal Party shall have a sufficient number of authorized shares of
its Common Stock that have not been issued or reserved for issuance to
permit exercise in full of all Rights in accordance with this Section 13
and unless prior thereto the Company and the Principal Party involved
therein shall have executed and delivered to the Rights Agent an agreement
confirming that the Principal Party shall, upon consummation of such
consolidation, merger or sale or transfer of assets or earning power,
assume this Rights Agreement in accordance with Section 13(a) hereof and
that all rights of first refusal or preemptive rights in respect of the
issuance of shares of Common Stock of the Principal Party upon exercise of
outstanding Rights have been waived and that such transaction shall not
result in a default by the Principal Party under this Rights Agreement, and
further providing that, as soon as practicable after the date of any
consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a) hereof, the Principal Party will:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as practicable
after such filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting
the requirements of the Act) until the date of expiration of the
Rights, and similarly comply with applicable state securities laws;
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(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility
requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act. In the event that any of the transactions
described in Section 13(a) hereof shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii) hereof, the
Rights which have not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter be exercisable in the
manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-Laws or
other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue, in connection
with, or as a consequence of, the consummation of a transaction referred to
in this Section 13, shares of Common Stock of such Principal Party at less
than the then Fair Market Value per share (determined pursuant to Section
11(b) hereof) or securities exercisable for, or convertible into, Common
Stock of such Principal Party at less than such then Fair Market Value
(other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special tax or similar payment in connection with the
issuance to any holder of a Right of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the
Company shall not consummate any such transaction unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or
amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a
consequence of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights (i.e.,
Rights to acquire less than one one-thousandth of a share of Preferred
Stock), unless such fractional Rights result from a transaction referred to
in Section 11(a)(i) hereof. If the Company shall determine not to issue
such fractional Rights, then, in lieu of such fractional Rights, there
shall be paid to the holders of record of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the Fair Market Value of a
whole Right.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of
one-thousandth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which
are integral multiples of one-thousandth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Company may, at its election,
-20-
issue depositary receipts evidencing fractions of shares pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such
depositary receipts shall have all of the rights, privileges and
preferences to which they would be entitled as owners of the Preferred
Stock. With respect to fractional shares that are not integral multiples of
one-thousandth of a share, if the Company does not issue such fractional
shares or depositary receipts in lieu thereof, there shall be paid to the
holders of record of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares
of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Rights Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and, in this Rights 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 Rights 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 Rights
Agreement.
Section 16. Agreement of Right Holders. Each holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights shall be evidenced by
the Book-Entries representing, or the certificates for, Common Stock
registered in the name of the holders of Common Stock (together, as
applicable, with the Summary of Rights), which Book-Entries representing,
or the certificates for, Common Stock shall also constitute certificates
for Rights, and not by separate Rights Certificates, and each Right shall
be transferable only simultaneously and together with the transfer of
shares of Common Stock;
(b) After the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
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(c) The Company and the Rights Agent may deem and treat the person in
whose name the Rights Certificate (or, prior to the Distribution Date, the
associated Book-Entry representing, or certificate for, Common Stock) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary.
(d) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Rights
Agreement by reason of any preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best efforts
to have any such order, decree or ruling lifted or otherwise overturned as
soon as possible; and
(e) Rights Beneficially Owned by certain persons will under certain
circumstances set forth in this Rights Agreement become null and void
pursuant to Section 7(e) hereof; and
(f) This Rights Agreement may be supplemented or amended from time to
time pursuant to Section 26 hereof.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Preferred Stock or any other
securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof (except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in Section 7(f)
hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution
of this Rights Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and
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to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or failed to be done by the Rights Agent in
connection with the acceptance and administration of this Rights Agreement,
including the costs and expenses of defending against any claim of
liability relating to the Rights or this Rights Agreement.
(b) The Rights Agent shall be protected against, 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 Rights Agreement in reliance
upon any Rights Certificate or certificate for Preferred Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons or otherwise upon the advice
of counsel as set forth in Section 20.
Section 19. Merger or Consolidation of, or Change in Name of, the Rights
Agent.
(a) Any Company into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Company
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Company succeeding to the
corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under
this Rights 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
Company would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Rights Agreement
any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; 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; in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Rights 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:
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(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman
of the Board, any President or any Senior or Executive Vice President of
the Company and delivered to the Rights Agent. Any such certificate shall
be full authorization to the Rights Agent for any action taken, suffered or
omitted in good faith by it under the provisions of this Rights Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in
the Rights Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights 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 Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Rights Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Sections 3, 11, 13, 23 and 27
hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate furnished
pursuant to Section 12, describing any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Preferred Stock to be
issued pursuant to this Rights Agreement or any Rights Certificate or as to
whether any shares of Preferred Stock 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 the Rights Agreement.
-24-
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, any President or any Senior or Executive Vice
President of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken, suffered or omitted by it in good faith in accordance
with instructions of any such officer or for any delay in acting while
waiting for those instructions.
(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 financially 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 the Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days notice in writing mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) upon 30 days notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and the Preferred Stock by registered or certified
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. If
the Company shall fail 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 or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the incumbent Rights Agent or the holder of
record of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
Company organized and doing business under the laws of the United States or of
any state thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination in the conduct of its corporate trust or stock transfer business
by federal or state authorities and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
Affiliate controlled by a Company described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
-25-
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed, but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Company shall have the authority to act as the Rights Agent until a
successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Rights 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 Exercise Price per share and the number or kind or class of
shares of stock or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Rights Agreement.
Section 23. Redemption.
(a) The Company may, at its option, but only by the vote of a majority
of the Board of Directors, redeem all but not less than all of the then
outstanding Rights, at any time prior to the Close of Business on the
earlier of (i) the tenth day following the Stock Acquisition Date (subject
to extension by the Company as provided in Section 26 hereof) or (ii) the
Expiration Date, at a redemption price of $0.01 per Right, subject to
adjustments as provided in subsection (c) below (the "Redemption Price").
Notwithstanding anything contained in this Rights Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 11(a)(ii)
prior to the expiration of the Company's right of redemption hereunder.
(b) Without any further action and without any notice, the right to
exercise the Rights will terminate effective at the time so designated by
action of the Board of Directors ordering the redemption of the Rights and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 days after the effective time of the action of
the Board of Directors ordering the redemption of the Rights, the Company
shall 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
Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
notice of redemption will state the method by which the payment of the
Redemption Price will be made. At the option of the Board of Directors, the
Redemption Price may be paid in cash to each Rights holder or by the
issuance of shares (and, at the Company's election pursuant to Section
14(b) hereof, cash or
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depositary receipts in lieu of fractions of shares other than fractions
which are integral multiples of one one-thousandth (1/1,000) of a share) of
Preferred Stock or Common Stock having a Fair Market Value equal to such
cash payment.
(c) In the event the Company shall at any time after the date of this
Rights Agreement (A) pay any dividend on Common Stock in shares of Common
Stock, (B) subdivide or split the outstanding shares of Common Stock into a
greater number of shares or (C) combine or consolidate the outstanding
shares of Common Stock into a smaller number of shares or effect a reverse
split of the outstanding shares of Common Stock, or (D) combine or
consolidate the outstanding shares of Common Stock into a smaller number of
shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving Company), then,
and in each such event, the Redemption Price shall be appropriately
adjusted to reflect the foregoing.
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall propose
(i) to effect any of the transactions referred to in Section 11(a)(i) or
11(g) or (ii) to offer to the holders of record of its Common Stock
options, warrants, or other rights to subscribe for or to purchase shares
of Common Stock (including any security convertible into or exchangeable
for Common Stock) or shares of stock of any class or any other securities,
options, warrants, convertible or exchangeable securities or other rights,
or (iii) to effect any reclassification of its Preferred Stock or Common
Stock or any recapitalization or reorganization of the Company, or (iv) to
effect any consolidation or merger with or into, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person or Persons, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company shall give to each holder of record of a Rights Certificate, in
accordance with Section 25, notice of such proposed action, which shall
specify the record date for the purposes of such transaction referred to in
Section 11(a)(i) or such dividend or distribution, or the date on which
such reclassification, recapitalization, reorganization, consolidation,
merger, sale or transfer of assets, liquidation, dissolution, or winding up
is to take place and the record date for determining participation therein
by the holders of record of Common Stock or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of record of the Preferred Stock for
purposes of such action, and in the case of any such other action, at least
10 days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of record of Common Stock or
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section 24 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon
any such action.
(b) In case any of the transactions referred to in Section 11(a)(i),
11(g) or 13 of this Rights Agreement are proposed, then, in any such case,
the Company shall give to
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each holder of Rights, in accordance with Section 25 hereof, notice of the
proposal of such transaction at least 10 days prior to consummating such
transaction, which notice shall specify the proposed event and the
consequences of the event to holders of Rights under Section 11(a)(i),
11(g) or 13 hereof, as the case may be, and, upon consummating such
transaction, shall similarly give notice thereof to each holder of Rights.
Section 25. Notices. Notices or demands authorized by this Rights Agreement
to be given or made by the Rights Agent or by the holder of record of any Rights
Certificate or Right to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
SUPERVALU INC.
00000 Xxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000
(000) 000-0000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Rights Agreement to be given or made by the Company or by the holder of
record of any Rights Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Norwest Bank Minnesota, N.A.
Shareowner Services
000 Xxxxx Xxxxxxx Xxxxxxxx
Xxxxx Xx. Xxxx, XX 00000-0000
Attention: Manager of Administration
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Rights
Certificate or Right shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. Supplements and Amendments. For as long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Rights Agreement without the approval of any holders of the Rights. At any time
when the Rights are not then redeemable, the Company may, and the Rights Agent
shall if the Company so directs, supplement or amend this Rights Agreement
without the approval of any holders of Rights Certificates (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein or (iii) to
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable, provided that no such supplement or amendment
pursuant to this clause (iii) shall materially adversely affect the interest of
the holders of Rights Certificates. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment.
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Section 27. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock at an exchange ratio of one share per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Voting Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 27 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, the
Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional
shares. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this paragraph (d), the current
market value of a whole share of Common Stock shall be the closing price of
a share of Common Stock for the Trading Day immediately prior to the date
of exchange pursuant to this Section 27.
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Section 28. Successors. All of the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any Person or corporation other than the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, the holders of Common Stock in their
capacity as holders of the Rights) any legal or equitable right, remedy or claim
under this Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of record of
the Rights Certificates (and, prior to the Distribution Date, the holders of
Common Stock in their capacity as holders of the Rights).
Section 30. Delaware Contract. This Rights Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 31. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 33. Severability. If any term, provision, covenant or restriction
of this Rights 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 Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 34. Determinations And Actions By The Board Of Directors, Etc.
(a) The Board of Directors of the Company shall have the exclusive
power and authority to administer this Rights Agreement and to exercise all
rights and powers specifically granted to the Board of Directors or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including a determination to redeem or not redeem the
Rights or to amend the Rights Agreement and a determination of whether
there is an Acquiring Person. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made
by the Board of Directors in good faith shall (x) be final, conclusive and
binding on the
-30-
Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board of Directors to any liability to the holders
of the Rights.
(b) It is understood that the TIDE Committee (as defined below) of the
Board of Directors shall review and evaluate this Rights Agreement in order
to consider whether the maintenance of this Rights Agreement continues to
be in the interests of the Company, its shareholders and any other relevant
constituencies of the Company, at least every three years, or sooner if any
Person shall have made a proposal to the Company, or taken any other
action, that, if effective, could cause such Person to become an Acquiring
Person hereunder, if a majority of the members of the TIDE Committee shall
deem such review and evaluation appropriate after giving due regard to all
relevant circumstances. Following each such review, the TIDE Committee will
communicate its conclusions to the full Board of Directors, including any
recommendation in light thereof as to whether this Rights Agreement should
be modified or the Rights should be redeemed. The TIDE Committee shall be
comprised of the Directors of the Company who are not officers, employees
or Affiliates of the Company.
-31-
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed, this 12th day of April, to be effective as of the day and year
first above written.
SUPERVALU INC.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman, President & CEO
NORWEST BANK MINNESOTA, N.A.
By /s/ Xxxxx Xxxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
EXHIBIT A
TO RIGHTS AGREEMENT
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE
RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED TO
OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES
OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
SUPERVALU INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On April 12, 2000, the Board of Directors of SUPERVALU INC. (the "Company")
declared a dividend distribution of one preferred stock purchase right (a
"Right") for each outstanding share of Common Stock, $1.00 par value per share
(the "Common Stock"), of the Company held by stockholders of record on April 24,
2000 (the "Record Date"). Each Right entitles the registered holder to purchase
from the Company one one-thousandth (1/1,000) of a share of preferred stock of
the Company, designated as Series A Junior Participating Preferred Stock (the
"Preferred Stock") at a price of $85.00 per one one-thousandth (1/1,000) of a
share (the "Exercise Price"). The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement"), dated as of April 24,
2000, between the Company and Norwest Bank Minnesota, N.A., as Rights Agent (the
"Rights Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will automatically
trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following the first date (the "Stock
Acquisition Date") on which there is a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person"), with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Company or such earlier or later date (not
beyond the thirtieth day after the Stock Acquisition Date) as the Board of
Directors may determine or (ii) the tenth business day (or such later date as
may be determined by the Board of Directors prior to such time as any person or
group of affiliated or associated persons becomes an Acquiring Person) after the
date of the commencement or announcement of a person's or group's intention to
commence a tender or exchange offer the consummation of which would result in
the ownership of 15% or more of the Company's outstanding voting stock (even if
no shares are actually purchased pursuant to such offer); prior thereto, the
Rights will not be exercisable, will not be represented by a separate
certificate, and will not be transferable apart from the Common Stock, but will
instead be evidenced, (i) with respect to any of the shares of Common Stock held
in uncertificated book-entry form (a "Book-Entry") outstanding as of the Record
Date, by such Book-Entry and (ii) with respect to the shares of Common Stock
evidenced by Common Stock
A-1
certificates outstanding as of the Record Date, by such Common Stock
certificate, together with a copy of this Summary of Rights. An Acquiring Person
does not include (A) the Company, (B) any subsidiary of the Company, (C) any
employee benefit plan or employee stock plan of the Company or of any subsidiary
of the Company, or any trust or other entity organized, appointed, established
or holding Common Stock for or pursuant to the terms of any such plan or (D) any
person or group whose ownership of 15% or more of the shares of voting stock of
the Company then outstanding results solely from (i) any action or transaction
or transactions approved by the Board of Directors before such person or group
became an Acquiring Person or (ii) a reduction in the number of outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of an additional 1% or more of the
Company's voting stock then outstanding unless such acquisition of additional
voting stock will not result in such person or group becoming an Acquiring
Person by reason of such clause (i) or (ii). For purposes of the foregoing,
outstanding voting stock of the Company includes voting stock that trades on a
"when issued" basis on a national securities exchange or on the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ").
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after April 24, 2000 will contain
a legend incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), transfer on the
Company's Direct Registration System of any Common Stock represented by a
Book-Entry or a certificate outstanding as of April 24, 2000, and, in each case,
with or without a copy of this Summary of Rights attached thereto, will also
constitute the transfer of the Rights associated with the Common Stock
represented by such Book-Entry or certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. Unless earlier
redeemed by the Company as described below, the Rights will expire at the close
of business on April 12, 2010 (the "Expiration Date") (or, if the Distribution
Date shall have occurred before April 12, 2010, at the close of business on the
90th day following the Distribution Date).
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock (i)
subordinate to any other series of the Company's preferred stock and (ii) senior
to the Common Stock. The Preferred Stock may not be issued except upon exercise
of Rights. Each share of Preferred Stock will be entitled to receive when, as
and if declared, a quarterly dividend in an amount equal to (i) 1,000 times the
cash dividends declared on the Company's Common Stock, and (ii) a preferential
cash dividend, if any, in preference to holders of Common Stock in an amount
equal to $50.00 per share of Preferred Stock less the per share amount of all
cash dividends declared on the Preferred Stock pursuant to clause (i) since the
immediately preceding quarterly dividend payment date. In addition, Preferred
Stock is entitled to 1,000 times any noncash dividends (other than dividends
payable in equity securities) declared on the Common Stock, in like kind. In the
event of the liquidation of the Company, the holders of Preferred Stock will be
entitled to receive, for each
A-2
share of Preferred Stock, a payment in an amount equal to the greater of $1.00
per one one-thousandth of a share plus accrued and unpaid dividends and
distributions thereon or 1,000 times the payment made per share of Common Stock.
Each share of Preferred Stock will have 1,000 votes, voting together with the
Common Stock. In the event of any merger, consolidation or other transaction in
which Common Stock is exchanged, each share of Preferred Stock will be entitled
to receive 1,000 times the amount received per share of Common Stock. The rights
of Preferred Stock as to dividends, liquidation and voting are protected by
anti-dilution provisions. If the dividends accrued on the Preferred Stock for
four or more quarterly dividend periods, whether consecutive or not, shall not
have been declared and paid or irrevocably set aside for payment, the holders of
record of the Preferred Stock of the Company of all series (including the
Preferred Stock) will have the right to elect two members to the Company's Board
of Directors.
The number of shares of Preferred Stock issuable upon exercise of the
Rights is subject to certain adjustments from time to time in the event of a
stock dividend on, or a subdivision or combination of, the Common Stock. The
Exercise Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, in the event that, after the time
that a Person becomes an Acquiring Person, the Company were to be acquired in a
merger or other business combination (in which any shares of Common Stock are
changed into or exchanged for other securities or assets) or more than 50% of
the assets or earning power of the Company and its subsidiaries (taken as a
whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record, other than the Acquiring Person, of a Right will
from and after such date have the right to receive, upon payment of the Exercise
Price, that number of shares of common stock of the acquiring company having a
market value at the time of such transaction equal to two times the Exercise
Price.
In addition, unless the Rights are earlier redeemed, in the event that a
person or group becomes an Acquiring Person, the Rights Agreement provides that
proper provision will be made so that each holder of record of a Right, other
than the Acquiring Person (whose Rights will thereupon become null and void),
will thereafter have the right to receive, upon payment of the Exercise Price,
that number of one one-thousandths of a share of Preferred Stock having a market
value at the time of the transaction equal to two times the Exercise Price (such
market value to be determined with reference to the market value of the
Company's Common Stock as provided in the Rights Agreement).
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
voting stock, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will have become void),
in whole or in part, at an exchange ratio of one share of Common Stock per Right
(subject to adjustment).
Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share) may, at the election of the
Company, be evidenced
A-3
by depositary receipts. The Company may also issue cash in lieu of fractional
shares which are not integral multiples of one one-thousandth of a share.
At any time on or prior to the close of business on the earlier of (i) the
tenth day after the Stock Acquisition Date (or such later date as a majority of
the Board of Directors may determine) or (ii) the Expiration Date, the Company
may redeem the Rights in whole, but not in part, at a price of $0.01 per Right
(the "Redemption Price"). Immediately upon the effective time of the action of
the Board of Directors of the Company authorizing redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Company may amend the
Rights in any manner, including an amendment to extend the time period in which
the Rights may be redeemed. At any time when the Rights are not then redeemable,
the Company may amend the Rights in any manner that does not materially
adversely affect the interests of holders of the Rights as such.
The TIDE Committee of the Company, consisting of Directors who are neither
officers, employees nor affiliates of the Company, will review the Rights
Agreement at least every three years and, if a majority of the members of the
TIDE Committee deems it appropriate, may recommend a modification or termination
of the Rights Agreement.
Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to the Company's report on Form 8-K relating
to the Rights Agreement. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement which is incorporated in this summary description herein by reference.
A-4
EXHIBIT B
TO RIGHTS AGREEMENT
[Form of Rights Certificate]
Certificate No. W - Rights
NOT EXERCISABLE AFTER (I) APRIL 12, 2000, OR (II) IF THE DISTRIBUTION DATE
(AS DEFINED BELOW) SHALL HAVE OCCURRED BEFORE THE DATE SPECIFIED IN CLAUSE
(I), THE DATE WHICH IS NINETY (90) DAYS AFTER THE DISTRIBUTION DATE, OR
EARLIER IF REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $0.01 PER RIGHT
(SUBJECT TO ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS
AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
Rights 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 Rights
Agreement dated as of April 12, 2000 (the "Rights Agreement") between SUPERVALU
INC. (the "Company"), and Norwest Bank Minnesota, N.A., (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 p.m. (New York City time)
on April 12, 2010 (or if the Distribution Date shall have occurred before April
12, 2010, at the close of business on the 90th day following the Distribution
Date) at the office of the Rights Agent designated in the Rights Agreement for
such purpose, or its successor as Rights Agent, one one-thousandth (1/1,000) of
a fully paid nonassessable share of Series A Junior Participating Preferred
Stock, no par value per share, of the Company (the "Preferred Stock") at a
purchase price of $85.00, as the same may from time to time be adjusted in
accordance with the Rights Agreement (the "Exercise Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and the number of
shares of Preferred Stock which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and adjustment
upon the happening of certain events and, upon the happening of certain events,
securities other than shares of Preferred Stock, or other property, may be
acquired upon exercise of the Rights evidenced by this Rights Certificate, as
provided in the Rights Agreement.
B-1
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 of the Rights Agent,
the Company and the holders of record of Rights Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated in the Rights Agreement
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option or under certain
other circumstances at a redemption price of $0.01 per Right. No fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth (1/1,000) of a share) are required to be issued upon the
exercise of any Right or Rights evidenced hereby, and in lieu thereof the
Company may cause depositary receipts to be issued and/or a cash payment may be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at meeting thereof, or to give or
withhold consent to any corporate action or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this 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.
B-2
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of April 12, 2000.
ATTEST:
By
---------------------------------- ------------------------------------
Secretary Name:
Title:
Countersigned:
NORWEST BANK MINNESOTA, N.A.
By:
-----------------------------------
Name:
Title:
B-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificates.)
FOR VALUE RECEIVED _____________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________ (Please print name and address of
transferee)______________________________________________________________ Rights
evidenced by this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
______________________________ Attorney to transfer the within Rights
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ________________, ____
------------------------------------
Signature
Signature Medallion Guaranteed:
B-4
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person
or an Associate or an Affiliate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
Dated: ________________, ____ _______________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-5
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Rights Certificate.)
TO:_________________
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such share(s) be issued in the following name:
Please insert social security
or other identifying number: ______________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: ______________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated: ________________, ____
--------=--------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on the
fact of this Right Certificate)
Signature Medallion Guaranteed
B-6
EXHIBIT C
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
SUPERVALU INC.
Pursuant to Section 151 of the Delaware
General Corporation Law
SUPERVALU INC., a corporation organized and existing under the Delaware
General Corporation Law (the "Company"), in accordance with the provisions of
Section 151 of such law, DOES HEREBY CERTIFY that pursuant to authority
conferred on the Board of Directors of the Company by its Restated Certificate
of Incorporation and the provisions of Section 151(g) of the General Corporation
Law of the State of Delaware, the Board of Directors on April 12, 2000 adopted
the following resolution:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Company in accordance with the provisions of its Restated
Certificate of Incorporation, a series of Preferred Stock, no par value, of
the Company be, and hereby is, created and that the designation and amount
thereof and the voting powers, preferences and relative, participating,
optional or other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such series shall be
150,000.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set forth,
the holders of shares of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, (i) cash dividends in an amount per
share (rounded to the nearest cent) equal to 1000 times the aggregate per
share amount of all cash dividends declared or paid on the Common Stock,
$1.00 par value per share, of the Company (the "Common Stock") and (ii) a
preferential cash dividend (the "Preferential Dividends"), if any, in
preference to the holders of Common Stock, on the first day of February,
May, August and November of each year (each a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A Preferred
Stock, payable in an amount (except in the case of the first Quarterly
Dividend Payment if the date of the first issuance of Series A Preferred
Stock is a date other than a Quarterly Dividend Payment date, in which case
such payment shall be a prorated amount of such amount) equal to $50 per
share of Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause (i)
of this sentence since the immediately preceding Quarterly Dividend Payment
Date or, with
C-1
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred Stock.
In the event the Company shall, at any time after the issuance of any share
or fraction of a share of Series A Preferred Stock, make any distribution
on the shares of Common Stock of the Company, whether by way of a dividend
or a reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Company or otherwise, which is payable in cash
or any debt security, debt instrument, real or personal property or any
other property (other than cash dividends subject to the immediately
preceding sentence, a distribution of shares of Common Stock or other
capital stock of the Company or a distribution of rights or warrants to
acquire any such share, including any debt security convertible into or
exchangeable for any such share, at a price less than the Fair Market Value
(as hereinafter defined) of such share), then, and in each such event, the
Company shall simultaneously pay on each then outstanding share of Series A
Preferred Stock of the Company a distribution, in like kind, of 1000 times
such distribution paid on a share of Common Stock (subject to the
provisions for adjustment hereinafter set forth). The dividends and
distributions on the Series A Preferred Stock to which holders thereof are
entitled pursuant to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are hereinafter referred
to as "Dividends" and the multiple of such cash and non-cash dividends on
the Common Stock applicable to the determination of the Dividends, which
shall be 1,000 initially but shall be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Dividend
Multiple." In the event the Company shall at any time after April 24, 2000
("the Effective Date") (i) declare or pay any dividend or make any
distribution on Common Stock payable in shares of Common Stock, (ii) effect
a subdivision or split or a combination, consolidation or reverse split of
the outstanding shares of Common Stock into a greater or lesser number of
shares of Common Stock, or (iii) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving Company), then in each such case the Dividend
Multiple thereafter applicable to the determination of the amount of
Dividends which holders of shares of Series A Preferred Stock shall be
entitled to receive shall be the Dividend Multiple applicable immediately
prior to such event multiplied by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Company shall declare each Dividend at the same time it
declares any cash or non-cash dividend or distribution on the Common Stock
in respect of which a Dividend is required to be paid. No cash or non-cash
dividend or distribution on the Common Stock in respect of which a Dividend
is required to be paid shall be paid or set aside for payment on the Common
Stock unless a Dividend in respect of such dividend or distribution on the
Common Stock shall be simultaneously paid, or set aside for payment, on the
Series A Preferred Stock.
(C) Preferential Dividends shall begin to accrue on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Series A Preferred Stock.
Accrued but unpaid Preferential Dividends shall cumulate but shall not bear
interest. Preferential Dividends paid on the shares of Series A Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
C-2
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the holders of the Common
Stock. The number of votes which a holder of Series A Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Vote Multiple." In
the event the Company shall at any time after the Effective Date, (i)
declare or pay any dividend on Common Stock payable in shares of Common
Stock, (ii) effect a subdivision or split or a combination, consolidation
or reverse split of the outstanding shares of Common Stock into a greater
or lesser number of shares of Common Stock, or (iii) issue any shares of
its capital stock in a reclassification of the Common Stock (including any
such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving Company), then in each such case
the Vote Multiple thereafter applicable to the determination of the number
of votes per share to which holders of shares of Series A Preferred Stock
shall be entitled after such event shall be the Vote Multiple immediately
prior to such event multiplied by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Restated Certificate
of Incorporation or Restated By-Laws, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of
the Company.
(C) In the event that the Preferential Dividends accrued on the Series
A Preferred Stock for four or more consecutive quarterly periods shall not
have been declared and paid or set apart for payment, the holders of record
of the Series A Preferred Stock, voting together with the holders of record
of any other series of preferred stock of the Company which shall then have
the right, expressly granted by the Certificate of Incorporation of the
Company or in any resolution or resolutions of the Board of Directors of
the Company providing for the issue of such shares of preferred stock, to
elect directors upon such a default in the payment of dividends by the
Company shall have the right, at the next meeting of stockholders called
for the election of directors, voting together as a class, to elect two
members to the Board of Directors, which directors shall be in addition to
the number provided for pursuant to the Company's By-laws prior to such
event, to serve until the next Annual Meeting and until their successors
are elected and qualified or their earlier resignation, removal or
incapacity or until such earlier time as all accrued and unpaid
Preferential Dividends upon the outstanding shares of Series A Preferred
Stock shall have been paid (or set aside for payment) in full. The holders
of shares of Series A Preferred Stock shall continue to have the right to
elect directors as provided by the immediately preceding sentence until all
accrued and unpaid Preferential Dividends upon the outstanding shares of
Series A Preferred Stock shall have been paid (or set aside for payment) in
full. Such directors may be removed and replaced by such stockholders, and
vacancies in such directorships may be filled only by such stockholders (or
by the remaining director elected by such stockholders, if there be one) in
the manner permitted by law. Subject to the foregoing, any directors
elected pursuant to this paragraph 3(C) shall be elected annually and shall
not constitute
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members of any Class of directors as contemplated by Section 3.02 of the
Company's Restated Bylaws.
(D) Except as otherwise required by the Certificate of Incorporation
or By-Laws or set forth herein, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for the taking of any corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Dividends are in arrears or the
Company shall be in default of payment thereof, thereafter and until all
accrued and unpaid Preferential Dividends and Dividends, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been
paid or set irrevocably aside for payment in full, and in addition to any
and all other rights which any holder of shares of Series A Preferred Stock
may have in such circumstances, the Company shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration, any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity as to dividends with the
Series A Preferred Stock, unless dividends are paid ratably on the
Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) except as permitted by subparagraph (iv) of this paragraph
4(A), redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Company ranking junior (both as to
dividends and upon liquidation, dissolution or winding up) to the
Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock (either as to dividends or
upon liquidation, dissolution or winding up), except in accordance
with a purchase offer made to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any Subsidiary (as hereinafter
defined) of the Company to purchase or otherwise acquire for consideration
any shares of stock of the Company unless the Company could, under
paragraph (A) of this Section 4, purchase or
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otherwise acquire such shares at such time and in such manner. A
"Subsidiary" of the Company shall mean any Company or other entity of which
securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors of such Company or
other entity or other persons performing similar functions are beneficially
owned, directly or indirectly, by the Company or by any Company or other
entity that is otherwise controlled by the Company.
(C) The Company shall not issue any shares of Series A Preferred Stock
except upon exercise of Rights issued pursuant to that certain Rights
Agreement dated as of April 12, 2000 between the Company and Norwest Bank
Minnesota, N.A., as Rights Agent, a copy of which is on file with the
Secretary of the Company at its principal executive office and shall be
made available to stockholders of record without charge upon written
request therefor addressed to said Secretary. Notwithstanding the foregoing
sentence, nothing contained in the provisions hereof shall prohibit or
restrict the Company from issuing for any purpose any series of Preferred
Stock with rights and privileges similar to, different from, or greater
than, those of the Series A Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred Stock, without designation as to series, and such shares may
be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless the holders of shares of Series A Preferred
Stock shall have received, subject to adjustment as hereinafter provided, (A)
$1.00 per one one-thousandth (1/1000) of a share plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment or, (B) if greater than the amount specified in clause
(i)(A) of this sentence, an amount equal to 1,000 times the aggregate amount to
be distributed per share to holders of Common Stock, as the same may be adjusted
as hereinafter provided and (ii) to the holders of stock ranking on a parity
upon liquidation, dissolution or winding up with the Series A Preferred Stock,
unless simultaneously therewith distributions are made ratably on the Series A
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series A Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Company applicable pursuant to said clause to
the determination of the Participating Liquidation Amount, as said multiple may
be adjusted from time to time as hereinafter provided, is hereinafter referred
to as the "Liquidation Multiple." In the event the Company shall at any time
after the Effective Date (i) declare or pay any dividend on Common
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Stock payable in shares of Common Stock, (ii) effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, or (iii) issue
any shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is continuing or surviving Company), then, in each
such case, the Liquidation Multiple thereafter applicable to the determination
of the Participating Liquidation Amount to which holders of Series A Preferred
Stock shall be entitled after such event shall be the Liquidation Multiple
applicable immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Certain Reclassification and Other Events.
(A) In the event that holders of shares of Common Stock of the Company
receive after the Effective Date in respect of their shares of Common Stock
any share of capital stock of the Company (other than any share of Common
Stock of the Company), whether by way of reclassification,
recapitalization, reorganization, dividend or other distribution or
otherwise (a "Transaction"), then, and in each such event, the dividend
rights, voting rights and rights upon the liquidation, dissolution or
winding up of the Company of the shares of Series A Preferred Stock shall
be adjusted so that after such event the holders of Series A Preferred
Stock shall be entitled, in respect of each share of Series A Preferred
Stock held, in addition to such rights in respect thereof to which such
holder was entitled immediately prior to such adjustment, to (i) such
additional dividends as equal the Dividend Multiple in effect immediately
prior to such Transaction multiplied by the additional dividends which the
holder of a share of Common Stock shall be entitled to receive by virtue of
the receipt in the Transaction of such capital stock, (ii) such additional
voting rights as equal the Vote Multiple in effect immediately prior to
such Transaction multiplied by the additional voting rights which the
holder of a share of Common Stock shall be entitled to receive by virtue of
the receipt in the Transaction of such capital stock and (iii) such
additional distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior to
such Transaction multiplied by the additional amount which the holder of a
share of Common Stock shall be entitled to receive upon liquidation,
dissolution or winding up of the Company by virtue of the receipt in the
Transaction of such capital stock, as the case may be, all as provided by
the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the Company
receive after the Effective Date in respect of their shares of Common Stock
any right or warrant to purchase Common Stock (including as such a right,
for all purposes of this paragraph, any security convertible into or
exchangeable for Common Stock) at a purchase price per share less than the
Fair Market Value of a share of Common Stock on the date of issuance of
such right or warrant, then and in each such event the dividend rights,
voting rights and rights upon the liquidation, dissolution or winding up of
the Company of the shares of Series A Preferred Stock shall each be
adjusted so that after such event the Dividend Multiple, the Vote Multiple
and the Liquidation Multiple shall each be the product of the Dividend
Multiple, the Vote Multiple and the Liquidation Multiple, as the case may
be, in effect immediately prior to such event multiplied by a fraction the
numerator of which shall be the number of shares of Common Stock
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outstanding immediately before such issuance of rights or warrants plus the
maximum number of shares of Common Stock which could be acquired upon
exercise in full of all such rights or warrants and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
before such issuance of rights or warrants plus the number of shares of
Common Stock which could be purchased, at the Fair Market Value of the
Common Stock at the time of such issuance, by the maximum aggregate
consideration payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of the Company
receive after the Effective Date in respect of their shares of Common Stock
any right or warrant to purchase capital stock of the Company (other than
shares of Common Stock), including as such a right, for all purposes of
this paragraph, any security convertible into or exchangeable for capital
stock of the Company (other than Common Stock), at a purchase price per
share less than the Fair Market Value of such shares of capital stock on
the date of issuance of such right or warrant, then and in each such event
the dividend rights, voting rights and rights upon liquidation, dissolution
or winding up of the Company of the shares of Series A Preferred Stock
shall each be adjusted so that after such event each holder of a share of
Series A Preferred Stock shall be entitled, in respect of each share of
Series A Preferred Stock held, in addition to such rights in respect
thereof to which such holder was entitled immediately prior to such event,
to receive (i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such event multiplied, first, by the additional
dividends to which the holder of a share of Common Stock shall be entitled
upon exercise of such right or warrant by virtue of the capital stock which
could be acquired upon such exercise and multiplied again by the Discount
Fraction (as hereinafter defined) and (ii) such additional voting rights as
equal the Vote Multiple in effect immediately prior to such event
multiplied, first, by the additional voting rights to which the holder of a
share of Common Stock shall be entitled upon exercise of such right or
warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction and (iii) such
additional distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior to
such event multiplied, first, by the additional amount which the holder of
a share of Common Stock shall be entitled to receive upon liquidation,
dissolution or winding up of the Company upon exercise of such right or
warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator
of which shall be the difference between the Fair Market Value of a share
of the capital stock subject to a right or warrant distributed to holders
of shares of Common Stock of the Company as contemplated by this paragraph
immediately after the distribution thereof and the purchase price per share
for such share of capital stock pursuant to such right or warrant and the
denominator of which shall be the Fair Market Value of a share of such
capital stock immediately after the distribution of such right or warrant.
(D) For purposes of this Certificate of Designations, the "Fair Market
Value" of a share of capital stock of the Company (including a share of
Common Stock) on any date shall be deemed to be the average of the daily
closing price per share thereof over the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date; provided,
however, that, in the event that such Fair Market Value of any such share
of capital stock is determined during a period which includes any date that
is within 30 Trading Days after
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(i) the ex-dividend date for a dividend or distribution on stock payable in
shares of such stock or securities convertible into shares of such stock,
or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then,
and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. The closing price for any day
shall be the last sale price, regular way, or, in case, no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way (in either case, as reported in the applicable transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange), or, if the shares are not listed or admitted to
trading on the New York Stock Exchange, as reported in the applicable
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares are listed or
admitted to trading or, if the shares are not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such
other system then in use, or if on any such date the shares are not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the shares
selected by the Board of Directors of the Company. The term "Trading Day"
shall mean a day on which the principal national securities exchange on
which the shares are listed or admitted to trading is open for the
transaction of business or, if the shares are not listed or admitted to
trading on any national securities exchange, on which the New York Stock
Exchange or such other national securities exchange as may be selected by
the Board of Directors of the Company is open. If the shares are not
publicly held or not so listed or traded on any day within the period of 30
Trading Days applicable to the determination of Fair Market Value thereof
as aforesaid, "Fair Market Value" shall mean the fair market value thereof
per share as determined in good faith by the Board of Directors of the
Company. In either case referred to in the foregoing sentence, the
determination of Fair Market Value shall be described in a statement filed
with the Secretary of the Company.
Section 8. Consolidation, Merger, etc. In case the Company shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each outstanding share of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into the aggregate amount of stock, securities, cash and/or other
property (payable in like kind), as the case may be, for which or into which
each share of Common Stock is changed or exchanged multiplied by the highest of
the Vote Multiple, the Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.
Section 9. Effective Time of Adjustments.
(A) Adjustments to the Series A Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each holder of a
share of Series A Preferred Stock of the effect of any adjustment to the
voting rights, dividend rights or rights upon liquidation, dissolution or
winding up of the Company of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the Company to give
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such notice shall not affect the validity of or the force or effect of or
the requirement for such adjustment.
Section 10. No Redemption. The shares of Series A Preferred Stock shall not
be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
provisions hereof and the Certificate of Incorporation of the Company.
Section 11. Ranking. Unless otherwise provided in the Certificate of
Incorporation of the Company or a Certificate of Designations relating to a
subsequent series of preferred stock of the Company, the Series A Preferred
Stock shall rank junior to all other series of the Company's preferred stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.
Section 12. Amendment. After the Distribution Date (as defined in the
Rights Agreement), the provisions hereof and the Certificate of Incorporation of
the Company shall not be amended in any manner which would adversely affect the
rights, privileges or powers of the Series A Preferred Stock without, in
addition to any other vote of stockholders required by law, the affirmative vote
of the holders of two-thirds or more of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
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IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designations and do affirm the foregoing as true under the penalties of perjury
this 12th day of April, 2000.
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Name:
Title:
ATTEST:
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