SHAREHOLDER PROTECTION RIGHTS AGREEMENT dated as of January 14, 2010 between KRISPY KREME DOUGHNUTS, INC. and AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC as Rights Agent
dated as
of
January 14,
2010
between
KRISPY KREME
DOUGHNUTS, INC.
and
AMERICAN STOCK
TRANSFER & TRUST COMPANY, LLC
as Rights
Agent
Table of
Contents
| Page | |||
| ARTICLE I | |||
| DEFINITIONS | |||
| 1.1 | Definitions | 3 | |
| ARTICLE II | |||
| THE RIGHTS | |||
| 2.1 | Summary of Rights | 12 | |
| 2.2 | Legend on Common Stock Certificates | 12 | |
| 2.3 | Exercise of Rights; Separation of Rights | 13 | |
| 2.4 | Adjustments to Exercise Price; Number of Rights | 18 | |
| 2.5 | Date on Which Exercise is Effective | 20 | |
| 2.6 | Execution, Authentication, Delivery and Dating of Rights Certificates | 20 | |
| 2.7 | Registration, Registration of Transfer and Replacement | 21 | |
| 2.8 | Mutilated, Destroyed, Lost and Stolen Rights Certificates | 22 | |
| 2.9 | Persons Deemed Owners | 24 | |
| 2.10 | Delivery and Cancellation of Certificates | 24 | |
| 2.11 | Agreement of Rights Holders | 25 | |
| ARTICLE III | |||
| ADJUSTMENTS TO THE RIGHTS IN | |||
| THE EVENT OF CERTAIN TRANSACTIONS | |||
| 3.1 | Flip-in | 26 | |
| 3.2 | Flip-over | 31 | |
| ARTICLE IV | |||
| THE RIGHTS AGENT | |||
| 4.1 | General | 32 | |
| 4.2 | Merger or Consolidation or Change of Name of Rights Agent | 33 | |
| 4.3 | Duties of Rights Agent | 35 | |
| 4.4 | Change of Rights Agent | 38 | |
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|
ARTICLE V
|
|||
|
MISCELLANEOUS
|
|||
| 5.1 | Redemption | 39 | |
| 5.2 | Expiration | 40 | |
| 5.3 | Issuance of New Rights Certificates | 40 | |
| 5.4 | Supplements and Amendments | 41 | |
| 5.5 | Fractional Shares | 41 | |
| 5.6 | Rights of Action | 42 | |
| 5.7 | Holder of Rights Not Deemed a Shareholder | 42 | |
| 5.8 | Notice of Proposed Actions | 43 | |
| 5.9 | Notices | 43 | |
| 5.10 | Suspension of Exercisability or Exchangeability | 44 | |
| 5.11 | Costs of Enforcement | 45 | |
| 5.12 | Successors | 45 | |
| 5.13 | Benefits of this Agreement | 45 | |
| 5.14 | Determination and Actions by the Board of Directors, etc. | 46 | |
| 5.15 | Descriptive Headings; Section References | 46 | |
| 5.16 | Governing Law; Exclusive Jurisdiction | 46 | |
| 5.17 | Counterparts | 48 | |
| 5.18 | Severability | 48 | |
|
EXHIBITS
|
||
| Exhibit A | Form of Rights Certificate (together with Form of Election to Exercise) | |
| Exhibit B | Articles of Amendment | |
-ii-
SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time,
this “Agreement”), dated as of January 14, 2010, between KRISPY KREME DOUGHNUTS,
INC., a North Carolina corporation (the “Company”), and AMERICAN STOCK TRANSFER
& TRUST COMPANY, as Rights Agent (the “Rights Agent”, which term shall
include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Rights Agreement (the “Existing Rights Agreement”), dated as
of January 18, 2000, between the Company and the Rights Agent will expire on the
close of business on January 18, 2010;
WHEREAS, the Company is entering into this
Agreement, which will become effective immediately upon the expiration of the
Existing Rights Agreement;
WHEREAS, the Board of Directors of the
Company has (a) authorized and declared a dividend of one right (“Right”) in
respect of each share of Common Stock (as hereinafter defined) held of record as
of the Close of Business (as hereinafter defined) on January 18, 2010 (the
“Record Time”) payable in respect of each such share upon certification by the
New York Stock Exchange (“NYSE”) to the Securities and Exchange Commission that
the Rights have been approved for listing and registration (the “Payment Time”)
and (b) as provided in Section 2.4, authorized the issuance of one Right in
respect of each share of Common Stock issued after the Record Time and prior to
the Separation Time (as hereinafter defined) and, to the extent provided in
Section 5.3, each share of Common Stock issued after the Separation
Time;
WHEREAS, subject to the terms and conditions hereof, each Right entitles
the holder thereof, after the Separation Time, to purchase securities or assets
of the Company (or, in certain cases, securities of certain other entities)
pursuant to the terms and subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the
Rights Agent to act on behalf of the Company, and the Rights Agent is willing so
to act, in connection with the issuance, transfer, exchange and replacement of
Rights Certificates (as hereinafter defined), the exercise of Rights and other
matters referred to herein;
NOW THEREFORE, in consideration of the
premises and the respective agreements set forth herein, the parties hereby
agree as follows:
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ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
“Acquiring Person” shall mean any Person
who is, as of the expiration of the Existing Rights Plan, or thereafter becomes,
the Beneficial Owner of 15% or more of the outstanding shares of Common
Stock; provided, however, that the term “Acquiring Person” shall not
include any Person (i) who is the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock as of the expiration of the Existing Rights
Plan who continuously thereafter is the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock, or who shall become the Beneficial Owner of
15% or more of the outstanding shares of Common Stock solely as a result of an
acquisition by the Company of shares of Common Stock, until such time thereafter
as such Person shall become the Beneficial Owner (other than by means of
a stock dividend, stock split or reclassification) of additional shares of
Common Stock that, in the aggregate, amount to 0.1% or more of the outstanding
shares of Common Stock while such Person is, or as a result of which such Person
becomes, the Beneficial Owner of 15% or more of the outstanding shares of Common
Stock, (ii) who becomes the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock but who acquired Beneficial Ownership of shares of Common
Stock without any plan or intention to seek or affect control of the Company, if
such Person promptly divests, or promptly enters into an agreement with, and
satisfactory to, the Board of Directors of the Company, in the Board’s sole
discretion, to divest, and subsequently does divest in accordance with the terms
of such agreement (without exercising or retaining any power, including voting
power, with respect to such shares), sufficient shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for Common Stock)
so that such Person ceases to be the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock or (iii) who Beneficially Owns shares of
Common Stock consisting solely of one or more of (A) shares of Common Stock
Beneficially Owned pursuant to the grant or exercise of an option granted to
such Person (an “Option Holder”) by the Company in connection with an agreement
to merge with, or acquire, the Company entered into prior to a Flip-in Date, (B)
shares of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) Beneficially Owned by such Option Holder or its
Affiliates or Associates at the time of grant of such option, and (C) shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) acquired by Affiliates or Associates of such Option Holder
after the time of such grant that, in the aggregate, amount to less than 1% of
the outstanding shares of Common Stock. In addition, the Company, any Subsidiary
of the Company and any employee stock ownership or other employee benefit plan
of the Company or a Subsidiary of the Company (or any entity or trustee holding
shares of Common Stock for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company) shall not be an
Acquiring Person.
-3-
“Affiliate” and “Associate” shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Exchange Act, as such Rule is in effect on
the date of this Agreement.
“Agreement” shall have the meaning set
forth in the Preamble.
A Person shall be deemed the “Beneficial Owner”, and to have “Beneficial
Ownership” of, and to “Beneficially Own”, (i) any securities as to which such
Person or any of such Person’s Affiliates or Associates is or may be deemed to
be the beneficial owner pursuant to Rule 13d-3 and 13d-5 under the Exchange Act,
as such Rules are in effect on the date of this Agreement and (ii) any
securities as to which such Person or any of such Person’s Affiliates or
Associates has the right to become the beneficial owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed the
“Beneficial Owner”, or to have “Beneficial Ownership” of, or to “Beneficially
Own”, any security (A) solely because such security has been tendered pursuant
to a tender or exchange offer made by such Person or any of such Person’s
Affiliates or Associates until such tendered security is accepted for payment or
exchange or (B) solely because such Person or any of such Person’s Affiliates or
Associates has or shares the power to vote or direct the voting of such security
pursuant to a revocable proxy or consent given in response to a public proxy or
consent solicitation made to more than ten holders of shares of a class of stock
of the Company registered under Section 12 of the Exchange Act and pursuant to,
and in accordance with, the applicable rules and regulations under the Exchange
Act, unless such power (or the arrangements relating thereto) is then reportable
under Item 6 of Schedule 13D under the Exchange Act (or any similar provision of
a comparable or successor report). For purposes of this Agreement, in
determining the percentage of the outstanding shares of Common Stock with
respect to which a Person is the Beneficial Owner, all shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
-4-
“Business Day” shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the State of New York are generally authorized
or obligated by law or executive order to close.
“Close of Business” on any given date shall mean 5:00 p.m. Winston-Salem,
North Carolina time on such date or, if such date is not a Business Day, 5:00
p.m. Winston-Salem, North Carolina time on the next succeeding Business
Day.
“Common Stock” shall mean the shares of
Common Stock, no par value, of
the Company.
-5-
“Company” shall have the meaning set forth
in the preamble.
“Election to Exercise” shall have the meaning set forth in Section
2.3(d).
“Exchange Act” shall mean the Securities
Exchange Act of 1934, as amended.
“Exchange Ratio” shall have the meaning set forth in Section 3.1(c).
“Exchange Time” shall mean the time at
which the right to exercise the Rights shall terminate pursuant to Section
3.1(c).
“Exercise Price” shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $13.50.
“Expansion Factor” shall have the meaning set forth in Section 2.4(a).
“Expiration Time” shall mean the earliest
of (i) the Exchange Time, (ii) the Redemption Time, (iii) the Close of Business
on the third anniversary of the date of this Agreement and (iv) immediately
prior to the effective time of a consolidation, merger or statutory share
exchange in which the Common Stock is converted into, or into the right to
receive, another security, cash or other consideration that does not constitute
a Flip-over Transaction or Event.
“Flip-in Date” shall mean any Stock Acquisition Date or such later date
and time as the Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Flip-in Date that would otherwise have
occurred.
-6-
“Flip-over
Entity,” for purposes of Section 3.2, shall mean (i) in the case of a Flip-over
Transaction or Event described in clause (i) of the definition thereof, the
Person issuing any securities into which shares of Common Stock are being
converted or exchanged and, if no such securities are being issued, the
other Person that is a party to such Flip-over Transaction or Event and (ii) in
the case of a Flip-over Transaction or Event referenced in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the (A) assets
or (B) operating income or cash flow being transferred in such Flip-over
Transaction or Event, provided in all cases if such Person is a Subsidiary of
another Person, the ultimate parent entity of such Person shall be the Flip-over
Entity.
“Flip-over Stock” shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other Persons similarly responsible for the direction of the business and
affairs) of the Flip-over Entity.
-7-
“Flip-over
Transaction or Event” shall mean a transaction or series of transactions, on or
after a Flip-in Date, in which, directly or indirectly, (i) the Company shall
consolidate or merge or participate in a statutory share exchange with any other
Person if, immediately prior to the time of consummation of the consolidation,
merger or statutory share exchange or at the time the Company enters into any
agreement with respect to any such consolidation, merger or statutory share
exchange, the Acquiring Person is the Beneficial Owner of 90% or more of the
outstanding shares of Common Stock or controls the Board of Directors of the
Company and either (A) any term of or arrangement concerning the treatment of
shares of capital stock in such consolidation, merger or statutory share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of the Common Stock or (B) the Person
with whom the transaction or series of transactions occurs is the Acquiring
Person or an Affiliate or Associate of the Acquiring Person or (ii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer) assets (A) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (B) generating more than
50% of the operating income or cash flow, of the Company and its Subsidiaries
(taken as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons that are Affiliates or
Associates or otherwise acting in concert, if, at the time of the entry by the
Company (or any such Subsidiary) into an agreement with respect to such sale or
transfer of assets, the Acquiring Person or any of its Affiliates or Associates
controls the Board of Directors of the Company. For purposes of the foregoing
description, the term “Acquiring Person” shall include any Acquiring Person and
its Affiliates and Associates, counted together as a single Person. An Acquiring
Person shall be deemed to control the Company’s Board of Directors when, on or
following a Stock Acquisition Date, the persons who were directors of the
Company (or persons nominated and/or appointed as directors by vote of a
majority of such persons) before the Stock Acquisition Date shall cease to
constitute a majority of the Company’s Board of Directors.
-8-
“Market Price”
per share of any securities on any date shall mean the average of the daily
closing prices per share of such securities (determined as described below) on
each of the 20 consecutive Trading Days through and including the Trading Day
immediately preceding such date; provided, however, that if any event described in Section 2.4,
or any analogous event, shall have caused the closing prices used to determine
the Market Price on any Trading Days during such period of 20 Trading Days not
to be fully comparable with the closing price on such date, each such closing
price so used shall be appropriately adjusted by the Board of Directors of the
Company in order to make it fully comparable with the closing price on
such date. The closing price per share of any securities on any date shall be
the last reported sale price, regular way, or, in case no such sale takes place
or is quoted on such date, the average of the closing bid and asked prices,
regular way, for each share of such securities, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the NYSE or, if the securities are not listed on the NYSE,
as reported on the NASDAQ Stock Market or, if the securities are not listed on
the NASDAQ Stock Market, as reported in the principal consolidated transaction
reporting system with respect to the principal national securities exchange on
which the securities are listed or admitted to trading or, if the securities are
not listed or admitted to trading on any national securities exchange, as
reported by such other quotation system then in use or, if on any such date the
securities are not listed or admitted to trading on any national securities
exchange or quoted by any such quotation system, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the securities selected by the Board of Directors of the Company; provided, however, that if on any such date the securities are
not listed or admitted to trading on a national securities exchange or traded in
the over-the-counter market, the closing price per share of such securities on
such date shall mean the fair value per share of such securities on such date as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm, and set forth
in a certificate delivered to the Rights Agent.
“NYSE” shall have the meaning set forth in
the recitals.
-9-
“Option Holder” shall have the meaning set
forth in the definition of Acquiring Person.
“Payment Time” shall have the meaning set forth in the Recitals.
“Person” shall mean any individual, firm,
partnership, limited liability company, trust, association, group (as such term
is used in Rule 13d-5 under the Exchange Act, as such Rule is in effect on the
date of this Agreement), corporation or other entity.
“Preferred Stock” shall mean the series of Participating Preferred Stock,
no par value, of the Company created by the Articles of Amendment in
substantially the form set forth in Exhibit B hereto appropriately
completed.
“Record Time” shall have the meaning set forth in the Recitals.
“Redemption Price” shall mean an amount
equal to one cent, $0.01.
“Redemption Time” shall mean the time at
which the right to exercise the Rights shall terminate pursuant to Section
5.1.
“Right” shall have the meaning set forth in
the Recitals.
“Rights Agent” shall have the meaning set forth in the Preamble.
“Rights Certificate” shall have the meaning
set forth in Section 2.3(c).
“Rights Register” shall have the meaning
set forth in Section 2.7(a).
-10-
“Separation Time” shall mean the next
Business Day following the earlier of (i) the tenth Business Day (or such later
date as the Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Separation Time that otherwise would have
occurred) after the date on which any Person commences a tender or exchange
offer that, if consummated, would result in such Person’s becoming an Acquiring
Person and (ii) the date of the first event causing a Flip-in Date to
occur; provided, that if the foregoing results in the
Separation Time being prior to the Record Time, the Separation Time shall be the
Record Time and provided further, that if any tender or exchange offer
referenced in clause (i) of this paragraph is cancelled, terminated or otherwise
withdrawn prior to the Separation Time without the purchase of any shares of
Common Stock pursuant thereto, such offer shall be deemed, for purposes of this
paragraph, never to have been made.
“Stock Acquisition Date” shall mean the earlier of (i) the first date on
which there shall be a public announcement by the Company (by any means) that a
Person has become an Acquiring Person, which announcement makes express
reference to such status as an Acquiring Person pursuant to this Agreement, or
(ii) the date on which any Acquiring Person becomes the Beneficial Owner of more
than 40% of the outstanding shares of Common Stock.
“Subsidiary” of any specified Person shall mean any corporation or other
entity of which a majority of the voting power of the equity securities or a
majority of the equity or membership interest is Beneficially Owned, directly or
indirectly, by such Person.
“Trading Day,” when used with respect to any securities, shall mean a day
on which the NYSE is open for the transaction of business or, if such securities
are not listed or admitted to trading on the NYSE, a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day.
-11-
“Trading Regulation” shall have the meaning
set forth in Section 2.3(c).
“Trust” shall have the meaning set forth in
Section 3.1(c).
“Trust Agreement” shall have the meaning
set forth in Section 3.1(c).
ARTICLE
II
THE
RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder’s address
as shown by the records of the Company.
2.2 Legend on Common Stock
Certificates. Certificates
for the Common Stock issued on or after the Payment Time but prior to the
Separation Time shall evidence one Right for each share of Common Stock
represented thereby and shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of January 14, 2010
(as such may be amended from time to time, the “Rights Agreement”), between
Krispy Kreme Doughnuts, Inc. (the “Company”) and American Stock Transfer &
Trust Company, as Rights Agent, the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may become exercisable for securities or
assets of the Company or securities of another entity, may be exchanged for
shares of Common Stock or other securities or assets of the Company, may expire,
may become null and void (including if they are “Beneficially Owned” by an
“Acquiring Person” or an Affiliate or Associate thereof, as such terms are
defined in the Rights Agreement, or by any transferee of any of the foregoing)
or may be evidenced by separate certificates and may no longer be evidenced by
this certificate. The Company will mail or arrange for the mailing of a copy of
the Rights Agreement to the holder of this certificate without charge after the
receipt of a written request therefor.
-12-
Certificates
representing shares of Common Stock that are issued and outstanding at the
Payment Time shall, together with the letter mailed pursuant to Section 2.1,
evidence one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.
If the Common Stock issued after the Payment Time but prior to the
Separation Time shall be uncertificated, the registration of such Common Stock
on the stock transfer books of the Company shall evidence one Right for each
share of Common Stock represented thereby and the Company shall mail to every
Person that holds such Common Stock a confirmation of the registration of such
Common Stock on the stock transfer books of the Company, which confirmation will
have impressed, printed, written or stamped thereon or otherwise affixed thereto
the above legend. The Company shall mail or arrange for the mailing of a copy of
this Agreement to any Person that holds Common Stock, as evidenced by the
registration of the Common Stock in the name of such Person on the stock
transfer books of the Company, without charge after the receipt of a written
request therefor.
2.3 Exercise of Rights; Separation of
Rights. (a) Subject to
Sections 3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each
Right will entitle the holder thereof, at or after the Separation Time and prior
to the Expiration Time, to purchase, for the Exercise Price, one one-hundredth
of a share of Preferred Stock.
-13-
(b) Until the Separation Time, (i) no Right may be exercised and (ii) each Right will be evidenced by the
certificate for the associated share of Common Stock (or, if the Common
Stock shall be uncertificated, by the registration of the associated Common
Stock on the stock transfer books of the Company and the confirmation thereof
provided for in Section 2.2), together, in the case of certificates issued prior
to the Payment Time, with the letter mailed to the record holder thereof
pursuant to Section 2.1, and will be transferable only together with, and will
be transferred by a transfer (whether with or without such letter or
confirmation) of, such associated share.
(c) Subject to the terms
and conditions hereof, at or after the Separation Time and prior to the
Expiration Time, the Rights (i) may be exercised pursuant to Section 2.3(d)
below; (ii) will be transferred independent of shares of Common Stock and (iii)
the Rights Agent will mail to each holder of record of Common Stock (provided
that the Board of Directors of the Company has not elected to exchange all of
the then outstanding Rights pursuant to Section 3.1(c)) as of the Separation
Time (other than any Person whose Rights have become void pursuant to Section
3.1(b)), at such holder’s address as shown by the records of the Company (the
Company hereby agreeing to furnish copies of such records to the Rights Agent
for this purpose), (x) a certificate (a “Rights Certificate”) in substantially
the form of Exhibit A hereto appropriately completed, representing the number of
Rights held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which the
Rights may from time to time be listed or traded (“Trading Regulation”), or to
conform to usage, and (y) a disclosure statement describing the Rights. Receipt
of a Rights Certificate by any Person shall not preclude a later determination
that such Rights are void pursuant to Section 3.1(b).
-14-
(d) Subject to the terms
and conditions hereof, Rights may be exercised on any Business Day at or after
the Separation Time and prior to the Expiration Time by submitting to the Rights
Agent the Rights Certificate evidencing such Rights with an Election to Exercise
(an “Election to Exercise”) substantially in the form attached to the Rights
Certificate duly executed and properly completed, accompanied by payment in
cash, or by certified or official bank check or money order payable to the order
of the Company, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
that may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates (or,
if uncertificated, the registration on the stock transfer books of the Company)
for shares or depositary receipts (or both) in a name other than that of the
holder of the Rights being exercised.
(e) Upon receipt of a
Rights Certificate, with an Election to Exercise accompanied by payment as set
forth in Section 2.3(d), and subject to the terms and conditions hereof, the
Rights Agent will thereupon promptly (i)(A) requisition from a transfer agent
stock certificates evidencing such number of shares or other securities to be
purchased or, in the case of uncertificated shares or other securities,
requisition from a transfer agent a notice setting forth such number of shares
or other securities to be purchased for which registration will be made on the
stock transfer books of the Company (the Company hereby irrevocably authorizing
its transfer agents to comply with all such requisitions), and (B) if the
Company elects pursuant to Section 5.5 not to issue certificates (or effect
registrations on the stock transfer books of the Company) representing
fractional shares, requisition from the depositary selected by the Company
depositary receipts representing the fractional shares to be purchased (the
Company hereby irrevocably authorizes each such depositary agent to comply with
such requisitions) or, when necessary to comply with this Agreement, requisition
from the Company the amount of cash to be paid in lieu of fractional shares in
accordance with Section 5.5 and (ii) after receipt of such certificates,
depositary receipts, notices and/or cash, deliver the same to or upon the order
of the registered holder of such Rights Certificate, registered (in the case of
certificates, depositary receipts or notices) in such name or names as may be
designated by such holder.
-15-
(f) In case the holder of
any Rights shall exercise less than all of the Rights evidenced by such holder’s
Rights Certificate, a new Rights Certificate evidencing the Rights remaining
unexercised will be issued by the Rights Agent to such holder or to such
holder’s duly authorized assigns.
(g) The Company covenants
and agrees that it will (i) take all such action as may be necessary to ensure
that all shares delivered (or evidenced by registration on the stock transfer
books of the Company) upon exercise of Rights shall, at the time of delivery of
the certificates (or registration) for such shares (subject to payment of the
Exercise Price), be duly and validly authorized, executed, issued and delivered
(or registered) and fully paid and nonassessable; (ii) take all such action as
may be necessary to comply with any applicable requirements of the Securities
Act of 1933, as amended or the Exchange Act, and the rules and regulations
thereunder, and any other applicable law, rule or regulation, in connection with
the issuance of any shares upon exercise of Rights; and (iii) pay when due and
payable any and all federal and state transfer taxes and charges that may be
payable in respect of the original issuance or delivery of the Rights
Certificates or of any shares issued upon the exercise of Rights,
provided, that the Company shall not be required to
pay any transfer tax or charge that may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates (or the registration) for shares in a name other than
that of the holder of the Rights being transferred or
exercised.
-16-
(h) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to the exercise
or assignment of a Rights Certificate unless the registered holder of such
Rights Certificate shall have (i) properly completed and duly signed the
certificate following the form of assignment or the form of election to
exercise, as applicable, set forth on the reverse side of the Rights Certificate
surrendered for such exercise or assignment. (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
thereof and of the Rights evidenced thereby, and the Affiliates and Associates
of such Beneficial Owner or former Beneficial Owner, as the Company or the
Rights Agent may reasonably request and (iii) paid a sum sufficient to cover any
tax or charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates as required under Section 2.3(d)
hereof.
-17-
2.4 Adjustments to Exercise Price; Number of
Rights. (a) In the event
the Company shall at any time after the Record Time and prior to the Separation
Time (i) declare or pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock, (x) the Exercise Price in
effect after such adjustment will be equal to the Exercise Price in effect
immediately prior to such adjustment divided by the number of shares of Common
Stock including any fractional shares in lieu of which such holder received cash
(the “Expansion Factor”) that a holder of one share of Common Stock immediately
prior to such dividend, subdivision or combination would hold thereafter as a
result thereof and (y) each Right held prior to such adjustment will become that
number of Rights equal to the Expansion Factor, and the adjusted number of
Rights will be deemed to be distributed among the shares of Common Stock with
respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend, subdivision or
combination, so that each such share of Common Stock will have exactly one Right
associated with it. Each adjustment made pursuant to this paragraph shall be
made as of the payment or effective date for the applicable dividend,
subdivision or combination.
In the event that the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referenced in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share (or, if the
Common Stock shall be uncertificated, such Right shall be evidenced by the
registration of such Common Stock on the stock transfer books of the Company and
the confirmation thereof provided for in Section 2.2). Rights shall be issued by
the Company in respect of shares of Common Stock that are issued or sold by the
Company after the Separation Time only to the extent provided in Section
5.3.
-18-
(b) In the event that the
Company shall at any time after the Record Time and prior to the Separation Time
issue or distribute any securities or assets in respect of, in lieu of or in
exchange for Common Stock (other than pursuant to any non-extraordinary periodic
cash dividend or a dividend paid solely in Common Stock) whether by dividend, in
a reclassification or recapitalization (including any such transaction involving
a merger, consolidation or statutory share exchange), or otherwise, the Company
shall make such adjustments, if any, in the Exercise Price, number of Rights
and/or securities or other property purchasable upon exercise of Rights as the
Board of Directors of the Company, in its sole discretion, may deem to be
appropriate under the circumstances in order to adequately protect the interests
of the holders of Rights generally, and the Company and the Rights Agent shall
amend this Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the
Exercise Price made pursuant to this Section 2.4 shall be calculated to the
nearest cent. Whenever an adjustment to the Exercise Price is made pursuant to
this Section 2.4, the Company shall (i) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for such
adjustment and (ii) promptly file with the Rights Agent and with each transfer
agent for the Common Stock a copy of such certificate.
-19-
(d) Rights Certificates
shall represent the right to purchase the securities purchasable under the terms
of this Agreement, including any adjustment or change in the securities
purchasable upon exercise of the Rights, even though such certificates may
continue to express the securities purchasable at the time of issuance of the
initial Rights Certificates.
2.5 Date on Which Exercise is
Effective. Each Person in
whose name any certificate for shares is issued (or registration on the stock
transfer books is effected) upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the shares represented thereby
on the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate (or registration) shall be dated, the next succeeding
Business Day on which the stock transfer books of the Company are
open.
2.6 Execution, Authentication, Delivery and Dating
of Rights Certificates. (a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the Board, Chief Executive
Officer, President or one of its Vice Presidents and by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the
countersignature and delivery of such Rights Certificates.
-20-
Promptly after the Separation Time, the Company will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by
the Company to the Rights Agent for countersignature, and, subject to Section
3.1(b), the Rights Agent shall manually or by facsimile countersign and deliver
such Rights Certificates to the holders of the Rights pursuant to Section
2.3(c). No Rights Certificate shall be valid for any purpose unless manually or
by facsimile countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and
Replacement. (a) After the
Separation Time, the Company will cause to be kept a register (the “Rights
Register”) in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed “Rights Registrar” for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation
Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or replacement of any Rights Certificate,
and subject to the provisions of Sections 2.7(c) and (d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder’s instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so
surrendered.
-21-
(b) Except as otherwise
provided in Section 3.1(b), all Rights issued upon any registration of transfer
or replacement of Rights Certificates shall be the valid obligations of the
Company, and such Rights shall be entitled to the same benefits under this
Agreement as the Rights surrendered upon such registration of transfer or
exchange.
(c) Every Rights
Certificate surrendered for registration of transfer or replacement shall be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company or the Rights Agent, as the case may be, duly
executed by the holder thereof or such holder’s attorney duly authorized in
writing. As a condition to the issuance of any new Rights Certificate under this
Section 2.7, the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation
thereto.
(d) The Company shall not
register the transfer or replacement of any Rights that have become null and
void under Section 3.1(b), been exchanged under Section 3.1(c) or been redeemed
under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates. (a) If any
mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company
shall execute and the Rights Agent shall countersign and deliver in replacement
therefor a new Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so surrendered.
-22-
(b) If there shall be
delivered to the Company and the Rights Agent prior to the Expiration Time (i)
evidence to their satisfaction of the destruction, loss or theft of any Rights
Certificate and (ii) such security or indemnity as may be required by them to
save each of them and any of their agents harmless, then, subject to Sections
3.1(b), 3.1(c) and 5.1 and in the absence of notice to the Company or the Rights
Agent that such Rights Certificate has been acquired by a bona fide or protected purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the
issuance of any new Rights Certificate under this Section 2.8, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Rights Agent) connected therewith.
(d) Every new Rights
Certificate issued pursuant to this Section 2.8 in lieu of any destroyed, lost
or stolen Rights Certificate shall evidence an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Rights
Certificate shall be at any time enforceable by anyone, and, subject to Section
3.1(b) shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Rights duly issued
hereunder.
-23-
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate or notice of transfer, if uncertificated) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the Person in whose name such Rights Certificate
(or, prior to the Separation Time, such Common Stock certificate or Common Stock
registration, if uncertificated) is registered as the absolute owner thereof and
of the Rights evidenced thereby for all purposes whatsoever, including the
payment of the Redemption Price, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary. As used in this Agreement,
unless the context otherwise requires, the term “holder” of any Rights shall
mean the registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
2.10 Delivery and Cancellation of
Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any Person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder that the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Company.
-24-
2.11 Agreement of Rights Holders. Every holder of Rights by accepting the same
consents and agrees with the Company and the Rights Agent and with every other
holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
(b) after the Separation
Time, the Rights Certificates will be transferable only on the Rights Register
as provided herein;
(c) prior to due
presentment of a Rights Certificate (or, prior to the Separation Time, the
associated Common Stock certificate or Common Stock registration, if
uncertificated) for registration of transfer, the Company, the Rights Agent and
any agent of the Company or the Rights Agent may deem and treat the Person in
whose name the Rights Certificate (or, prior to the Separation Time, the
associated Common Stock certificate or Common Stock registration, if
uncertificated) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary;
(d) Rights Beneficially
Owned by certain Persons will, under the circumstances set forth in Section
3.1(b), become null and void;
(e) this Agreement may be supplemented or amended from time to time in
accordance with its terms; and
(f) the Board of Directors
of the Company shall have the exclusive power and authority delegated to it
pursuant to Section 5.14.
-25-
ARTICLE
III
ADJUSTMENTS TO THE
RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the
Expiration Time a Flip-in Date shall occur, then, except as otherwise provided
in this Section 3.1, each Right shall constitute the right to purchase from the
Company, upon exercise thereof in accordance with the terms hereof (but subject
to Section 5.10), that number of shares of Common Stock having an aggregate
Market Price on the Stock Acquisition Date that gave rise to the Flip-in Date
equal to twice the Exercise Price for an amount in cash equal to the Exercise
Price (such right to be appropriately adjusted in order to protect the interests
of the holders of Rights generally in the event that on or after such Stock
Acquisition Date any of the events described in Section 2.4(a) or (b), or any
analogous event, shall have occurred with respect to the Common
Stock).
(b) Notwithstanding the
foregoing, any Rights that are Beneficially Owned on the Stock Acquisition Date
by an Acquiring Person or an Affiliate or Associate thereof shall become null
and void and any holder of such Rights (including transferees, whether direct or
indirect, of any such Persons) shall thereafter have no right to exercise or
transfer such Rights under any provision of this Agreement. If any Rights
Certificate is presented for assignment or exercise and the Person presenting
the same will not complete the certification set forth at the end of the form of
assignment or notice of election to exercise or, if requested, will not provide
such additional evidence, including, without limitation, the identity of the
Beneficial Owners and their Affiliates and Associates (or former Beneficial
Owners and their Affiliates and Associates) as the Company or the Board of
Directors of the Company shall reasonably request in order to determine if such
Rights are null and void, then the Company shall be entitled conclusively to
deem the Rights to be Beneficially Owned by an Acquiring Person or an Affiliate
or Associate thereof or a transferee of any of the foregoing and accordingly
deem the Rights evidenced thereby to be null and void and not transferable,
exercisable or exchangeable.
-26-
(c) The Board of Directors
of the Company may, at its option, at any time after a Flip-in Date, and prior
to the time that an Acquiring Person becomes the Beneficial Owner of more than
50% of the outstanding Common Stock, elect to exchange all (but not less than
all) of the then outstanding Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 3.1(b)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that after the Separation Time any of the events
described in Section 2.4(a) or (b), or any analogous event, shall have occurred
with respect to the Common Stock (such exchange ratio, as adjusted from time to
time, being hereinafter referred to as the “Exchange Ratio”).
-27-
Immediately upon
the action of the Board of Directors of the Company electing to exchange the
Rights, without any further action and without any notice, the right to exercise
the Rights will terminate and each Right (other than Rights that have become
null and void pursuant to Section 3.1(b)), whether or not previously exercised,
will thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. The exchange of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Promptly after the action of the Board of Directors electing to exchange the
Rights, the Company shall give notice thereof (specifying the steps to be taken
to receive shares of Common Stock in exchange for Rights) to the Rights Agent
and the holders of the Rights (other than Rights that have become void pursuant
to Section 3.1(b)) outstanding immediately prior thereto by mailing such notice
in accordance with Section 5.9. Before effecting an exchange pursuant to this
Section 3.1(c), the Board of Directors may direct the Company to enter into a
Trust Agreement in such form and with such terms as the Board of Directors shall
then approve (the “Trust Agreement”). If the Board of Directors so directs, the
Company shall enter into the Trust Agreement and shall issue to the trust
created by such agreement (the “Trust”) all or some (as designated by the Board
of Directors) of the shares of Common Stock (or other securities) issuable
pursuant to the exchange, and all or some (as designated by the Board of
Directors) holders of Rights entitled to receive shares pursuant to the exchange
shall be entitled to receive such shares (and any dividends paid or
distributions made thereon after the date on which such shares are deposited in
the Trust) only from the trust and solely upon compliance with the relevant
terms and provisions of the Trust Agreement. Prior to effecting an exchange and
registering shares of Common Stock (or other such securities) in any Person’s
name, including any nominee or transferee of a Person, the Company may require
(or cause the trustee of the Trust to require), as a condition thereof, that any
holder of Rights provide evidence, including, without limitation, the identity
of the Beneficial Owners thereof and their Affiliates and Associates (or former
Beneficial Owners thereof and their Affiliates and Associates) as the Company
shall reasonably request in order to determine if such Rights are void. If any
Person shall fail to comply with such request, the Company shall be entitled
conclusively to deem the Rights formerly held by such Person to be void pursuant
to Section 3.1(b) and not transferable or exerciseable or exchangeable in
connection herewith. Any shares of Common Stock or other securities issued at
the direction of the Board in connection herewith shall be validly issued, fully
paid and nonassessable shares of Common Stock or of such other securities (as
the case may be), and the Company shall be deemed to have received as
consideration for such issuance a benefit having a value that is at least equal
to the aggregate par value of the shares so issued. Approval by the Board of
Directors of this Agreement shall constitute a determination by the Board that
such consideration is adequate.
-28-
Each Person in whose name any certificate for shares is issued (or for
whom any registration on the stock transfer books of the Company is made) upon
the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall
for all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate (or registration on the stock
transfer books of the Company) shall be dated (or registered as of), the date
upon which the Rights Certificate evidencing such Rights was duly exchanged or
deemed exchanged by the Company) and payment of any applicable taxes and other
governmental charges payable by the holder was made; provided, however, that if the date of such exchange and
payment is a date upon which the stock transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate (or registration on the stock transfer books of the
Company) shall be dated (or registered as of), the next succeeding Business Day on which the stock
transfer books of the Company are open.
-29-
(d) Whenever the Company shall become obligated under Section 3.1(a) or (c) to issue shares of
Common Stock upon exercise of or in exchange for Rights, the Company, as
determined by the Board of Directors of the Company, may substitute therefor
shares of Preferred Stock, at a ratio of one one-hundredth of a share of
Preferred Stock for each share of Common Stock so issuable, subject to
adjustment.
(e) In the event that
there shall not be sufficient authorized but unissued shares of Common Stock or
Preferred Stock of the Company to permit the exercise in full of the Rights in
accordance with Section 3.1(a) or if the Company so elects to make the exchange
referenced in Section 3.1(c), to permit the issuance of all shares pursuant to
the exchange, the Company shall either (i) call a meeting of shareholders
seeking approval to cause sufficient additional shares to be authorized
(provided that if such approval is not obtained the Company will take the action
specified in clause (ii) of this sentence) or (ii) take such action as shall be
or necessary to ensure and provide, as and when and to the maximum extent
permitted by applicable law and any agreements or instruments in effect on the
Stock Acquisition Date (and remaining in effect) to which it is a party, that
each Right shall thereafter constitute the right to receive, (x) in the case of
any exercise in accordance with Section 3.1(a), at the Company’s option, either
(A) in return for the Exercise Price, debt or equity securities or other assets
(or a combination thereof) having a fair value equal to twice the Exercise
Price, or (B) without payment of consideration (except as may be required for
the valid issuance of securities or otherwise required by applicable law), debt
or equity securities or other assets (or a combination thereof) having a fair
value equal to the Exercise Price, or (y) in the case of an exchange of Rights
in accordance with Section 3.1(c), debt or equity securities or other assets (or
a combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-in Date times the Exchange Ratio in
effect on the Flip-in Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
-30-
3.2 Flip-over. (a) Prior to the Expiration Time, the
Company shall not enter into any agreement with respect to, consummate or permit
to occur any Flip-over Transaction or Event unless and until it shall have
entered into a supplemental agreement with the Flip-over Entity, for the benefit
of the holders of the Rights (the terms of which shall be reflected in an
amendment to this Agreement entered into with the Rights Agent), providing that,
upon consummation or occurrence of the Flip-over Transaction or Event (i) each
Right shall thereafter constitute the right to purchase from the Flip-over
Entity, upon exercise thereof in accordance with the terms hereof, that number
of shares of Flip-over Stock of the Flip-over Entity having an aggregate Market
Price on the date of consummation or occurrence of such Flip-over Transaction or
Event equal to twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that after such date
of consummation or occurrence any of the events described in Section 2.4(a) or
(b), or any analogous event, shall have occurred with respect to the Flip-over
Stock) and (ii) the Flip-over Entity shall thereafter be liable for, and shall
assume, by virtue of such Flip-over Transaction or Event and such supplemental
agreement, all the obligations and
duties of the Company pursuant to this Agreement.
-31-
(b) Prior to the
Expiration Time, unless the Rights will be redeemed pursuant to Section 5.1
pursuant to an agreement entered into by the Company prior to a Flip-in Date,
the Company shall not enter into any agreement with respect to, consummate or
permit to occur any Flip-over Transaction or Event if (i) at the time thereof
there are any rights, warrants or securities outstanding or any other
arrangements, agreements or instruments that would eliminate or otherwise
diminish in any material respect the benefits intended to be afforded by this
Rights Agreement to the holders of Rights upon consummation of such transaction,
(ii) prior to, simultaneously with or immediately after such Flip-over
Transaction or Event, the shareholders of the Person who constitutes, or would
constitute, the Flip-over Entity shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates, or (iii)
the form or nature of organization of the Flip-over Entity would preclude or
limit the exercisability of the Rights.
(c) The provisions of this Section 3.2 shall apply to successive
Flip-over Transactions or
Events.
ARTICLE
IV
THE RIGHTS
AGENT
4.1 General. (a) The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted to be done by the Rights
Agent in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability.
-32-
(b) The Rights Agent shall
be protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any certificate for securities (or registration on
the stock transfer books of the Company) purchasable upon exercise of Rights,
Rights Certificate, certificate 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.
4.2 Merger or Consolidation or Change of Name of
Rights Agent. (a) Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent is a
party, or any Person succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 4.4. In case at the time such successor Rights Agent
succeeds to the agency created by this Agreement any of the Rights Certificates
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
-33-
(b) In case at any time
the name of the Rights Agent is changed and at such time any of the Rights
Certificates shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may countersign
such Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
-34-
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may
consult with legal counsel (who may be legal counsel for the Company), and the
opinion of such counsel will be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the
performance of its duties under this Agreement the Rights Agent deems it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by a
person believed by the Rights Agent to be the Chairman of the Board, the Chief
Executive Officer, the President or any Vice President and by the Treasurer or
any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent will
not be liable for or by reason of any of the statements of fact or recitals
contained in this Agreement or in the certificates, if any, for securities
purchasable upon exercise of Rights or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and will be deemed to have been made by the Company
only.
-35-
(e) The Rights Agent will
not be under any responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the validity or execution
of any certificate, if any, for securities purchasable upon exercise of Rights
or Rights Certificate (except its countersignature thereof); nor will it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor will it be responsible for
any change in the exercisability or exchangeability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b)) or any adjustment required
under the provisions of Section 2.4, 3.1 or 3.2 or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate contemplated by Section 2.4
describing any such adjustment); nor will it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any securities purchasable upon exercise of Rights or any Rights or as to
whether any securities purchasable upon exercise of Rights will, when issued, be
duly and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees
that it will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of this
Agreement.
-36-
(g) The Rights Agent is
hereby authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any person believed by the Rights Agent
to be the Chairman of the Board, the Chief Executive Officer, the President or
any Vice President or the Secretary or any Assistant Secretary or the Treasurer
or any Assistant Treasurer of the Company, and to apply to such persons for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with
instructions of any such person.
(h) The Rights Agent and
any shareholder, director, officer or employee of the Rights Agent may buy, sell
or deal in Common Stock, Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may
execute and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys or agents, and
the Rights Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to the
Company resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment
thereof.
-37-
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under
this Agreement upon 90 days’ notice (or such lesser notice as is
acceptable to the Company) in writing mailed to the Company and to each transfer
agent of Common Stock by registered or certified mail, and to the holders of the
Rights in accordance with Section 5.9. The Company may remove the Rights Agent
upon 30 days’ notice in writing, mailed to the Rights Agent and to each transfer
agent of the Common Stock by registered or certified mail, and to the holders of
the Rights in accordance with Section 5.9. If the Rights Agent should resign or
be removed or otherwise become incapable of acting, the Company will appoint a
successor to the Rights Agent. If the Company fails to make such appointment
within a period of 30 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of any Rights (which holder shall, with such
notice, submit such holder’s Rights Certificate for inspection by the Company),
then the holder of any Rights may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a Person organized and
doing business under the laws of the United States or any state of the United
States, in good standing, which is authorized under such laws to exercise the
powers of the Rights Agent contemplated by this Agreement and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights Agent will be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
-38-
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to the Flip-in Date, elect to redeem all
(but not less than all) the then outstanding Rights at the Redemption Price and
the Company, at its option, may pay the Redemption Price either in cash or
shares of Common Stock or other securities of the Company deemed by the Board of
Directors, in the exercise of its sole discretion, to be at least equivalent in
value to the Redemption Price.
(b) Immediately upon the
action of the Board of Directors of the Company electing to redeem the Rights
(or, if the resolution of the Board of Directors electing to redeem the Rights
states that the redemption will not be effective until the occurrence of a
specified future time or event, upon the occurrence of such future time or
event), without any further action and without any notice, the right to exercise
the Rights will terminate and each Right, whether or not previously exercised,
will thereafter represent only the right to receive the Redemption Price in cash
or securities, as determined by the Board of Directors. Promptly after the
Rights are redeemed, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then
outstanding Rights by mailing such notice in accordance with Section
5.9.
-39-
5.2 Expiration. The Rights and this Agreement shall expire
at the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights have
been exchanged or redeemed, as provided in Section 3.1 or 5.1.,
respectively.
5.3 Issuance of New Rights
Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the number or kind or class of shares of
stock purchasable upon exercise of Rights made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock by the Company following the Separation Time and prior to
the Expiration Time pursuant to the terms of securities convertible or
redeemable into shares of Common Stock (other than any securities issued or
issuable in connection with the exercise or exchange of Rights) or to options,
in each case issued or granted prior to, and outstanding at, the Separation
Time, the Company shall issue to the holders of such shares of Common Stock,
Rights Certificates representing the appropriate number of Rights in connection
with the issuance or sale of such shares of Common Stock; provided, however, in each case, (i) no such Rights Certificate
shall be issued, if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be issued
if, and to the extent that, appropriate adjustment shall have otherwise been
made in lieu of the issuance thereof, and (iii) the Company shall have no
obligation to distribute Rights Certificates to any Acquiring Person or
Affiliate or Associate of an Acquiring Person or any transferee of any of the
foregoing.
-40-
5.4 Supplements and Amendments. The Company and the Rights Agent may from
time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) prior to the Flip-in Date, in any respect and (ii) on or
after the Flip-in Date, to make any changes that the Company may deem necessary
or desirable (x) that shall not materially adversely affect the interests of the
holders of Rights generally (other than the Acquiring Person or any Affiliate
thereof) or (y) in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be inconsistent with any other provisions
herein or otherwise defective, including, without limitation, any change in
order to satisfy any applicable law, rule or regulation, including any Trading
Regulation on any applicable exchange so as to allow trading of the Company’s
securities thereon. The Rights Agent will duly execute and deliver any
supplement or amendment hereto requested by the Company which satisfies the
terms of the preceding sentence or Section 2.4(b) or Section 3.2(a), provided
that any supplement or amendment (other than to Article IV) shall become
effective immediately upon execution by the Company, whether or not also
executed by the Rights Agent.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing (or register on the stock transfer books of the
Company) fractional shares upon exercise, redemption or exchange of Rights, the
Company shall, in lieu thereof, in the sole discretion of the Board of
Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) pay to the
registered holder of such Rights the appropriate fraction of the Market Price
per share in cash.
-41-
5.6 Rights of Action. Subject to the terms of this Agreement
(including Sections 3.1(b), 5.10 and 5.14), rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, the
Board of Directors of the Company or the Company, are vested in the respective
holders of the Rights; and any holder of any Rights, without the consent of the
Rights Agent or of the holder of any other Rights, may, on such holder’s own
behalf and for such holder’s own benefit and the benefit of other holders of
Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder’s
right to exercise such holder’s Rights in the manner provided in such holder’s
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a
Shareholder. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities that may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 5.8), or to receive dividends or
subscription rights, or otherwise, until such Rights shall have been exercised
or exchanged in accordance with the provisions hereof.
-42-
5.8 Notice of Proposed Actions. In case the Company shall propose at or
after the Separation Time and prior to the Expiration Time (i) to effect or
permit a Flip-over Transaction or Event or (ii) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 5.9, a notice
of such proposed action, which shall specify the date on which such Flip-over
Transaction or Event, liquidation, dissolution, or winding up is to take place,
and such notice shall be so given at least 20 Business Days prior to the date of
the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by
this Agreement to be given or made by the Rights Agent or by the holder of any
Rights to or on the Company shall be sufficiently given or made if delivered or
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
| Krispy Kreme Doughnuts, Inc. | |
| 000 Xxxxxxxxx Xxxxxx |
| Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000 | |
| Attention: General Counsel |
-43-
Any notice or demand
authorized or required by this Agreement to be given or made by the Company or
by the holder of any Rights to or on the Rights Agent shall be sufficiently
given or made if delivered or sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
| American Stock Transfer & Trust Company, LLC | |
| Operations Center | |
| 0000 00xx Xxxxxx | |
| Xxxxxxxx, Xxx Xxxx 00000 | |
| Attention: Corporate Trust |
Notices or demands
authorized or required by this Agreement to be given or made by the Company or
the Rights Agent to or on the holder of any Rights shall be sufficiently given
or made if delivered or sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as it appears upon the registry books
of the Rights Agent or, prior to the Separation Time, on the registry books of
the transfer agent for the Common Stock. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice.
5.10 Suspension of Exercisability or
Exchangeability. To the
extent that the Board of Directors of the Company determines in good faith that
some action will or need be taken pursuant to, or in order to properly give
effect to, Section 2.3, 3.1 or 4.4 or to comply with federal or state securities
laws or applicable Trading Regulations, the Company may suspend the
exercisability or exchangeability of the Rights for a reasonable period
sufficient to allow it to take such action or comply with such laws or Trading
Regulations. In the event of any such suspension, the Company shall issue as
promptly as practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required. Upon such suspension, any rights
of action vested in a holder of Rights shall be similarly
suspended.
-44-
Failure to give a notice pursuant to
the provisions of this Agreement shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder’s rights pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns
hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the holders
of the Rights any legal or equitable right, remedy or claim under this Agreement
and this Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent and the holders of the Rights.
-45-
5.14 Determination and Actions by the Board of
Directors, etc. The Board of Directors of the Company shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to
the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration or implementation of this
Agreement, including the right to determine the Rights to be null and voided
pursuant to Section 3.1, after taking into account the purpose of this Agreement
and the Company’s interest maintaining an orderly trading market in the
outstanding shares of Common Stock. All such actions, interpretations and
determinations done or made by the Board of Directors of the Company (including
by a committee of the Board to the extent permitted by applicable law), shall be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other Persons.
5.15 Descriptive Headings; Section
References. Descriptive
headings appear herein for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof. Where a reference in
this Agreement is made to a Section, such reference shall be to a Section of
this Agreement unless otherwise indicated.
5.16 GOVERNING LAW; EXCLUSIVE
JURISDICTION
(a) THIS AGREEMENT, EACH RIGHT, AND EACH RIGHTS CERTIFICATE ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NORTH
CAROLINA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF STATE OF NORTH CAROLINA APPLICABLE TO CONTRACTS ENTERED INTO,
MADE WITHIN, AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NORTH CAROLINA,
WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAWS PROVISIONS OR RULES THAT
WOULD CAUSE THE APPLICATION OF LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
NORTH CAROLINA.
-46-
(b) ANY SHAREHOLDER OR OTHER PARTY WHO SEEKS TO
HAVE ANY DISPUTE, CONTROVERSY, OR CLAIM WHATSOEVER REGARDING, ARISING OUT OF, OR
IN CONNECTION WITH THIS AGREEMENT, ANY RIGHT, OR ANY RIGHTS CERTIFICATE ISSUED
HEREUNDER SHALL SEEK TO HAVE SUCH DISPUTE RESOLVED FINALLY AND EXCLUSIVELY IN
THE FORSYTH COUNTY SUPERIOR COURT OF NORTH CAROLINA BY A SPECIAL SUPERIOR COURT
JUDGE FOR COMPLEX BUSINESS CASES OF THE NORTH CAROLINA BUSINESS COURT, WHICH
COURT SHALL HAVE EXCLUSIVE JURISDICTION AND BE THE EXCLUSIVE VENUE TO HEAR ANY
SUCH DISPUTE. PURSUANT TO THE PROCEDURES SET FORTH IN N.C. GEN. STAT. SECTION
7A-45.4, ANY PARTY INITIATING SUCH A DISPUTE IRREVOCABLY AGREES TO DESIGNATE
SUCH DISPUTE AS A MANDATORY COMPLEX BUSINESS CASE AT THE EARLIEST TIME POSSIBLE.
ANY PARTY INITIATING SUCH A DISPUTE IRREVOCABLY SUBMITS TO THE MANDATORY
EXCLUSIVE JURISDICTION AND VENUE OF THE NORTH CAROLINA BUSINESS COURT SITTING IN
FORSYTH COUNTY, NORTH CAROLINA, IN CONNECTION WITH ACTIONS FOR EQUITABLE RELIEF OR IN CONNECTION WITH ANY
OTHER RELIEF SOUGHT. ANY PARTY TO SUCH A DISPUTE WAIVES AND AGREES NOT TO PLEAD
OR CLAIM ANY DEFENSE OF INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR
PROCEEDING SO BROUGHT, WAIVES AND AGREES NOT TO SEEK REMOVAL OF SUCH CASE TO
FEDERAL COURT, AND FURTHER WAIVES ANY OBJECTION THAT IT MAY NOW HAVE OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY PROCEEDING ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, ANY RIGHT, OR ANY RIGHTS CERTIFICATE ISSUED
HEREUNDER IN THE NORTH CAROLINA BUSINESS COURT SITTING IN FORSYTH COUNTY, NORTH
CAROLINA. IF THE COURTS OF THE UNITED STATES OF AMERICA SHOULD HAVE EXCLUSIVE
JURISDICTION OVER ANY OTHER RIGHT OR CAUSE OF ACTION, THEN ONLY FOR SUCH RIGHT
OR CAUSE OF ACTION JURISDICTION AND VENUE SHALL LIE EXCLUSIVELY
IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH
CAROLINA.
-47-
5.17 Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
-48-
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or
unenforceable.
-49-
IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be duly executed as of the date first above written.
| KRISPY KREME DOUGHNUTS, INC. | ||
| By: | /s/ Xxxxxxx X. Xxxx | |
| Name: Xxxxxxx X. Xxxx | ||
| Title: Chief Financial Officer | ||
| AMERICAN STOCK TRANSFER & | ||
| TRUST COMPANY, LLC | ||
| By: | /s/ Xxxxxxx X. Xxxxxx | |
| Name: Xxxxxxx X. Xxxxxx | ||
| Title: Vice President | ||
-50-
EXHIBIT A
Form of Rights
Certificate
| Certificate No. W- | ___________ Rights |
THE RIGHTS ARE SUBJECT TO REDEMPTION OR
MANDATORY EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
KRISPY KREME
DOUGHNUTS, INC.
This certifies that ____________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Protection Rights Agreement, dated as of January
14, 2010 (as amended from time to time, the “Rights Agreement”), between KRISPY
KREME DOUGHNUTS, INC., a North Carolina corporation (the “Company”), and
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, a New York corporation, as
Rights Agent (the “Rights Agent”, which term shall include any successor Rights
Agent under the Rights Agreement), to purchase from the Company at any time
after the Separation Time (as such term is defined in the Rights Agreement) and
prior to the close of business on January 14, 2013, one one-hundredth of a fully
paid share of Series A Participating Cumulative Preferred Stock, no par value
(the “Preferred Stock”), of the Company (subject to adjustment as provided in
the Rights Agreement) at the Exercise Price referred to below, upon presentation
and surrender of this Rights Certificate with the Form of Election to Exercise
duly executed at the principal office of the Rights Agent in Brooklyn, New
York. The Exercise Price shall initially be $13.50 per Right and shall be
subject to adjustment in certain events as provided in the Rights
Agreement.
In
certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to purchase securities of an
entity other than the Company or securities of the Company other than Common
Stock, Preferred Stock or assets of the Company, all as provided in the Rights
Agreement.
This Rights Certificate is subject
to all of the terms, provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby made for a
full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates. Copies of the Rights Agreement are on file at the principal
office of the Company and are available without cost upon written
request.
This Rights Certificate, with or
without other Rights Certificates, upon surrender at the office of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor evidencing an aggregate number
of Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights Certificate shall
be exercised in part, the registered holder shall be entitled to receive, upon
surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
-2-
Subject to the provisions of the
Rights Agreement, each Right evidenced by this
Certificate may be (a) redeemed by the Company under certain circumstances, at
its option, at a redemption price of $0.01 per Right or (b) exchanged by the
Company under certain circumstances, at its option, for one share of Common
Stock (or one one-hundredth of a share of Preferred Stock) per Right (or, in
certain cases, other securities or assets of the Company), subject in each case
to adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of any securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be
valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of
the proper officers of the Company and its corporate seal.
Date:
____________
-3-
| ATTEST: | KRISPY KREME DOUGHNUTS, INC. | ||
| By | |||
| Secretary | |||
Countersigned:
AMERICAN STOCK TRANSFER
&
TRUST COMPANY, LLC
TRUST COMPANY, LLC
| By | ||
| Authorized Signature | ||
-4-
[Form of Reverse Side
of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the
registered holder if such
holder desires to transfer this Rights Certificate.)
holder desires to transfer this Rights Certificate.)
| FOR VALUE RECEIVED ___________________________ hereby sells, assigns and transfers unto | |
| (Please print name | |
| and address of transferee) | |
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 Guaranteed: | |||
| Signature | |||
| (Signature must correspond to name | |||
| as written upon the face of this | |||
| Rights Certificate in every particular, | |||
| without alteration or enlargement or | |||
| any change whatsoever) | |||
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
Exchange Act Rule 17Ad-15.
(To be completed if
true)
The undersigned hereby
represents, for the benefit of all holders of Rights and shares of Common Stock,
that the Rights evidenced by this Rights Certificate are not, and, to the
knowledge of the undersigned, have never been, Beneficially Owned by an
Acquiring Person or an Affiliate thereof (as defined in the Rights
Agreement).
| Signature |
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
-2-
[To be attached to each
Rights Certificate]
FORM OF ELECTION TO
EXERCISE
(To be executed if
holder desires to
exercise the Rights Certificate.)
exercise the Rights Certificate.)
TO: KRISPY KREME
DOUGHNUTS, INC.
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Series A Participating Cumulative
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name
of:
| Address: | ||
| Social Security or Other Taxpayer | ||
| Identification Number: | ||
If such number of Rights
shall not be all the Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance of such Rights shall be registered in the name of
and delivered to:
| Address: | ||
| Social Security or Other Taxpayer | ||
| Identification Number: | ||
Dated: _______________,
____
| Signature Guaranteed: | |||
| Signature | |||
| (Signature must correspond to name | |||
| as written upon the face of this | |||
| Rights Certificate in every particular, | |||
| without alteration or enlargement or | |||
| any change whatsoever) | |||
Signatures must be guaranteed by an
eligible guarantor institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved
signature guarantee Medallion program), pursuant to Exchange Act Rule
17Ad-15.
(To be completed if true)
The
undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by the attached Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate thereof (as defined in
the Rights Agreement).
| Signature |
NOTICE
In the event the certification set
forth above is not completed in connection with a purported exercise, the
Company will deem the Beneficial Owner of the Rights evidenced by the attached
Rights Certificate to be an Acquiring Person or an Affiliate thereof (as defined
in the Rights Agreement) or a transferee of any of the foregoing and accordingly
will deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
-2-
EXHIBIT B
ARTICLES OF AMENDMENT
OF
KRISPY KREME DOUGHNUTS, INC.
OF
KRISPY KREME DOUGHNUTS, INC.
Pursuant to Section
55-6-02 of the General Statutes of North Carolina, the undersigned Corporation
hereby submits these Articles of Amendment for the purpose of amending its
Articles of Incorporation:
1. The name of the Corporation is Krispy Kreme Doughnuts, Inc.
2. The following amendment to the Articles of Incorporation of the
Corporation was adopted by the Board of Directors in the manner prescribed by
law:
Article IV is hereby amended and restated in its entirety as follows:
“Article IV. The Corporation shall have the authority to issue not more
than (a) 300,000,000 shares of common stock, no par value (“Common Stock”) and
(b) 10,000,000 shares of preferred stock, no par value (“Preferred Stock”). Of
the 10,000,000 shares of authorized and unissued Preferred Stock of the
Corporation, a series of Preferred Stock, no par value, of the Corporation,
consisting of 3,000,000 shares, shall be designated and known as the “Series A
Participating Cumulative Preferred Stock” of the Corporation.
Holders of the Common Stock are entitled to the entire voting power, all
distributions declared and all assets of the corporation upon dissolution,
subject to the rights and preferences, if any, of the holders of Preferred Stock
to such voting powers, dividends and assets upon dissolution pursuant to
applicable law and the resolution or resolutions of the Board of Directors
providing for the issue of one or more series of Preferred Stock.
The designation, number of shares, preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends and
qualifications of the Series A Participating Cumulative Preferred Stock are as
follows:
Section 1. Designation and Number of Shares. The shares of such series shall be designated
as “Series A Participating Cumulative Preferred Stock” (the “Series A Preferred Stock”), and the number of shares constituting such series shall be 3,000,000.
Such number of shares of the Series A Preferred Stock may be increased or
decreased by resolution of the Board of Directors; provided, however, that no
decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
issuable upon exercise or conversion of outstanding rights, options or other
securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject
to the prior and superior rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the shares of Series A Preferred
Stock with respect to dividends, if any, 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, quarterly
dividends payable on the last day of March, June, September and December of each
year (each such date being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of any share or fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a) $1.00 and
(b) subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount (payable in kind) of all cash dividends or other
distributions and 100 times the aggregate per share amount of all non-cash
dividends or other distributions (other than (i) a dividend payable in shares of
Common Stock, par value $.01 per share, of the Corporation (the “Common Stock”) or (ii) a subdivision
of the outstanding shares of Common Stock (by reclassification or otherwise)),
declared on the Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A
Preferred Stock. If the Corporation shall at any time after January 18, 2010
(the “Rights Declaration Date”) declare or
pay any dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount 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
Corporation shall declare a dividend or distribution on the Series A Preferred
Stock as provided in Section 2(A) immediately after it declares a dividend or
distribution on the Common Stock (other than as described in clauses (i) and
(ii) of the first sentence of Section 2(A)); provided, however, that if no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date (or, with respect to the first Quarterly
Dividend Payment Date, the period between the first issuance of any share or
fraction of a share of Series A Preferred Stock and such first Quarterly
Dividend Payment Date), a dividend of $1.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date
of issue of such shares of Series A Preferred Stock, unless the date of issue of
such shares is on or before the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue and
be cumulative from the date of issue of such shares, or unless the date of issue
is a date after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and on or
before such Quarterly Dividend Payment Date, in which case dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on 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. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall not be more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other voting rights required by law, the holders of
shares of Series A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of shareholders of the Corporation. If the
Corporation shall at any time after the Rights Declaration Date declare or pay
any dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the number of votes per share to
which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number 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 or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock shall vote
together as a single class on all matters submitted to a vote of shareholders of
the Corporation.
(C) (i) If at any time dividends on any Series A Preferred Stock shall be
in arrears in an amount equal to six quarterly dividends thereon (whether or not
consecutive), the occurrence of such contingency shall xxxx the beginning of a
period (herein called a “default period”)
which shall extend until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly dividend
period on all shares of Series A Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each default period, all
holders of Series A Preferred Stock and any other series of Preferred Stock then
entitled as a class to elect directors, voting together as a single class,
irrespective of series, shall have the right to elect one Director.
(ii) During any default period, such voting right of the holders of
Series A Preferred Stock may be exercised initially at a special meeting called
pursuant to Section 3(C)(iii) or at any annual meeting of shareholders, and
thereafter at annual meetings of shareholders; provided, however, that neither
such voting right nor the right of the holders of any other series of Preferred
Stock, if any, to increase, in certain cases, the authorized number of Directors
shall be exercised unless the holders of 10% in number of shares of Preferred
Stock outstanding shall be present in person or by proxy. The absence of a
quorum of holders of Common Stock shall not affect the exercise by holders of
Preferred Stock of such voting right. At any meeting at which holders of
Preferred Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to elect Directors
to fill such vacancy, if any, in the Board of Directors as may then exist up to
one Director or, if such right is exercised at an annual meeting, to elect one
Director. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Preferred
Stock.
(iii)
Notwithstanding anything to the contrary contained in the Corporation’s Articles
of Incorporation or Bylaws, unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any shareholder(s) owning in the
aggregate not less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request, the calling of
a special meeting of holders of Preferred Stock, which meeting shall thereupon
be called by the President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this Section 3(C)(iii) shall
be given to each holder of record of Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any shareholder(s) owning in the aggregate
not less than ten percent (10%) of the total number of shares of Preferred Stock
outstanding, irrespective of series. Notwithstanding the provisions of this
Section 3(C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next annual meeting
of shareholders.
(iv) In any
default period, the holders of Common Stock, and other classes of stock of the
Corporation if applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock shall have exercised
their right to elect one Director voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock shall
continue in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any vacancy in
the Board of Directors may (except as provided in Section 3(C)(ii) be filled by
vote of a majority of the remaining Directors theretofore elected by the holders
of the class of stock which elected the Director whose office shall have become
vacant. References in this Section 3(C) to Directors elected by the holders of a
particular class of stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period, (x) the right of
the holders of Preferred Stock as a class to elect Directors shall cease, (y)
the term of any Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such number as may be
provided for in the Articles of Incorporation or Bylaws irrespective of any
increase made pursuant to the provisions of Section 3(C)(ii) (such number being
subject, however, to change thereafter in any manner provided by law or in the
Articles of Incorporation or Bylaws). Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding sentence may
be filled by a majority of the remaining Directors.
(D) Except as otherwise provided 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 taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on outstanding shares of Series A Preferred Stock shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions on, 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 (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such other 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) redeem, purchase or otherwise acquire for value any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock; provided, however, that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of stock of the Corporation ranking
junior (as to dividends and upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares of Series
A Preferred Stock, or any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all holders of
Series A Preferred Stock and all such other parity stock 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
Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for value any shares of stock of the Corporation unless the
Corporation could, under Section 4(A), purchase or otherwise acquire such shares
at such time and in such manner.
Section 5. Reacquired Shares.
Any shares of Series A Preferred Stock
redeemed, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock without designation as to series and may be reissued
as part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors as permitted by the Articles of
Incorporation or as otherwise permitted under North Carolina
law.
Section 6. Liquidation, Dissolution
or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
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,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $1.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment;
provided, however, that the holders of shares of Series A Preferred Stock shall
be entitled to receive an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of Common Stock, or (2) to the holders of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all such other
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. If the
Corporation shall at any time after the Rights Declaration Date pay any dividend
on Common Stock payable in shares of Common Stock or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount 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. Consolidation, Merger or
Share Exchange. If the Corporation shall
enter into any consolidation, merger, statutory share exchange, combination or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash or any other property, then in any
such case the shares of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the aggregate
amount of stock, securities, cash or any other property, as the case may be,
into which or for which each share of Common Stock is exchanged or changed. If
the Corporation shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount 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 8. No Redemption. The Series A Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank junior (as to dividends and upon
liquidation, dissolution and winding up) to all other series of the
Corporation’s preferred stock, except any series that specifically provides that
such series shall rank junior to the Series A Preferred Stock.
Section 10. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder’s fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
Section 11. Amendment. The Articles of Incorporation of the Corporation shall not be further
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority or more
of the outstanding shares of Series A Preferred Stock, voting separately as a
class.”
3. The foregoing amendment was adopted on the 14th day of January, 2010 by the Board of
Directors of the Corporation in accordance with Section 55-6-02 of the General
Statutes of North Carolina.
4. The foregoing amendment will become effective at 5:00 p.m. on January 18,
2010.
[signature page follows]
This the ___ day of January,
2010.
| KRISPY KREME DOUGHNUTS, INC. | ||
| |
||
| By: | ||
| Name: Xxxxx X. Xxxxxx | ||
| Title: Chairman, President and Chief Executive Officer | ||
