STB DRAFT 10/31/01
RIGHTS AGREEMENT
ARAMARK WORLDWIDE CORPORATION
and
[____________________],
as Rights Agent
Dated as of [________ __], 2001
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions............................................................................. 1
Section 2. Appointment of Rights Agent..................................................................... 5
Section 3. Issue of Right Certificates..................................................................... 5
Section 4. Form of Right Certificates...................................................................... 8
Section 5. Countersignature and Registration............................................................... 8
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates.................................................................... 9
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights................................... 10
Section 8. Cancellation and Destruction of Right Certificates.............................................. 11
Section 9. Availability of Shares of Preferred Stock....................................................... 12
Section 10. Preferred Stock Record Date..................................................................... 13
Section 11. Adjustment of Purchase Price, Number of Shares and Number of Rights............................. 13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...................................... 23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earnings Power........................... 23
Section 14. Fractional Rights and Fractional Shares......................................................... 27
Section 15. Rights of Action................................................................................ 29
Section 16. Agreement of Right Holders...................................................................... 29
Section 17. Right Certificate Holder Not Deemed a Stockholder............................................... 30
Section 18. Concerning the Rights Agent..................................................................... 30
Section 19. Merger or Consolidation or Change of Name of Rights Agent....................................... 31
Section 20. Duties of Rights Agent.......................................................................... 32
Section 21. Change of Rights Agent.......................................................................... 34
Section 22. Issuance of New Right Certificates.............................................................. 35
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Page
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Section 23. Redemption...................................................................................... 36
Section 24. Exchange........................................................................................ 36
Section 25. Notice of Certain Events........................................................................ 38
Section 26. Notices......................................................................................... 39
Section 27. Supplements and Amendments...................................................................... 39
Section 28. Successors...................................................................................... 40
Section 29. Benefits of this Agreement...................................................................... 40
Section 30. Severability.................................................................................... 40
Section 31. Governing Law................................................................................... 40
Section 32. Counterparts.................................................................................... 41
Section 33. Descriptive Headings............................................................................ 41
Section 34. Administration.................................................................................. 41
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RIGHTS AGREEMENT
Agreement, dated as of [________ __], 2001, between ARAMARK Worldwide
Corporation, a Delaware corporation (the "Company"), and Mellon Investor
Services LLC, a [________] limited liability company, as Rights Agent (the
"Rights Agent").
The Board of Directors of the Company has authorized and approved the
issuance of one preferred share purchase right (a "Right") together with each
share of Common Stock (as hereinafter defined) of the Company to be issued
pursuant to an agreement and plan of merger between ARAMARK Worldwide
Corporation and the Company with an effective date as of the consummation of the
merger (the "Record Date"), each Right representing the right to purchase one
one-thousandth (subject to adjustment) of a share of Preferred Stock (as
hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each share of Common
Stock that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are hereinafter defined); provided, however, that Rights may be
issued with respect to shares of Common Stock that shall become outstanding
after the Distribution Date and prior to the Redemption Date and the Final
Expiration Date in accordance with Section 22.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the shares of Class B Common
Stock then outstanding, but shall not include an Exempt Person (as such
term is hereinafter defined); provided, however, that (i) if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" has become such inadvertently
(including, without limitation, because (A) such Person was unaware that it
beneficially owned a percentage of Class B Common Stock that would
otherwise cause such Person to be a "Acquiring Person" or (B) such Person
was aware of the extent of its Beneficial Ownership of Class B Common Stock
but had no actual knowledge of the consequences of such Beneficial
Ownership under this Rights Agreement) and without any intention of
changing or influencing control of the Company, and such Person, as
promptly as practicable divested or divests himself or itself of Beneficial
Ownership of a sufficient number of shares of Class B Common Stock so that
such Person would no longer be an Acquiring Person, then such Person shall
not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement; and (ii) if, as of the date hereof or prior to
the first public announcement of the adoption of this Agreement, any Person
is or becomes the Beneficial Owner of 15% or more of the shares of Class B
Common Stock outstanding, such Person shall not be deemed to be or to
become an "Acquiring Person" unless and until
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such time as such Person shall, after the first public announcement of the
adoption of this Agreement, become the Beneficial Owner of additional
shares of Class B Common Stock representing 1% or more of the outstanding
shares of Class B Common Stock as of the date of the first public
announcement of the adoption of this Agreement (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding
Common Stock or pursuant to a split or subdivision of the outstanding
Common Stock), unless, upon becoming the Beneficial Owner of such
additional shares of Class B Common Stock, such Person is not then the
Beneficial Owner of 15% or more of the shares of Class B Common Stock then
outstanding. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of shares of Common
Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such
Person to 15% or more of the shares of Class B Common Stock then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Class B Common Stock then
outstanding by reason of such share acquisitions by the Company and
thereafter become the Beneficial Owner of any additional shares of Class B
Common Stock, then such Person shall be deemed to be an "Acquiring Person"
unless upon the consummation of the acquisition of such additional shares
of Class B Common Stock such Person does not own 15% or more of the shares
of Class B Common Stock then outstanding. The phrase "then outstanding",
when used with reference to a Person's Beneficial Ownership of securities
of the Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own
beneficially hereunder.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall be
deemed to have "Beneficial Ownership" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates is deemed to beneficially own, directly or indirectly
within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other than
customary agreements with and
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between underwriters and selling group members with respect to a
bona fide public offering of securities), written or otherwise, 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 of, or to beneficially own, (x) securities tendered pursuant
to a tender or exchange offer made pursuant to, and in accordance
with, the applicable rules and regulations promulgated under the
Exchange Act by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase, (y) securities which such Person has a right
to acquire on the exercise of Rights at any time prior to the time
a Person becomes an Acquiring Person or (z) securities issuable
upon exercise of Rights from and after the time a Person becomes an
Acquiring Person if such Rights were acquired by such Person or any
of such Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof ("Original
Rights") or pursuant to Section 11(i) or Section 11(n) with respect
to an adjustment to Original Rights; or (B) the right to vote
pursuant to any agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, any security by reason of such agreement,
arrangement or understanding if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person and with respect to which such
Person or any of such Person's Affiliates or Associates has 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) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of
such securities.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of New York or
the Commonwealth of Pennsylvania are authorized or obligated by law or
executive order to close.
(e) "Class A Common Stock" shall mean the Class A-1 Common Stock
of the Company, the Class A-2 Common Stock of the Company and the Class A-3
Common Stock of the Company, each par value $0.01 per share.
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(f) "Class B Common Stock" shall mean the Class B Common Stock
of the Company, the Class B-1 Common Stock of the Company, the Class B-2
Common Stock of the Company and the Class B-3 Common Stock of the Company,
each par value $0.01 per share.
(g) "Close of Business" on any given date shall mean 5:00 P.M.,
New York City time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(h) "Common Stock" when used with reference to the Company shall
mean the Class A Common Stock and the Class B Common Stock. "Common Stock"
when used with reference to any Person other than the Company shall mean
the capital stock (or, in the case of an unincorporated entity, the
equivalent equity interest) with the greatest voting power of such other
Person or, if such other Person is a subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.
(i) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(j) "Exempt Person" shall mean the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, any entity or trustee
holding 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, or Xxxxxx
Xxxxxxxx or his estate or Affiliates; provided that Xxxxxx Xxxxxxxx or his
estate or Affiliates shall only be deemed to be an Exempt Person for so
long as he, it or they beneficially own no more than [ ]% (the "Xxxxxxxx
Percentage") of the outstanding shares of Class B Common Stock of the
Company; provided further, that any equity securities of the Company that
may be issued, granted or purchased by Xx. Xxxxxxxx following the date of
this Agreement pursuant to any employee benefit plan of the Company or of
any Subsidiary of the Company shall not be counted for purposes of
calculating the Xxxxxxxx Percentage.
(k) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(l) "New York Stock Exchange" shall mean the New York Stock
Exchange, Inc.
(m) "Person" shall mean any individual, firm, corporation,
partnership, limited partnership, business trust, limited liability
company, unincorporated
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association, joint venture, group or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(n) "Preferred Stock" shall mean the Series C Preferred Stock,
par value $.01 per share, of the Company having the rights and preferences
upon adoption as set forth in the Form of Certificate of Designations
attached to this Agreement as Exhibit A.
(o) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(p) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(q) "Stock Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become
such or such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person.
(r) "Subsidiary" of any Person shall mean any corporation or
other entity of which securities or other ownership interests having
ordinary voting power sufficient to elect a majority of the board of
directors or other persons performing similar functions are beneficially
owned, directly or indirectly, by such Person, and any corporation or other
entity that is otherwise controlled by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and in
no event shall be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the Stock
Acquisition Date or (ii) the tenth Business Day (or such later date as
may be determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the date of the
commencement by any Person (other than an Exempt Person) of, or of the
first public announcement of the intention of such Person (other than
an Exempt Person) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the
Beneficial Owner of shares of Class B Common Stock aggregating 15% or
more of the Class
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B Common Stock then outstanding (including any such date which is
after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the
"Distribution Date"); provided, however, that if either of such dates
occurs after the date of this Agreement and on or prior to the Record
Date, then the Distribution Date shall be the Record Date, (x) the
Rights will be evidenced (subject to the provisions of Section 3(b)
hereof) by the certificates for Common Stock registered in the names
of the holders thereof, or by a current ownership statement issued
with respect to uncertificated shares of Common Stock in lieu of such
a certificate (an "Ownership Statement") and not by separate Right
Certificates and (y) the Rights will be transferable only in
connection with the transfer of Common Stock. As soon as practicable
after the Distribution Date, the Company shall promptly notify the
Rights Agent of the occurrence thereof and, if the Rights Agent is not
then also the transfer agent and registrar for the Common Stock,
provide the Rights Agent with the names and addresses of all record
holders of Common Stock (together with all other necessary
information), and the Company will prepare and execute, the Rights
Agent will countersign and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Stock
as of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so held.
As of the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) (i) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Shares of
Preferred Stock, in substantially the form of Exhibit C hereto (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Stock as of the close of business on the Record Date
(other than any Acquiring Person or any Associate or Affiliate of any
Acquiring Person), at the address of such holder shown on the records of
the Company.
(ii) With respect to shares of Common Stock represented by
certificates for Common Stock or Ownership Statements outstanding as of the
Record Date, until the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date, the Rights associated with such shares
of Common Stock will be evidenced by such certificates or Ownership
Statements. Until the earlier of the Distribution Date and the Expiration
Date (as defined below), the surrender for transfer of any certificate for
shares of Common Stock outstanding on the Record Date, or the transfer of
any Common Stock represented by an Ownership Statement outstanding on the
Record Date, in either case with or without a copy of the Summary of
Rights, shall also, except as otherwise provided
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herein, constitute the transfer of the Rights associated with the Common
Stock represented thereby.
(c) (i) Certificates or Ownership Statements issued for Common Stock
(including, without limitation, upon transfer of outstanding Common Stock,
disposition of Common Stock out of treasury stock or issuance or reissuance
of Common Stock out of authorized but unissued shares) after the Record
Date but prior to the earlier of the Distribution Date and the Expiration
Date (as defined below), shall have impressed on, printed on, written on or
otherwise affixed to them substantially in the form of the following
legend:
This [certificate] [statement] also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agreement between
ARAMARK Worldwide Corporation and Mellon Investor Services LLC, as
Rights Agent, dated as of , 2001, as the same may be amended from time
to time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of ARAMARK Worldwide Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this [certificate] [statement]. ARAMARK Worldwide
Corporation will mail to the holder of this [certificate] [statement]
a copy of the Rights Agreement without charge after receipt of a
written request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights owned by or transferred to any Person who
becomes an Acquiring Person (as defined in the Rights Agreement) and
certain transferees thereof will become null and void and will no
longer be transferable.
With respect to such certificates or Ownership Statements containing the
foregoing legend, until the Distribution Date, the Rights associated with
the Common Stock represented by such certificates or Ownership Statements
shall be evidenced by such certificates or Ownership Statements alone, and
the surrender for transfer of any such certificate or the transfer of any
shares of Common Stock represented by such Ownership Statements, except as
otherwise provided herein, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.
(ii) In the event that the Company purchases or otherwise acquires
any Common Stock after the Record Date but prior to the Distribution Date,
any Rights associated with such Common Stock shall be deemed cancelled
8
and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of
any holder of the Rights.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate, provided that such marks, legends, summaries and endorsements do
not affect the rights, duties or responsibilities of the Rights Agent and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of the New York Stock Exchange or of any
other stock exchange or automated quotation system on which the Rights may from
time to time be listed, or to conform to usage. Subject to the provisions of
Sections 11, 13 and 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-thousandths of a share of Preferred
Stock as shall be set forth therein at the price per one one-thousandth of a
share of Preferred Stock set forth therein (the "Purchase Price"), but the
number of such one one-thousandths of a share of Preferred Stock and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company by
the Chairman of the Board of Directors, the President, any Executive Vice
President, any Senior Vice President, the Treasurer or the Comptroller of
the Company, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or
by facsimile signature. The Right Certificates shall be countersigned by
the Rights Agent, either manually or by facsimile signature, and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates, or shall have
attested the Company's seal thereon, shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates, or who attested the Company's seal thereon, had not ceased to
be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company, and the Company's seal may be attested, by any
Person who, at the actual date of the execution of such Right Certificate,
shall
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be a proper officer of the Company to sign such Right Certificate, although
at the date of the execution of this Agreement any such Person was not such
an officer.
(b) Following the Distribution Date, and the receipt by the Rights Agent
of written notice to that effect and all required information the Rights
Agent will keep or cause to be kept, at an office designated for such
purpose, books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14 hereof,
at any time after the close of business on the Distribution Date, and prior
to the close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like
number of one one-thousandths of a share of Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have
properly completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the
Company or the Rights Agent shall request. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination
or exchange of Right Certificates. The Rights Agent shall have no duty or
obligation under this Section 6 unless and until it is satisfied that all
such taxes and/or charges have been paid in full.
(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, upon receipt
by the Company and the Rights Agent of evidence satisfactory to them of the
loss, theft, destruction or
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mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights, Purchase Price; Expiration Date of Rights.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder
of any Right Certificate may, subject to Section 11(a)(ii) hereof and
except as otherwise provided herein, exercise the Rights evidenced thereby
in whole or in part upon surrender of the Right Certificate, with the form
of election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each one one-thousandth of
a share of Preferred Stock as to which the Rights are exercised, at any
time which is both after the Distribution Date and prior to the earliest
(the "Expiration Date") of (i) the close of business on [November __], 2011
(the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), or (iii)
the time at which such Rights are exchanged as provided in Section 24
hereof.
(b) The Purchase Price shall be initially $[___] for each one one-
thousandth of a share of Preferred Stock purchasable upon the exercise of a
Right. The Purchase Price and the number of one one-thousandths of a share
of Preferred Stock or other securities or property to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money
of the United States of America in accordance with paragraph (c) of this
Section 7.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase
Price for the shares of Preferred Stock to be purchased and an amount equal
to any applicable tax or governmental charge required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof, in
cash or by certified check, cashier's check or money order payable to the
order of the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock or make
available if the Rights Agent is the transfer agent for the Preferred Stock
certificates for the number of shares of Preferred Stock to be purchased
(and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests), or (B) requisition from the depositary agent
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depositary receipts representing interests in such number of one one-
thousandths of a share of Preferred Stock as are to be purchased (in which
case certificates for the Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) (and
the Company hereby directs the depositary agent to comply with such
request), (ii) when necessary to comply with this Agreement, requisition
from the Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) promptly
after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when necessary to comply with this Agreement, after
receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the
exercisable Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action
with respect to a registered holder of Rights upon the occurrence of any
purported transfer or exercise of Rights pursuant to Section 6 hereof or
this Section 7 unless such registered holder shall have (i) properly
completed and signed the certificate contained in the form of assignment or
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such transfer or exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) thereof as the Company or the Rights Agent shall reasonably request.
(f) Neither the Company nor the Rights Agent shall have any liability to
any holder of Rights or any other Person as a result of the Company's
failure to make any determination under this Section 7 or any other section
with respect to the Acquiring Person or an Affiliate or Associate of an
Acquiring Person or transferees hereunder.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the
12
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy, or cause to be destroyed, such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred
Stock or any shares of Preferred Stock held in its treasury, the number of
shares of Preferred Stock that will be sufficient to permit the exercise in
full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the time
that a Person becomes an Acquiring Person, shares of Common Stock and other
securities) issuable upon the exercise of Rights may be listed or admitted
to trading on the New York Stock Exchange or listed on any other national
securities exchange or quotation system, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed or admitted
to trading on the New York Stock Exchange or listed on any other exchange
or quotation system upon official notice of issuance upon such exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the
issuance of shares of Preferred Stock (and following the time that a Person
first becomes an Acquiring Person, shares of Common Stock and other
securities) upon the exercise of Rights, to register and qualify such
shares of Preferred Stock (and following the time that a Person first
becomes an Acquiring Person, shares of Common Stock and other securities)
under the Securities Act and any applicable state securities or "Blue Sky"
laws (to the extent exemptions therefrom are not available), cause such
registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no
longer exercisable for such securities and the Final Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed 90
days, the exercisability of the Rights in order to prepare and file a
registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Company shall promptly notify the
Rights Agent thereof and issue a public announcement (with prompt notice
thereof to the Rights Agent) stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect (with prompt written notice
thereof to the Rights Agent). Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction, if
any, shall
13
have been obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Preferred Stock (and,
following the time that a Person becomes an Acquiring Person, shares of
Common Stock and other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates therefor (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all taxes and charges which may be payable in respect
of the issuance or delivery of the Right Certificates or of any shares of
Preferred Stock (or shares of Common Stock or other securities) upon the
exercise of Rights. The Company shall not, however, be required to pay any
tax or charge which may be payable in respect of any transfer or delivery
of Right Certificates to a Person other than, or the issuance or delivery
of certificates or depositary receipts for the Preferred Stock (or shares
of Common Stock or other securities) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or deliver any certificates or depositary receipts
for Preferred Stock (or shares of Common Stock or other securities) upon
the exercise of any Rights until any such tax or charge shall have been
paid (any such tax or charge being payable by that holder of such Right
Certificate at the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax or charge is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for Preferred Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares of
Preferred Stock represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable taxes or
charges) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Stock for which the
Rights shall be exercisable, including, without limitation, the right to vote or
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares and Number of
Rights. The Purchase Price, the number of shares of Preferred Stock or other
14
securities or property purchasable upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
number of Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the Company
were open, the holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right (so long as Delaware law continues to require
par value to be paid so that shares are fully paid).
(ii) Subject to Section 24 of this Agreement and except as
otherwise provided in this Section 11(a)(ii), in the event any Person
becomes an Acquiring Person, each holder of a Right shall thereafter
have the right to receive, upon exercise thereof at a price equal to the
then current Purchase Price immediately prior to the Person becoming an
Acquiring Person multiplied by the number of one one-thousandths of a
share of Preferred Stock for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock, such number of shares of Class A Common Stock or Class
B Common Stock, as the case may be, (or at the option of the Company,
such number of one one-thousandths of shares of Preferred Stock) as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a share of
Preferred Stock for which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price of the
Company's Class B Common Stock (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event; provided, however,
that the Purchase Price and the number of shares of Common Stock so
receivable upon exercise of a Right shall thereafter be subject to
further
15
adjustment as appropriate in accordance with Section 11(f) hereof. Each
holder of a Right associated with the Class A Common Stock shall receive
Class A Common Stock and each holder of a Right associated with the
Class B Common Stock shall receive Class B Common Stock upon exercise
thereof pursuant to this Section 11(a)(ii). Notwithstanding anything in
this Agreement to the contrary, however, from and after the time (the
"invalidation time") when any Person first becomes an Acquiring Person,
any Rights that are beneficially owned by (x) any Acquiring Person (or
any Affiliate or Associate of any Acquiring Person), (y) a transferee of
any Acquiring Person (or any such Affiliate or Associate) who becomes a
transferee after the invalidation time or (z) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a
transferee prior to or concurrently with the invalidation time pursuant
to either (I) a transfer from the Acquiring Person to holders of its
equity securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred Rights
or (II) a transfer which the Board of Directors has determined is part
of a plan, arrangement or understanding which has the purpose or effect
of avoiding the provisions of this paragraph, and subsequent transferees
of such Persons, shall be null and void without any further action and
any holder of such Rights shall thereafter have no rights whatsoever
with respect to such Rights under any provision of this Agreement. The
Company shall use all reasonable efforts to ensure that the provisions
of this Section 11(a)(ii) are complied with, but neither the Company nor
the Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of the Company's failure to
make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. From and after the
invalidation time, no Right Certificate shall be issued pursuant to
Section 3 or Section 6 hereof that represents Rights that are or have
become null and void pursuant to the provisions of this paragraph, and
any Right Certificate delivered to the Rights Agent that represents
Rights that are or have become null and void pursuant to the provisions
of this paragraph shall be cancelled. From and after the occurrence of
an event specified in Section 13(a) hereof, any Rights that theretofore
have not been exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only in accordance with Section 13 and not
pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance with the
foregoing subparagraph (ii) such number or fractions of shares of
Preferred Stock having an aggregate current market value equal to the
current per share market price of a share of Common Stock. In the event
that there shall not be sufficient shares of Common Stock issued but not
16
outstanding or authorized but unissued to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Board
of Directors shall, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party (A)
determine the excess of (1) the value of the shares of Common Stock
issuable upon the exercise of a Right in accordance with the foregoing
subparagraph (ii) (the "Current Value") over (2) the then current
Purchase Price multiplied by the number of one one-thousandths of shares
of Preferred Stock for which a Right was exercisable immediately prior
to the time that the Acquiring Person became such (such excess, the
"Spread"), and (B) with respect to each Right (other than Rights which
have become null and void pursuant to Section 11(a)(ii)), make adequate
provision to substitute for the shares of Common Stock issuable in
accordance with subparagraph (ii) upon exercise of the Right and payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) shares of Preferred Stock or other equity securities
of the Company (including, without limitation, shares or fractions of
shares of preferred stock which, by virtue of having dividend and
liquidation rights substantially comparable to those of the shares of
Common Stock, are deemed in good faith by the Board of Directors to have
substantially the same value as the shares of Common Stock (such shares
of Preferred Stock and shares or fractions of shares of preferred stock
are hereinafter referred to as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any combination of
the foregoing, having a value which, when added to the value of the
shares of Common Stock actually issued upon exercise of such Right,
shall have an aggregate value equal to the Current Value (less the
amount of any reduction in the Purchase Price), where such aggregate
value has been determined by the Board of Directors upon the advice of a
nationally recognized investment banking firm selected in good faith by
the Board of Directors; provided, however, if the Company shall not make
adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the date that the Acquiring Person became
such (the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party, upon
the surrender for exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the extent available),
and then, if necessary, such number or fractions of shares of Preferred
Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If, upon
the date any Person becomes an Acquiring Person, the Board of Directors
shall determine in good faith that it is likely that sufficient
additional shares of Common Stock should be authorized for issuance upon
exercise in full of the Rights, then, if the Board of Directors so
elects, the thirty (30) day
17
period set forth above may be extended to the extent necessary, but not
more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the
authorization of such additional shares (such thirty (30) day period, as
it may be extended, is herein called the "Substitution Period"). To the
extent that the Company determines that some action need be taken
pursuant to the second and/or third sentence of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 11(a)(ii) hereof and
the last sentence of this Section 11(a)(iii) hereof, that such action
shall apply uniformly to all outstanding Rights (other than those held
by an Acquiring Person or his transferee) and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
second sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect, in each case with prompt written notice thereof to the
Rights Agent. For purposes of this Section 11(a)(iii), the value of the
shares of Class B Common Stock shall be the current per share market
price (as determined pursuant to Section 11(d)(i)) on the Section
11(a)(ii) Trigger Date and the per share or fractional value of any
"Common Stock Equivalent" shall be deemed to equal the current per share
market price of the Class B Common Stock. The Board of Directors of the
Company may, but shall not be required to, establish procedures to
allocate the right to receive shares of Common Stock upon the exercise
of the Rights among holders of Rights pursuant to this Section
11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Stock (or shares having the same
rights, privileges and preferences as the Preferred Stock ("equivalent
preferred shares")) or securities convertible into Preferred Stock or
equivalent preferred shares at a price per share of Preferred Stock or
equivalent preferred shares (or having a conversion price per share, if a
security convertible into shares of Preferred Stock or equivalent preferred
shares) less than the then current per share market price of the Preferred
Stock (determined pursuant to Section 11(d) hereof) on such record date,
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number
of shares of Preferred Stock and equivalent preferred shares outstanding on
such record date plus the number of shares of Preferred Stock and
equivalent preferred shares which the aggregate offering price of the total
number of shares of Preferred Stock and/or
18
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall
be the number of shares of Preferred Stock and equivalent preferred shares
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right (so long as Delaware law continues to
require par value to be paid so that shares are fully paid). In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a reasonably detailed statement
filed with the Rights Agent and which should be conclusive for all
purposes. Shares of Preferred Stock and equivalent preferred shares owned
by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular cash dividend or a dividend
payable in Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Stock (determined pursuant to Section 11(d) hereof)
on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company whose determination shall be
described in a reasonably detailed statement filed with the Rights Agent
and which shall be conclusive for all purposes) of the portion of the
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of Preferred Stock,
and the denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock;
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a
19
record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) (i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "current per share market price" of any security
(a "Security" for the purpose of this Section 11(d)(i)) on any date shall
be deemed to be the average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to but not including such date; provided,
however, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such
shares, or (B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of 30 Trading Days after but not
including the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per share
equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported by the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted
to trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System "NASDAQ" or such other
system then in use, or, if on any such date the Security is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. The term "Trading Day"
shall mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the "current per share market price"
of the Preferred Stock shall be determined in accordance with the method
set forth in Section 11(d)(i). If the Preferred Stock is not publicly
traded but
20
the Class B Common Stock is publicly traded, the "current per share
market price" of the Preferred Stock shall be conclusively deemed to be
the current per share market price of the Class B Common Stock as
determined pursuant to Section 11(d)(i) multiplied by one thousand
(appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof). If neither the
Class B Common Stock nor the Preferred Stock is publicly traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a reasonably detailed statement
filed with the Rights Agent and which shall be conclusive for all
purposes.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one-
thousandth of a share of Preferred Stock or share of Common Stock or other
share or security as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than the
Preferred Stock, thereafter the Purchase Price and the number of such other
shares so receivable upon exercise of a Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), 11(b), 11(c), 11(e), 11(h), 11(i) and 11(m),
and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to
21
purchase, at the adjusted Purchase Price, that number of one one-
thousandths of a share of Preferred Stock (calculated to the nearest one-
thousandth of a share of Preferred Stock) obtained by (i) multiplying (x)
the number of one one-thousandths of a share covered by a Right immediately
prior to such adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement (with prompt written notice thereof to the
Rights Agent) of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount
of the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company may, as promptly as practicable, cause to be distributed
to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number
of one
22
one-thousandths of a share of Preferred Stock which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Preferred Stock or
other shares of capital stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock or other such
shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer, with prompt written
notice thereof to the Rights Agent, until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, issuance wholly for cash or Preferred Stock
of securities which by their terms are convertible into or exchangeable for
Preferred Stock, dividends on Preferred Stock payable in shares of
Preferred Stock or issuance of rights, options or warrants referred to
hereinabove in Section 11(b), hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision,
combination or consolidation of the Common Stock (by reclassification or
otherwise other than by payment of a dividend payable in Common Stock) into
a greater or lesser number of Common Stock, then in any such case, the
number of Rights associated with each share of Common Stock then
outstanding, or issued
23
or delivered thereafter, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total
number of shares of Common Stock outstanding immediately following the
occurrence of such event. The adjustments provided for in this Section
11(n) shall be made successively (but without duplication) whenever such a
dividend is declared or paid or such subdivision, combination or
consolidation is effected.
(o) The Company agrees that, after the earlier of the Distribution Date
or the Stock Acquisition Date, it will not, except as permitted by Sections
23, 24 or 27 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or eliminate the benefits intended to be
afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief, reasonably detailed statement of the facts, methodology and
computations accounting for such adjustment, (b) file with the Rights Agent and
with each transfer agent for the Common Stock or the Preferred Stock a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25 hereof (if so required under Section
25 hereof). The Rights Agent shall be fully protected and authorized in relying
on any such certificate and on any adjustment therein contained, and shall have
no duty or liability with respect to, and shall not be deemed to have knowledge
of, any such adjustment unless and until it shall have received such a
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earnings
Power
(a) In the event, directly or indirectly, at any time after any Person
has become an Acquiring Person, (i) the Company shall consolidate with or
merge with and into any other Person, (ii) any Person shall merge with and
into the Company and the Company shall be the surviving corporation of such
merger and, in connection with such merger, all or part of the Common Stock
shall be changed into or exchanged for stock or other securities of any
other Person (or of the Company) or cash or any other property, or (iii)
the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person (other than the Company or one or more of its
24
wholly-owned Subsidiaries), then upon the first occurrence of such event,
proper provision shall be made so that: (A) each holder of record of a
Right (other than Rights which have become null and void pursuant to
Section 11(a)(ii)) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one thousandths of a share of Preferred
Stock for which a Right was exercisable (whether or not such Right was then
exercisable) immediately prior to the time that any Person first became an
Acquiring Person (each as subsequently adjusted pursuant to Sections
11(a)(i), 11(b), 11(c), 11(f), 11(h), 11(i) and 11(m)), in accordance with
the terms of this Agreement and in lieu of shares of Preferred Stock or
Common Stock of the Company, such number of validly issued, fully paid and
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as defined herein) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number
of one one thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the time that any Person first became an
Acquiring Person (as subsequently adjusted thereafter pursuant to Sections
11(a)(i), 11(b), 11(c), 11(f), 11(h), 11(i) and 11(m)) and (2) dividing
that product by 50% of the then current per share market price of the
Common Stock of such Principal Party (determined pursuant to Section
11(d)(i) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; provided, that the Purchase Price (as theretofore
adjusted pursuant to Sections 11(a)(i), 11(b), 11(c), 11(f), 11(h), 11(i)
and 11(m)) and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided
in Section 11(f) of this Agreement to reflect any events occurring in
respect of such Principal Party after the date of such consolidation,
merger, sale or transfer; (B) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" shall thereafter be deemed to refer to
such Principal Party; and (D) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
its shares of Common Stock in accordance with Section 9 hereof) in
connection with such consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of
its Common Stock thereafter deliverable upon the exercise of the Rights;
provided, that, upon the subsequent occurrence of any consolidation,
merger, sale or transfer of assets or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase
Price as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common
Stock of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13(a), and such
25
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clauses (i) or
(ii) of the first sentence of Section 13(a) hereof: (A) the Person that
is the issuer of the securities into which the shares of Common Stock
are converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding, or (B) if no
securities are so issued, (x) the Person that is the other party to the
merger, if such Person survives said merger, or, if there is more than
one such Person, the Person the shares of Common Stock of which have the
greatest aggregate market value of shares outstanding or (y) if the
Person that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the Company
if it survives) or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (iii) of
the first sentence in Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the issuer of
Common Stock having the greatest aggregate market value of shares
outstanding;
provided, however, that in any such case described in the foregoing clause
(b)(i) or (b)(ii), if the Common Stock of such Person is not at such time
or has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, then (1) if such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, the term "Principal Party" shall refer to such
other Person, or (2) if such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stock of all of which is
and has been so registered, the term "Principal Party" shall refer to
whichever of such Persons is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding, or (3) if such Person is
owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in clauses (1) and (2) above shall apply to each of the
owners having an interest in the venture as if the Person owned by the
joint venture was a Subsidiary of both or all
26
of such joint venturers, and the Principal Party in each such case shall
bear the obligations set forth in this Section 13 in the same ratio as its
interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the
Company and the Principal Party involved therein shall have executed and
delivered to the Rights Agent an agreement confirming that the requirements
of Sections 13(a) and (b) hereof shall promptly be performed in accordance
with their terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under this
Agreement as the same shall have been assumed by the Principal Party
pursuant to Sections 13(a) and (b) hereof and providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Final
Expiration Date, and similarly comply with applicable state
securities laws;
(ii) use its best efforts, if the Common Stock of the Principal
Party shall be listed or admitted to trading on the New York Stock
Exchange or on another national securities exchange, to list or
admit to trading (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on the New York
Stock Exchange or such securities exchange, or, if the Common Stock
of the Principal Party shall not be listed or admitted to trading
on the New York Stock Exchange or a national securities exchange,
to cause the Rights and the securities receivable upon exercise of
the Rights to be reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects
with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
27
(d) In case the Principal Party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in this
Section 13, shares of Common Stock of such Principal Party at less than the
then current market price per share thereof (determined pursuant to Section
11(d) hereof) or securities exercisable for, or convertible into, Common
Stock of such Principal Party at less than such then current market price,
or (ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any
such transaction unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party
shall have been cancelled, waived or amended, or that the authorized
securities shall be redeemed, so that the applicable provision will have no
effect in connection with, or as a consequence of, the consummation of the
proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time
after a Person first becomes an Acquiring Person, enter into any
transaction of the type contemplated by clauses (i), (ii) or (iii) of
Section 13(a) hereof if (x) at the time of or immediately after such
consolidation, merger, sale, transfer or other transaction there are any
rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, (y) prior to,
simultaneously with or immediately after such consolidation, merger, sale,
transfer of other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or
(z) the form or nature of organization of the Principal Party would
preclude or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price,
28
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions of Preferred
Stock (other than fractions which are integral multiples of one one-
thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of
a share of Preferred Stock). Interests in fractions of Preferred Stock in
integral multiples of one one-thousandth of a share of Preferred Stock may,
at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the
Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one share of Preferred Stock. For the
purposes of this Section 14(b), the current market value of a share of
Preferred Stock shall be the closing price of a share of Preferred Stock
(as determined pursuant to Section 11(d)(i) or (ii) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
(d) Whenever a payment for fractional Rights or fractional shares is to
be made by the Rights Agent, the Company shall (i) promptly prepare and
deliver
29
to the Rights Agent a certificate setting forth in reasonable detail the
facts related to such payment and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agents in the form of fully collected funds to make such payments. The
Rights Agent shall be fully protected in relying upon such a certificate
and shall have no duty with respect to, and shall not be deemed to have
knowledge of any payment for fractional Rights or fractional shares under
any Section of this Agreement relating to the payment of fractional Rights
or fractional shares unless and until the Rights agent have received such a
certificate and sufficient monies.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action expressly given to the Rights Agent
hereunder, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), on his own behalf and for his own
benefit, may enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate (or, prior to
the Distribution Date, such Common Stock) in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office
of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the
Common Stock certificate or Ownership Statement) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
Common Stock certificate or Ownership Statement made by anyone other than
the Company or the Rights
30
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of
a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree judgment or ruling (whether interlocutory
or final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, that the Company must use its best efforts
to have any such order, decree, judgment or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the preparation, delivery,
amendment, administration or 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, damage, judgment, fine, penalty, claim, demand, settlement, cost
or expense, incurred without gross negligence, bad faith or willful
misconduct (as finally determined by a court of competent jurisdiction) on
the part of the Rights Agent, for any action taken, suffered or omitted by
the Rights Agent in connection with the acceptance and administration of
this Agreement, including, without limitation, the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly. The indemnity provided herein shall survive the termination of
this Agreement, the resignation or removal of the Rights Agent, and the
termination and the
31
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for
special, punitive, indirect, consequential or incidental loss or damage of
any kind whatsoever (including but not limited to lost profits), even if
the Rights Agent has been advised of the likelihood of such loss or damage.
Any liability of the Rights Agent under this Agreement shall be limited to
the amount of fees paid by the Company to the Rights Agent.
(b) The Rights Agent shall be authorized to rely on, 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 acceptance and
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Stock or Common Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to
be signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons, or otherwise upon the advice or opinion of
counsel as set forth in Section 20 hereof. The Rights Agent shall not be
deemed to have any duty or notice unless and until the Company has provided
the Rights Agent with actual written notice.
Section 19. 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 shall be a party, or any Person succeeding to the shareholder
services business of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of
the parties hereto; provided, that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of
the predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
32
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been
countersigned but not delivered the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only the
specific duties and obligations expressly set forth in this Agreement (and no
implied duties or obligations) upon the following terms and conditions, by all
of which the Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by
any one of the Chairman of the Board of Directors, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer or the Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted in
good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful
misconduct each as finally determined by a court of competent jurisdiction.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
33
(e) The Rights Agent shall not be under any liability or responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be liable or responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be liable or
responsible for any change in the exercisability of the Rights (including
the Rights becoming null and void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 11, 13, 23 and 24, or the
ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate furnished pursuant to
Section 12, describing such change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of Preferred Stock or other securities will,
when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may be required
by the Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept advice
or instructions with respect to the performance of its duties hereunder
from any person believed by the Rights Agent to be one of the Chairman of
the Board of Directors, the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer or the Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such advice or instructions shall be full
and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted by it in good faith in accordance with such
advice or instructions of any such officer or for any delay in acting while
waiting for such advice or instructions. Any application by the Rights
Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken,
suffered or omitted by the Rights Agent under this Agreement and the date
on and/or after which such action shall be taken or suffered or such
omission shall be effective. The Rights Agent shall not have any liability
for or in respect of any action taken, or suffered by or omission of, the
Rights Agent in accordance with a proposal included in any such application
on or after the date specified in such application (which date shall not be
less than five Business Days after the date any officer of the Company
actually
34
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying
the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other Person or legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, absent gross negligence or
willful misconduct (each as finally determined by a court of competent
jurisdiction)in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has not been properly completed to certify the
holder is not an Acquiring Person (or an Affiliate or Associate thereof), a
Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail, and,
following the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the
35
case may be, and to each transfer agent of the Common Stock or Preferred Stock
by registered or certified mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a Person organized and doing business under the laws
of the United States or any State thereof, which is authorized under such laws
to perform shareholder services and is subject to supervision or examination by
federal or state authority, and (b) which at the time of its appointment as
Rights Agent has, or is an affiliate of such a Person that has, a combined
capital and surplus of at least $50 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock or Preferred Stock, and, following
the Distribution Date, mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Stock following the Distribution Date and prior to the earlier of
the Redemption Date and the Final Expiration Date, the Company may with respect
to shares of Common Stock so issued or sold pursuant to (i) the exercise of
stock options, (ii) under any employee plan or arrangement, (iii) upon the
exercise, conversion or exchange of securities notes or debentures issued by the
Company or (iv) a contractual obligation of the Company in each case existing
prior to the Distribution Date, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale.
36
Section 23. Redemption.
(a) The Board of Directors of the Company may, at any time prior to such
time as any Person becomes an Acquiring Person, redeem all but not less
than all the then outstanding Rights at a redemption price of $.01 per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (the redemption price
being hereinafter referred to as the "Redemption Price"). The redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
The Redemption Price shall be payable at the option of the Company, in
cash, shares of Common Stock, or such other form of consideration as the
Board of Directors shall determine.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to paragraph (a) of this Section 23 (or
at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any such
redemption and prompt written notice thereof to the Rights Agent; provided,
however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. Within 10 days after such
action of the Board of Directors ordering the redemption of the Rights (or
such later time as the Board of Directors may establish for the
effectiveness of such redemption), the Company shall mail a notice of
redemption to the Rights Agent and to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption shall
state the method by which the payment of the Redemption Price will be made.
Section 24. Exchange
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section
11(a)(ii) hereof) for shares of Class A Common Stock or Class B Common
Stock, as the case may be, at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring in respect of the Common Stock
after the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Holders of Rights associated with Class A Common
Stock shall receive Class A Common Stock and holders of
37
Rights associated with Class B Common Stock shall receive Class B Common
Stock in the event the Board of Directors exercises such exchange right.
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after an Acquiring Person
shall have become the Beneficial Owner of shares of Class B Common Stock
aggregating 50% or more of the shares of Class B Common Stock then
outstanding. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exchanged pursuant
to this Section 24(a) shall thereafter be exercisable only in accordance
with Section 13 and may not be exchanged pursuant to this Section 24(a).
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.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that number
and class of shares of Common Stock equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange, with prompt written notice thereof
to the Rights Agent; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. The
Company shall promptly mail a notice of any such exchange to all of the
holders of the Rights so exchanged at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become null and
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) The Company may at its option substitute, and, in the event that
there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall
substitute, to the extent of such insufficiency, for each share of Common
Stock that would otherwise be issuable upon exchange of a Right, a number
of shares of Preferred Stock or fractions thereof (or equivalent preferred
shares as such term is defined in Section 11(b)) having an aggregate
current per share market price (determined pursuant to Section 11(d)
hereof) equal to the current per share market price of one share of Class B
Common Stock (determined pursuant to Section 11(d) hereof) as of the
38
date of issuance of such shares of Preferred Stock or fractions thereof (or
equivalent preferred shares).
(d) The Company shall not, in connection with any exchange pursuant to
this Section 24, be required to issue fractions of shares of Common Stock
or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, the Company shall
pay to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this paragraph (d), the
current market value of a whole share of Common Stock shall be the closing
price of a share of Class B Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred
Stock or to make any other distribution to the holders of its Preferred
Stock (other than a regular quarterly cash dividend), (ii) to offer to the
holders of its Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding Preferred Stock), (iv) to
effect the liquidation, dissolution or winding up of the Company, (v) to
effect any consolidation or merger into or with, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer) in one or more transactions of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or (vi) to declare or pay any dividend on the
Common Stock payable in Common Stock or to effect a subdivision,
combination or consolidation of the Common Stock (by reclassification or
otherwise than by payment of dividends in Common Stock), then, in each such
case, the Company shall give to each holder of a Right Certificate and to
the Rights Agent, each in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the purposes
of such stock dividend, or distribution of rights or warrants, or the date
on which such liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of the Common Stock and/or
Preferred Stock, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of the
Preferred Stock for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the
39
taking of such proposed action or the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, whichever shall be the
earlier.
(b) In case any event described in Section 11(a)(ii) or Section 13 shall
occur then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) and Section 13 hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first class
mail postage prepaid or nationally recognized commercial courier service or
United States Express Mail or by facsimile, addressed (until another address is
filed in writing with the Rights Agent) as follows:
ARAMARK Corporation
ARAMARK Tower
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Secretary
Facsimile: 215-___-____
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first class mail postage prepaid or nationally recognized commercial
courier service or United States Express Mail or by facsimile, addressed (until
another address is filed in writing with the Company) as follows:
[Name]
[Address]
Attention:
Facsimile:
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid or
nationally recognized commercial courier service or United States Express Mail,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Except as provided in the
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the
40
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement in
any respect without the approval of any holders of the Rights. At any time when
the Rights are no longer redeemable, except as provided in the penultimate
sentence of this Section 27, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights; provided, that no such supplement or amendment may (a)
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), (b) cause
the Rights again to become redeemable or (c) cause the Agreement again to become
amendable other than in accordance with this sentence. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall be
made which changes the Redemption Price or that eliminates or alters this
sentence. Upon the delivery of a certificate from an appropriate officer of the
Company which states that the supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment, provided such supplement or amendment does not adversely change or
increase the Rights Agent's rights, duties, liabilities or obligations
hereunder, however any supplement or amendment that does not change or affect
the rights, duties, liabilities or obligations of the Rights Agent shall become
effective immediately upon execution by the Company, whether or not also
executed by the Rights Agent.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock).
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement or applicable to this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State; provided, however, that all provisions regarding the
rights, duties and obligations of the Rights Agent shall be governed by and
construed in accordance with
41
the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 34. Administration. The Board of Directors of the Company (or any
duly constituted and authorized committee thereof) shall have the exclusive
power and authority to administer and interpret the provisions of this Agreement
and to exercise all rights and powers specifically granted to the Board of
Directors or the Company or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or to amend or not amend this Agreement). All such actions,
calculations, determinations and interpretations which are done or made by the
Board of Directors (or such committee) in good faith shall be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and all
other parties. The Rights Agent is entitled to always assume the Board of
Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
Attest: ARAMARK WORLDWIDE CORPORATION
By: By:
------------------------- --------------------------
Name: Name:
Title: Title:
MELLON INVESTOR SERVICES LLC
By:
--------------------------
Name:
Title:
Exhibit A
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
ARAMARK WORLDWIDE CORPORATION
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
___________________
ARAMARK Worldwide Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (hereinafter called
the "Company"), hereby certifies that the following resolution was duly adopted
by the Board of Directors of the Company as required by Section 151 of the
General Corporation Law of the State of Delaware at a meeting duly called and
held on ________ __, 2001:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Company (hereinafter called the "Board of Directors"
or the "Board") in accordance with the provisions of the Company's Amended and
Restated Certificate of Incorporation, as amended to date (hereinafter called
the "Certificate of Incorporation"), the Board of Directors hereby creates a
series of preferred stock, par value $.01 per share, of the Company and hereby
states the designation and number of shares, and fixes the relative rights,
powers and preferences thereof, and the limitations thereof, as follows:
(A) Designation and Amount. The shares of such series shall be
designated as "Series C Junior Participating Preferred Stock" (the "Series
C Preferred Stock") and the number of shares constituting the Series C
Preferred Stock shall be 550,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series C Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Company convertible into Series C Preferred Stock.
2
(B) Dividends and Distributions.
(1) Subject to the rights of the holders of any shares of any
stock of the Company ranking prior and superior to the Series C
Preferred Stock with respect to dividends, the holders of shares of
Series C Preferred Stock, in preference to the holders of Class A
Common Stock, par value $.01 per share (the "Class A Common Stock")
and Class B Common Stock, par value $.01 per share (the "Class B
Common Stock" and, together with the Class A Common Stock, the
"Common Stock") and of any other stock of the Company ranking
junior to the Series C Preferred Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for such purpose, quarterly dividends
payable in cash on the last day of each fiscal quarter of the
Company (each such date being referred to herein as a "Dividend
Payment Date"), commencing on the first Dividend Payment Date after
the first issuance of a share or fraction of a share of Series C
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all quarterly cash dividends and
1,000 times the cash value of the aggregate per share amount of all
quarterly non-cash dividends or other distributions other than a
dividend payable in shares of Common Stock, declared on the Common
Stock since the immediately preceding Dividend Payment Date or,
with respect to the first Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series C Preferred
Stock. In the event the Company shall at any time after ________
__, 2001, declare or pay any dividend on the 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 than by payment of a dividend in
shares of Common Stock, and other than reclassification to combine
classes of Class A Common Stock into one class and classes of Class
B Common Stock into one class) 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 C 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.
(2) The Company shall declare a dividend or distribution on the
Series C Preferred Stock as provided in paragraph (1) of this
Section (B) immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided, that, in the event no dividend
or distribution shall have
3
been declared on the Common Stock during the period between any
Dividend Payment Date and the next subsequent Dividend Payment
Date, a dividend of $10 per share on the Series C Preferred Stock
shall nevertheless be payable, when, as and if declared, on such
subsequent Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative, whether
or not earned or declared, on outstanding shares of Series C
Preferred Stock from the Dividend Payment Date next preceding the
date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Dividend Payment
Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue
is a Dividend Payment Date or is a date after the record date for
the determination of holders of shares of Series C Preferred Stock
entitled to receive a quarterly dividend and before such Dividend
Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series C 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 C Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which
record date shall be not more than 60 days prior to the date fixed
for the payment thereof.
(C) Voting Rights. The holders of shares of Series C Preferred Stock
shall have the following voting rights;
(1) Each whole share of Series C Preferred Stock shall entitle
the holder thereof to 1,000 votes on all matters upon which the
holders of the Common Stock of the Company are entitled to vote.
(2) Except as otherwise provided herein, in the Certificate of
Incorporation or in any other Certificate of Designations creating
a series of Preferred Stock or any similar stock, and except as
otherwise required by law, the holders of shares of Series C
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Company having general voting rights
shall vote together as one class on all matters submitted to a vote
of stockholders of the Company.
(3) Except as set forth herein, or as otherwise provided by law,
holders of Series C Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the
extent they are
4
entitled to vote with holders of Common Stock as set forth herein)
for taking any corporate action.
(D) Certain Restrictions.
(1) Whenever quarterly dividends or other dividends or
distributions payable on the Series C Preferred Stock as provided
in Section (B) are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not earned or
declared, on shares of Series C Preferred Stock outstanding shall
have been paid in full, the Company shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (as to dividends or upon liquidation,
dissolution or winding up) to the Series C Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (as to dividends or upon liquidation,
dissolution or winding up) with the Series C Preferred Stock, except
dividends paid ratably on the Series C Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Preferred Stock, provided that
the Company may at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock of the Company
ranking junior (as to dividends and upon dissolution, liquidation or
winding up) to the Series C Preferred Stock or rights, warrants or options
to acquire such junior stock;
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series C 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 C 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 such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
5
(2) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (1) of this Section (D),
purchase or otherwise acquire such shares at such time and in such manner.
(E) Reacquired Shares. Any shares of Series C Preferred Stock purchased
or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof.
(F) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Company, no distribution shall be made (1)
to the holders of the Common Stock or of shares of any other stock of the
Company ranking junior, upon liquidation, dissolution or winding up, to the
Series C Preferred Stock unless, prior thereto, the holders of shares of
Series C Preferred Stock shall have received an amount equal to the greater
of (i) $1,000 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to
the date of such payment and (ii) an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 1,000 times
the cash value of the aggregate amount to be distributed per share to
holders of shares of Common Stock, or (2) to the holders of shares of stock
ranking on a parity upon liquidation, dissolution or winding up with the
Series C Preferred Stock, except distributions made ratably on the Series C
Preferred Stock and all such 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. In the event the Company shall at
any time after ________ __, 2001, declare or pay any dividend on the 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 than by payment of a dividend in shares of
Common Stock, and other than reclassification to combine classes of Class A
Common Stock into one class and classes of Class B Common Stock into one
class) 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 C
Preferred Stock were entitled immediately prior to such event under the
proviso in clause (1)(ii) 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.
(G) Consolidation, Merger, etc. In case the Company shall enter into any
consolidation, merger, combination or other transaction in which the shares
of Common Stock are converted into, exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
each share of Series C Preferred Stock shall at the same time be
6
similarly converted into, exchanged for or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to
1,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is converted, exchanged or converted. In
the event the Company shall at any time after ________ __, 2001, declare or
pay any dividend on the 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 than by payment of
a dividend in shares of Common Stock, and other than reclassification to
combine classes of Class A Common Stock into one class and classes of Class
B Common Stock into one class) 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 conversion, exchange or change of shares of
Series C 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.
(H) No Redemption. The shares of Series C Preferred Stock shall not be
redeemable from any holder.
(I) Rank. The Series C Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up of the Company, junior to all other classes of
preferred stock and senior to the Common Stock.
(J) Amendment. If any proposed amendment to the Certificate of
Incorporation (including this Certificate of Designations) would alter,
change or repeal any of the preferences, powers or special rights given to
the Series C Preferred Stock so as to affect the Series C Preferred Stock
adversely, then the holders of the Series C Preferred Stock shall be
entitled to vote separately as a class upon such amendment, and the
affirmative vote of two-thirds of the outstanding shares of the Series C
Preferred Stock, voting separately as a class, shall be necessary for the
adoption thereof, in addition to such other vote as may be required by the
General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by its Chairman, President and Chief Executive Officer and
attested by its Secretary this ___ day of ________, 2001.
------------------------------------
Name:
Title:
Attest:
--------------------------
Secretary
Exhibit B
---------
Form of Right Certificate
Certificate No. R- ____ ___ Rights
NOT EXERCISABLE AFTER ________ __, 2011 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED
BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED
IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL
AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
ARAMARK WORLDWIDE CORPORATION
This certifies that ___________ or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of ________ __, 2001, as the same may be amended from time
to time (the "Rights Agreement"), between ARAMARK Worldwide Corporation, a
Delaware corporation (the "Company"), and Mellon Investor Services LLC, as
Rights Agent (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on the earlier of ________ __, 2011
or the earlier expiration of the Rights in accordance with the terms of the
Rights Agreement in accordance with its terms, at the office or agency of the
Rights Agent designated for such purpose, or of its successor as Rights Agent,
one one-thousandth of a fully paid non-assessable share of Series C Preferred
Stock, par value $.01 per share (the "Preferred Stock"), of the Company, at a
purchase price of $___ per one one-thousandth of a share of Preferred Stock (the
"Purchase Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one one-thousandths of a
share of Preferred Stock which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of ________ __, 2001, based on the Preferred Stock as constituted at such
date. As provided in the Rights Agreement, the Purchase Price, the number of
one one-thousandths of a share of Preferred Stock (or other securities or
property) which may be purchased upon the exercise of the Rights and the number
of Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
Notwithstanding anything in the Rights Agreement to the contrary, from
and after the time (the "invalidation time") when any person first becomes an
Acquiring Person (as defined in the Rights Agreement), the Rights evidenced
hereby beneficially owned by (x) any Acquiring Person (or any Affiliate (as
defined in the Rights Agreement) or Associate (as defined in the Rights
Agreement) of any Acquiring Person), (y) a transferee of any Acquiring Person
(or
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any such Affiliate or Associate) who becomes a transferee after the invalidation
time or (z) a transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with the
invalidation time pursuant to either (I) a transfer from the Acquiring Person to
holders of its equity securities or to any person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of Section 11(a)(ii) of the Rights
Agreement, and subsequent transferees of such persons, shall be void without any
further action and any holder hereof shall thereafter have no rights whatsoever
with respect to the Rights evidenced hereby under any provision of the Rights
Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned office or agency of the Rights Agent. The
Company will mail to the holder of this Right Certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be exchanged in whole or in part for shares
of Preferred Stock or shares of the Company's Class A Common Stock or Class B
Common Stock, each par value $.01 per share, in each case in accordance with the
terms of the Rights Agreement.
No fractional shares of Preferred Stock or Common Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
3
hereof, as such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement) or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
4
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ________ __, 2001.
ATTEST: ARAMARK WORLDWIDE CORPORATION
By __________________ By __________________
Countersigned:
MELLON INVESTOR SERVICES LLC
___________________________,
as Rights Agent
By _________________________
Authorized Signature
5
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfer unto ___________________________
____________________________________________________________
(Please print name and address of transferee)
____________________________________________________________
Rights represented by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
___________________ Attorney, to transfer said Rights on the books of the
within-named Company, with full power of substitution.
Dated: _________________
______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
------------------------------------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by, were not acquired by the
undersigned from, and are not being assigned to, an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
________________________
Signature
6
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
To ARAMARK CORPORATION:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock (or other securities or property) issuable upon the exercise of such
Rights and requests that certificates for such shares of Preferred Stock (or
such other securities) be issued in the name of:
______________________________________________________________
(Please print name and address)
______________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivery to:
Please insert social security
or other identifying number
______________________________________________________________
(Please print name and address)
______________________________________________________________
Dated: ____________________
________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by a member of firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc. or a commercial bank or trust company having an office or
correspondent in the United States.
7
Form of Reverse Side of Right Certificate -- continued
_________________________________________________________________
(To be completed)
The undersigned certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement)
______________________
Signature
_________________________________________________________________
NOTICE
------
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
ARAMARK CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF SERIES C PREFERRED STOCK
On ________ __, 2001, pursuant to the merger of the Company's predecessor,
ARAMARK Corporation with and into the Company (the "Merger"), one Preferred
Share Purchase Right (a "Right") was issued for each outstanding share of each
of our Class A Common Stock and Class B Common Stock, each par value $.01 per
share. The Rights are subject to the terms of a Rights Agreement dated ________
__, 2001 between the Company and Mellon Investor Services, LLC, as the Rights
Agent.
The Board of Directors adopted the Rights Agreement to assist the Company in
pursuing its long-term business strategies and enhancing stockholder value by
protecting our stockholders against unsolicited takeover efforts on unfavorable
terms. In general terms, the Rights Agreement works by imposing a significant
penalty upon any person or group which acquires 15% or more of the Company's
outstanding Class B Common Stock after the effective date of the Merger without
the approval of the Board of Directors. Any current stockholder which
beneficially owned more than 15% of our outstanding Class B Common Stock
(including after giving effect to the conversion of Class A Common Stock to
Class B Common Stock) as of the effective date of the Merger may acquire up to
an additional 1% of our outstanding Class B Common Stock without penalty. In
addition, Xxxxxx Xxxxxxxx, the Company's Chairman and Chief Executive Officer,
and certain related entities are exempt from such penalties so long as he and
such entities own no more than ___% of the Company's Class B Common Stock. Any
Company securities that Xx. Xxxxxxxx acquires after the Merger pursuant to
employee benefit plans of the Company will not be counted towards such
limitation.
For those interested in the specific terms of the Rights Agreement, we
provide the following summary of the principal features of the Rights. However,
this description is only a summary and does not purport to be a complete
description of the terms of the Rights. For more information, you should refer
to the complete Rights Agreement, which has been filed on ________ __, 2001 with
the Securities and Exchange Commission as an exhibit to the Registration
Statement on Form S-4 filed by the Company in connection with the Merger. A
copy of the Rights Agreement is available from the Company on request, without
charge.
2
THE RIGHTS.
One Right will be issued for each share of the Company's Class A Common
Stock and Class B Common Stock issued in the Merger. The Rights will initially
trade with, and will be inseparable from, the Class A Common Stock and the Class
B Common Stock. Identical Rights will also accompany any new shares of Class A
Common Stock and Class B Common Stock the Company issues from the effective date
of the Merger until the Distribution Date described below, the redemption of the
Rights or the expiration of the Rights, whichever occurs first. Under certain
circumstances, identical Rights will also accompany any shares of Class A Common
Stock and Class B Common Stock the Company issues after the Distribution Date
but before the redemption or the expiration of the Rights. Until the
Distribution Date, the Rights will be evidenced only by the certificates that
represent shares of Class A Common Stock or Class B Common Stock, as the case
may be.
EXERCISE PRICE OF THE RIGHTS.
If and when the Rights become exercisable, each Right will allow its holder
to purchase from the Company one one-thousandth of a share of Series C Preferred
Stock for $____, which is referred to as the Exercise Price. One one-thousandth
of a share of Series C Preferred Stock will give the holder approximately the
same dividend, voting, and liquidation rights as would one share of Class B
Common Stock.
Prior to exercise, a Right does not give its holder any dividend, voting, or
liquidation rights.
WHEN THE RIGHTS BECOME EXERCISABLE.
The Rights will not be exercisable until:
. 10 days after the public announcement that a person or group has become an
"Acquiring Person" by obtaining beneficial ownership of 15% or more of our
outstanding Class B Common Stock, or, if earlier,
. 10 business days (or a later date determined by our Board of Directors before
any person or group becomes an Acquiring Person) after a person or group
begins, or announces an intention to make, a tender offer or exchange offer,
if the completion of the offer would result in that person or group becoming
an Acquiring Person.
Any current stockholder which beneficially owned more than 15% of our
outstanding Class B Common Stock as of the effective date of the Merger will not
be an Acquiring Person so long as it does not purchase or acquire beneficial
ownership of additional shares of our Class B Common Stock amounting to more
than 1% of our outstanding Class B Common Stock. In addition, Xxxxxx Xxxxxxxx,
the Company's Chairman and Chief Executive Officer, and certain related entities
will not be an Acquiring Person so long as they own no more than ___% of the
Company's Class B Common Stock. Any Company securities that Xx. Xxxxxxxx
acquires after the Merger pursuant to employee benefit plans of the Company will
not be counted towards such limitation.
The Rights Agreement refers to the date when the Rights become exercisable
as the "Distribution Date." Until the Distribution Date, the Company's common
stock certificates (or a current ownership statement issued by the Company with
respect to uncertificated shares) will also evidence the Rights, and any
transfer of shares of common stock will also constitute a transfer of the
associated Rights. After the Distribution Date, the Rights will separate from
the common stock and be evidenced by Rights certificates that we will mail to
all eligible holders of common stock.
3
Any Rights held by an Acquiring Person become void and may not be exercised.
OTHER CONSEQUENCES OF A PERSON OR GROUP BECOMING AN ACQUIRING PERSON.
. FLIP IN. If a person or group becomes an Acquiring Person, all holders of
Rights associated with Class A Common Stock (except the Acquiring Person)
may, for the Exercise Price, purchase that number of shares of the Company's
Class A Common Stock which results from dividing the Exercise Price by 50% of
the market price of the Company's Class B Common Stock prior to the
acquisition, and all holders of Rights associated with the Class B Common
Stock (except for the Acquiring Person) may, for the Exercise Price, purchase
that number of shares of the Company's Class B Common Stock which results
from dividing the Exercise Price by 50% of the market price of the Company's
Class B Common Stock prior to the acquisition.
. FLIP OVER. If the Company is acquired in a merger or similar transaction
after a person or group has become an Acquiring Person, all holders of Rights
except the Acquiring Person may, for the Exercise Price, purchase shares of
the acquiring corporation at a 50% discount to the then current market price.
PROVISIONS OF SERIES C PREFERRED STOCK.
If the Rights are exercised and Series C Preferred Stock is issued, each one
one-thousandth of a share:
. Will not be redeemable;
. Will have the same voting power as one share of the Company's Class B Common
Stock;
. Will entitle its holder to quarterly dividend payments of $.001, or an amount
equal to the cash value of the dividend paid on one share of Class B Common
Stock, whichever is greater;
. Will entitle its holder, if the Company is liquidated, to receive either $1
or an amount equal to the cash value of the payment made on one share of
Class B Common Stock, whichever is greater; and
. If shares of the Company's common stock are exchanged in a merger,
consolidation or similar transaction, will entitle the holder to
consideration equal to the consideration paid on one share of Class B Common
Stock.
REDEMPTION.
The Company's Board of Directors may redeem the Rights for $.01 per Right at
any time before any person or group becomes an Acquiring Person. If the Board
redeems any Rights, it must redeem all of the Rights. Once the Rights are
redeemed, the holders will have only the right to receive the redemption price.
The redemption price will be adjusted if there is a stock split or stock
dividend with respect to our common stock.
EXCHANGE.
After a person or group becomes an Acquiring Person, but before an Acquiring
Person owns 50% or more of our outstanding Class B Common Stock, the Company's
Board of Directors may extinguish the Rights by exchanging one share of Class A
Common Stock or an equivalent security
4
for each Right associated with the Class A Common Stock and one share of Class B
Common Stock or an equivalent security for each Right associated with the Class
B Common Stock. Rights held by the Acquiring Person will be void and will not be
exchanged.
EXPIRATION.
The Rights will expire on ________ __, 2011. The holders of the Rights will
not become entitled to any payment or other consideration on account of the
expiration of the Rights.
ANTI-DILUTION PROVISIONS.
The Board of Directors may adjust the purchase price of the Preferred Stock,
the number of shares of Preferred Stock issuable and the number of outstanding
Rights, in order to prevent dilution that may occur from a stock dividend, a
stock split or a reclassification of the Preferred Stock or common stock. No
adjustments to the purchase price of the Preferred Stock of less than 1% will be
made.
AMENDMENTS TO THE RIGHTS AGREEMENT.
The Board of Directors may amend the terms of the Rights Agreement without
the consent of the holders of the Rights. However, after a person or group
becomes an Acquiring Person, the Board may not amend the Rights Agreement in a
way that adversely affects the holders of the Rights.
