Exhibit 4.1
___________________________________________________________________________
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
December 15, 2000
between
HERSHEY FOODS CORPORATION
and
MELLON INVESTOR SERVICES LLC,
as Rights Agent
____________________________________________________________________________
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
ARTICLE I DEFINITIONS....................................................................................1
1.1 DEFINITIONS............................................................................1
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ARTICLE II THE RIGHTS....................................................................................9
2.1 SUMMARY OF RIGHTS......................................................................9
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2.2 LEGEND ON COMMON SHARES CERTIFICATES...................................................9
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2.3 EXERCISE OF RIGHTS; SEPARATION OF RIGHTS..............................................10
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2.4 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS.......................................12
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2.5 DATE ON WHICH EXERCISE IS EFFECTIVE...................................................13
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2.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES.................13
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2.7 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE...................................14
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2.8 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES.............................15
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2.9 PERSONS DEEMED OWNERS.................................................................15
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2.10 DELIVERY AND CANCELLATION OF CERTIFICATES.............................................16
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2.11 AGREEMENT OF RIGHTS HOLDERS...........................................................16
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ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS.............................17
3.1 FLIP-IN...............................................................................17
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3.2 FLIP-OVER.............................................................................19
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ARTICLE IV THE RIGHTS AGENT.............................................................................20
4.1 GENERAL...............................................................................20
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4.2 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.............................20
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ii
4.3 DUTIES OF RIGHTS AGENT................................................................21
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4.4 CHANGE OF RIGHTS AGENT................................................................23
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ARTICLE V MISCELLANEOUS................................................................................24
5.1 REDEMPTION............................................................................24
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5.2 EXPIRATION............................................................................24
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5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES...................................................25
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5.4 SUPPLEMENTS AND AMENDMENTS............................................................25
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5.5 FRACTIONAL SHARES.....................................................................26
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5.6 RIGHTS OF ACTION......................................................................26
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5.7 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER.............................................26
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5.8 NOTICE OF PROPOSED ACTIONS............................................................26
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5.9 NOTICES...............................................................................27
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5.10 SUSPENSION OF EXERCISABILITY..........................................................27
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5.11 COSTS OF ENFORCEMENT..................................................................28
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5.12 SUCCESSORS............................................................................28
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5.13 BENEFITS OF THIS AGREEMENT............................................................28
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5.14 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC..............................28
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5.15 DESCRIPTIVE HEADINGS..................................................................28
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5.16 GOVERNING LAW.........................................................................29
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5.17 COUNTERPARTS..........................................................................29
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5.18 SEVERABILITY..........................................................................29
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iii
EXHIBITS
Exhibit A Form of Rights Certificate for Common Stock
(Together with Form of Election to Exercise)
Exhibit B Form of Certificate of Designation and Terms of
Series A Participating Preferred Stock
Exhibit C Form of Certificate of Designation and Terms
of Series B Participating Preferred Stock
iv
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time
to time, this "Agreement"), dated as of December 15, 2000, between HERSHEY FOODS
CORPORATION, a Delaware corporation (the "COMPANY"), and MELLON INVESTOR
SERVICES LLC, a New Jersey limited liability company, as Rights Agent (the
"RIGHTS AGENT", which term shall include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a)
authorized and declared a dividend of one right ("RIGHT") in respect of each
share of Common Stock (as hereinafter defined) and Class B Common Stock (as
hereinafter defined) held of record as of the close of business on December 26,
2000 (the "RECORD TIME") payable in respect of each such share at the Record
Time or, if applicable, upon certification by the New York Stock Exchange to the
Securities and Exchange Commission that the Rights have been approved for
listing and registration (the "PAYMENT TIME") and (b) as provided in Section
2.4, authorized the issuance of one Right in respect of each share of Common
Stock and Class B Common Stock issued after the Record Time and prior to the
Separation Time (as hereinafter defined) and, to the extent provided in Section
5.3, each share of Common Stock and Class B Common Stock issued after the
Separation Time;
WHEREAS, subject to the terms and conditions hereof, each Right
entitles the holder thereof, after the Separation Time, to purchase securities
or assets of the Company (or, in certain cases, securities of certain other
entities) pursuant to the terms and subject to the conditions set forth herein;
and
WHEREAS, the Company desires to appoint the Rights Agent to
act on behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein;
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. For purposes of this Agreement, the following terms
have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person who is or becomes the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include (i) Hershey Trust
Company, a Pennsylvania corporation, as trustee for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ School
(together with any successor or other validly appointed trustee, the "Trustee")
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ School as beneficiary under deed of trust dated as of
November 15, 1909 between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and the
Hershey Trust Company, or any Affiliates or Associates of the Trustee or ▇▇▇▇▇▇
▇▇▇▇▇▇▇ School, (ii) any Person who shall become the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock as the result of purchasing
Common Shares from the Trustee in its capacity as trustee or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
School (the "Trust Shares") so long as at the time of such purchase (a "Trust
Transaction"), and after giving effect to such Trust Transaction, such Person
does not become the Beneficial Owner of more than 35% of the voting power of all
of the outstanding Common Shares, until such time thereafter as such Person
shall become the Beneficial Owner (other than (A) by means of a stock dividend
or stock split or (B) as the result of a Trust Transaction after giving effect
to which such Person does not Beneficially Own more than 35% of the voting power
of all of the outstanding Common Shares) of any additional shares of Common
Stock while such Person is, or as the result of which such Person becomes, the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock, (iii)
any Person who is the Beneficial Owner of 15% or more of the outstanding shares
of Common Stock on the date of this Agreement, or any Person who shall become
the Beneficial Owner of 15% or more of the outstanding Common Stock solely as a
result of an acquisition by the Company of shares of Common Stock, until such
time hereafter or thereafter as such Person shall become the Beneficial Owner
(other than (A) by means of a stock dividend or stock split or (B) as the result
of a Trust Transaction after giving effect to which such Person does not
Beneficially Own more than 35% of the voting power of all of the outstanding
Common Shares) of any additional shares of Common Stock while such Person is or
as a result of which such Person becomes the Beneficial Owner of 15% or more of
the outstanding shares of Common Stock, (iv) any Person who becomes the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock but
who acquired Beneficial Ownership of shares of Common Stock without any plan or
intention to seek or affect control of the Company, if such Person promptly
divests, or promptly enters into an agreement with, and satisfactory to, the
Company, in its sole discretion, to divest (without exercising or retaining any
power, including voting power, with respect to such shares), sufficient shares
of Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) so that such Person ceases to be the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock or (v) any Person
who Beneficially Owns shares of Common Stock consisting solely of one or more
(A) shares of Common Stock Beneficially Owned pursuant to the grant or exercise
of an option granted to such Person (an "Option Holder") by the Company in
connection with an agreement to merge with, or acquire, the Company entered into
prior to a Flip-in Date, (B) shares of Common Stock (or securities convertible
into, exchangeable into or exercisable for Common
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Stock) Beneficially Owned by such Option Holder or its Affiliates or Associates
at the time of grant of such option and (C) shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for Common Stock)
acquired by Affiliates or Associates of such Option Holder after the time of
such grant which, in the aggregate, amount to less than 1% of the outstanding
shares of Common Stock. In addition, the Company, any Subsidiary of the Company
and any employee stock ownership or other employee benefit plan of the Company
or a Subsidiary of the Company (or any entity or trustee holding Common Shares
for or pursuant to the terms of any such plan or for the purpose of funding any
such plan or funding other employee benefits for employees of the Company or of
any Subsidiary of the Company) shall not be an Acquiring Person.
"AFFILIATE" and "ASSOCIATE" shall have the respective meanings ascribed to
such terms in Rule 12b-2 under the Exchange Act, as such Rule is in effect on
the date of this Agreement.
"AGREEMENT" shall have the meaning set forth in the Preamble.
A Person shall be deemed the "BENEFICIAL OWNER", and to have "BENEFICIAL
OWNERSHIP" of, and to "Beneficially Own", any securities as to which such Person
or any of such Person's Affiliates or Associates is or may be deemed to be the
beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the Exchange Act, as
such Rules are in effect on the date of this Agreement, as well as any
securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights), warrants
or options, or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner", or to have "Beneficial Ownership" of, or to
"Beneficially Own", any security (i) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange or (ii) solely because such Person or any of such
Person's Affiliates or Associates has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy or consent given in
response to a public proxy or consent solicitation made to more than ten holders
of shares of a class of stock of the Company registered under Section 12 of the
Exchange Act and pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act, except if such power (or the arrangements
relating thereto) is then reportable under Item 6 of Schedule 13D under the
Exchange Act (or any similar provision of a comparable or successor report).
Notwithstanding the foregoing, no officer or director of the Company shall be
deemed to Beneficially Own any securities of any other Person by virtue of any
actions such officer or director takes in such capacity. For purposes of this
Agreement, in determining the percentage of the outstanding shares of Common
Stock with respect to which a Person is
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the Beneficial Owner, all shares as to which such Person is deemed the
Beneficial Owner shall be deemed outstanding.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in New York, New York are generally authorized or
obligated by law or executive order to close.
"CLASS B COMMON STOCK" shall mean the shares of Class B Common Stock, par
value $1.00 per share, of the Company.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m. New York, New
York time on such date or, if such date is not a Business Day, 5:00 p.m. New
York, New York time on the next succeeding Business Day.
"COMMON SHARES" shall mean the shares of Common Stock and Class B Common
Stock.
"COMMON STOCK" shall mean the shares of Common Stock, par value $1.00 per
share, of the Company.
"COMPANY" shall have the meaning set forth in the preamble.
"ELECTION TO EXERCISE" shall have the meaning set forth in Section 2.3(d)
hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"EXCHANGE RATIO" shall have the meaning set forth in Section
3.1(c) hereof.
"EXCHANGE TIME" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"EXERCISE PRICE" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $270.
"EXPANSION FACTOR" shall have the meaning set forth in Section
2.4(a) hereof.
"EXPIRATION TIME" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the Close of Business on the tenth
anniversary of the date of this Agreement, unless extended by action of the
Board of Directors (in which case the applicable time shall be the time at which
it has been so extended) and (iv) immediately
4
prior to the effective time of a consolidation, merger or statutory share
exchange effective pursuant to an agreement to which the Company is a party that
does not constitute a Flip-over Transaction or Event.
"FLIP-IN DATE" shall mean any Stock Acquisition Date or such
later date and time as the Board of Directors of the Company may fix by
resolution adopted prior to the Flip-in Date that would otherwise have occurred.
"FLIP-OVER ENTITY," for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event described in clause (i) of
the definition thereof, the Person issuing any securities into which any Common
Shares are being converted or exchanged and, if no such securities are being
issued, the other Person to such Flip-over Transaction or Event and (ii) in the
case of a Flip-over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the (A) assets
or (B) operating income or cash flow being transferred in such Flip-over
Transaction or Event, provided in all cases if such Person is a Subsidiary of
another Person, the ultimate parent entity shall be the Flip-over Entity.
"FLIP-OVER STOCK" shall mean, as applicable, (i) preferred
stock (the "SERIES A FLIP-OVER STOCK") with terms substantially identical to the
Preferred Stock, including, without limitation, conversion terms such that the
preferred stock can be converted into a series of preferred stock with terms
substantially identical to the Series B Preferred Stock and with a Reference
Package comprised of an equity security ("REFERENCE SECURITY") that prior to the
Flip-over Transaction had the greatest voting power in respect of the election
of directors (or other persons similarly responsible for the direction of the
business and affairs of the Flip-over Entity) but, after the Flip-over
Transaction, is second in voting power only to the equity security referred to
in clause (ii) below and (ii) a series of preferred stock substantially
identical to the Series B Preferred Stock, including without limitation,
conversion terms such that the preferred stock can be converted into the
Reference Security referred to in clause (i) above and with a Reference Package
comprised of an equity security identical to that of the Class B Common Stock,
including the voting provisions.
"FLIP-OVER TRANSACTION OR EVENT" shall mean a transaction or
series of transactions on or after a Flip-in Date in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate in a
statutory share exchange with any other Person if, at the time of consummation
of the consolidation, merger or statutory share exchange or at the time the
Company enters into any agreement with respect to any such consolidation, merger
or statutory share exchange, the Acquiring Person is the Beneficial Owner of 90%
or more of the outstanding shares each of the Common Stock and, to the extent it
then exists, the Class B Common Stock or controls the Board of Directors of the
Company and either (A) any term of or arrangement concerning the treatment of
shares of Common Stock or Class B Common Stock, as the case may be, in such
consolidation, merger or statutory share exchange relating to the Acquiring
Person is not identical to the
5
terms and arrangements relating to other holders of the Common Stock or
Class B Common Stock, as the case may be, or (B) the Person with whom the
transaction or series of transactions occurs is the Acquiring Person or an
Affiliate or Associate of the Acquiring Person or (ii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer) assets (A) aggregating more than 50% of the assets (measured by either
book value or fair market value) or (B) generating more than 50% of the
operating income or cash flow, of the Company and its Subsidiaries (taken as a
whole) to any Person (other than the Company or one or more of its wholly owned
Subsidiaries) or to two or more such Persons which are Affiliates or Associates
or otherwise acting in concert, if, at the time of the entry by the Company (or
any such Subsidiary) into an agreement with respect to such sale or transfer of
assets, the Acquiring Person controls the Board of Directors of the Company. For
purposes of the foregoing description, the term "Acquiring Person" shall include
any Acquiring Person and its Affiliates and Associates, counted together as a
single Person. An Acquiring Person shall be deemed to control the Company's
Board of Directors when, on or following a Stock Acquisition Date, the persons
who were directors of the Company (or persons nominated and/or appointed as
directors by vote of a majority of such persons) before the Stock Acquisition
Date shall cease to constitute a majority of the Company's Board of Directors.
"MARKET PRICE" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date; provided,
HOWEVER, that if any event described in Section 2.4 hereof, or any analogous
event, shall have caused the closing prices used to determine the Market Price
on any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or,
if on any such date the securities are not listed or admitted to trading on any
national securities exchange or quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the securities selected by the Board of Directors of the
Company; PROVIDED, HOWEVER, that if on any such date the securities are not
listed or admitted to trading on a
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national securities exchange or traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith by the
Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
"OPTION HOLDER" shall have the meaning set forth in the
definition of Acquiring Person.
"PAYMENT TIME" shall have the meaning set forth in the
Recitals.
"PERSON" shall mean any individual, firm, partnership, limited
liability company, association, group (as such term is used in Rule 13d-5 under
the Exchange Act, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
"PREFERRED STOCK" shall mean the Series A Participating
Preferred Stock, par value $1.00 per share, of the Company created by a
Certificate of Designation and Terms in substantially the form set forth in
Exhibit B hereto appropriately completed.
"RECORD TIME" shall have the meaning set forth in the
Recitals.
"REDEMPTION PRICE" shall mean an amount equal to one cent
($0.01).
"REDEMPTION TIME" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
"REFERENCE PACKAGE" with respect to the Preferred Stock, shall
have the meaning set forth in the Certificate of Designation in substantially
the form set forth in Exhibit B hereto appropriately completed and, with respect
to the Series B Preferred Stock, shall have the meaning set forth in the
Certificate of Designation in substantially the form set forth in Exhibit C
hereto appropriately completed.
"RIGHT" shall have the meaning set forth in the Recitals.
"RIGHTS AGENT" shall have the meaning set forth in the
Preamble.
"RIGHTS CERTIFICATE" shall have the meaning set forth in
Section 2.3(c) hereof.
"RIGHTS REGISTER" shall have the meaning set forth in Section
2.7(a) hereof.
"SEPARATION TIME" shall mean the earlier of (i) the Close of
Business on the tenth Business Day (or such later date as the Board of Directors
of the Company may
7
from time to time fix by resolution adopted prior to the Separation Time that
would otherwise have occurred) after the date on which any Person commences a
tender or exchange offer which, if consummated, would result in such Person's
becoming an Acquiring Person and (ii) the time of the first event causing a
Flip-in Date to occur; provided, that if the foregoing results in the Separation
Time being prior to the Payment Time, the Separation Time shall be the Payment
Time and provided further, that if any tender or exchange offer referred to in
clause (i) of this paragraph is cancelled, terminated or otherwise withdrawn
prior to the Separation Time without the purchase of any Common Shares in
connection therewith, such offer shall be deemed, for purposes of this
paragraph, never to have been made.
"SERIES A FLIP-OVER STOCK" shall have the meaning set forth in the
definition of Flip-over Stock.
"SERIES B PREFERRED STOCK" shall mean the Series B Participating
Preferred Stock, par value $1.00 per share, of the Company created by a
Certificate of Designation and Terms in substantially the form set forth in
Exhibit C hereto appropriately completed.
"Stock Acquisition Date" shall mean the earlier of (i) the first date
on which there shall be a public announcement by the Company (by any means)
that a Person has become an Acquiring Person or (ii) the date and time on
which any Acquiring Person becomes the Beneficial Owner of more than 35% of
the voting power of all of the outstanding Common Shares.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity or membership interest is
Beneficially Owned, directly or indirectly, by such Person.
"TRADING DAY," when used with respect to any securities, shall mean a day
on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a Business Day.
"Trustee" shall have the meaning set forth in the definition of Acquiring
Person.
"TRUST SHARES" shall have the meaning set forth in the definition of
Acquiring Person.
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"TRUST TRANSACTION" shall have the meaning set forth in the definition of
Acquiring Person.
ARTICLE II
THE RIGHTS
2.1 SUMMARY OF RIGHTS. As soon as practicable after the Record Time, the Company
will mail a letter, that incorporates by reference the terms of this Agreement,
to each holder of record of Common Shares as of the Record Time, at such
holder's address as shown by the records of the Company.
2.2 LEGEND ON COMMON SHARES CERTIFICATES. Certificates for the Common Shares
issued after the Payment Time but prior to the Separation Time shall evidence
one Right for each Common Share represented thereby and shall have impressed on,
printed on, written on or otherwise affixed to them the following legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement, dated as
of December 15, 2000 (as such may be amended from time to time, the
"Rights Agreement"), between Hershey Foods Corporation (the "Company")
and the Rights Agent named therein, the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may become exercisable for securities or assets of the
Company or securities of another entity, may be exchanged for Preferred
Stock or other securities or assets of the Company, may expire, may
become void (if they are "Beneficially Owned" by an "Acquiring Person"
or an Affiliate or Associate thereof, as such terms are defined in the
Rights Agreement, or by any transferee of any of the foregoing) or may
be evidenced by separate certificates and may no longer be evidenced by
this certificate. The Company will mail or arrange for the mailing of a
copy of the Rights Agreement to the holder of this certificate without
charge after the receipt of a written request therefor.
Certificates representing Common Shares that are issued and outstanding at the
Payment Time shall, together with the letter mailed pursuant to Section 2.1,
evidence one Right for each Common Share evidenced thereby notwithstanding the
absence of the foregoing legend.
If the Common Shares issued after the Payment Time but prior
to the Separation Time shall be uncertificated, the registration of such Common
Shares on the stock transfer books of the Company shall evidence one Right for
each Common Share represented thereby and the Company shall mail to every Person
that holds such Common Shares a confirmation of the registration of such Common
Shares on the stock transfer books of the Company, which confirmation will have
impressed, printed, written
9
or stamped thereon or otherwise affixed thereto the above legend. The Company
shall mail or arrange for the mailing of a copy of this Agreement to any Person
that holds Common Shares, as evidenced by the registration of the Common Shares
in the name of such Person on the stock transfer books of the Company, without
charge after the receipt of a written request therefor.
2.3 EXERCISE OF RIGHTS; SEPARATION OF RIGHTS. (a) Subject to Sections 3.1, 5.1
and 5.10 and subject to adjustment as herein set forth, each Right will entitle
the holder thereof, on or after the Separation Time and prior to the Expiration
Time, to purchase, for the Exercise Price, one one-thousandth of a share of
Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
Common Share together, in the case of certificates issued prior to the Payment
Time, with the letter mailed to the record holder thereof pursuant to Section
2.1 (or, if the Common Shares shall be uncertificated, by the registration of
the associated Common Share on the stock transfer books of the Company and the
confirmation thereof provided for in Section 2.2) and will be transferable only
together with, and will be transferred by a transfer (whether with or without
such letter or confirmation) of, such associated share.
(c) Subject to the terms and conditions hereof, on or after
the Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of the Common Shares. Promptly
following the Separation Time, upon receipt by the Rights Agent of notice
thereof and receipt of all other necessary information, the Rights Agent will
mail to each holder of record of a Common Share as of the Separation Time (other
than any Person whose Rights have become void pursuant to Section 3.1(b)), at
such holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate in substantially the form of Exhibit A hereto (a
"RIGHTS CERTIFICATE"), appropriately completed, representing the number of
Rights held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate (but which do not effect the
rights or duties of the Rights Agent) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any national securities exchange or quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights; provided, however, that the Company
shall have no obligation to distribute Rights Certificates to any Acquiring
Person or Affiliate or Associate of an Acquiring Person or any transferee of any
of the foregoing.
(d) Subject to the terms and conditions hereof, Rights may be
exercised on any Business Day on or after the Separation Time and prior to
the
10
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly and properly
completed, accompanied by payment in cash, or by certified or official bank
check or money order payable to the order of the Company, of a sum equal to the
Exercise Price multiplied by the number of Rights being exercised and a sum
sufficient to cover any tax or charge which may be payable in respect of any
transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates (or, if uncertificated, the registration on
the stock transfer books of the Company) for shares or depositary receipts (or
both) in a name other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with a duly and properly
completed Election to Exercise accompanied by payment as set forth in Section
2.3(d), and subject to the terms and conditions hereof, the Rights Agent will
thereupon promptly (i)(A) requisition from a transfer agent stock certificates
evidencing such number of shares or other securities to be purchased or, in the
case of uncertificated shares or other securities, requisition from a transfer
agent a notice setting forth such number of shares or other securities to be
purchased for which registration will be made on the stock transfer books of the
Company (the Company hereby irrevocably authorizing its transfer agents to
comply with all such requisitions) and (B) if the Company elects pursuant to
Section 5.5 not to issue certificates (or effect registrations on the stock
transfer books of the Company) representing fractional shares, requisition from
the depositary selected by the Company depositary receipts representing the
fractional shares to be purchased or requisition from the Company the amount of
cash to be paid in lieu of fractional shares in accordance with Section 5.5 and
(ii) after receipt of such certificates, depositary receipts, notices and/or
cash, deliver the same to or upon the order of the registered holder of such
Rights Certificate, registered (in the case of certificates, depositary receipts
or notices) in such name or names as may be designated by such holder. The
Rights Agent shall have no duty or obligation with respect to this Section and
any other Section of this Agreement relating to fractional shares unless and
until it has received specific instructions (and sufficient cash, if required)
from the Company with respect to its duties and obligations under such Sections.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered (or evidenced by
registration on the stock transfer books of the Company) upon exercise of Rights
shall, at the time of delivery of the certificates (or registration) for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered (or registered) and fully paid and
nonassessable; (ii) take all such action as may be necessary
11
to comply with any applicable requirements of the Securities Act of 1933 or the
Exchange Act, and the rules and regulations thereunder, and any other applicable
law, rule or regulation, in connection with the issuance of any shares upon
exercise of Rights; and (iii) pay when due and payable any and all federal and
state taxes and charges which may be payable in respect of the original issuance
or delivery of the Rights Certificates or of any shares issued upon the exercise
of Rights, provided, that the Company shall not be required to pay any tax or
charge which may be payable in respect of any transfer involved in the transfer
or delivery of Rights Certificates or the issuance or delivery of certificates
(or the registration) for shares in a name other than that of the holder of the
Rights being transferred or exercised.
2.4 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS. (a) In the event
the Company shall at any time after the Record Time and prior to the Separation
Time (i) declare or pay a dividend on any class of Common Shares payable in
Common Stock or Class B Common Stock, as the case may be, (ii) subdivide any
outstanding class of Common Shares or (iii) combine any outstanding class of
Common Shares into a smaller number of shares of Common Stock or Class B Common
Stock, as the case may be, (x) the Exercise Price in effect after such
adjustment will be equal to the Exercise Price in effect immediately prior to
such adjustment divided by the number of shares of Common Stock or Class B
Common Stock (the "Expansion Factor"), that a holder of one share of Common
Stock or Class B Common Stock, as the case may be, immediately prior to such
dividend, subdivision or combination would hold thereafter as a result thereof
and (y) each Right held prior to such adjustment will become that number of
Rights equal to the Expansion Factor, and the adjusted number of Rights will be
deemed to be distributed among the shares of Common Stock or Class B Common
Stock, as the case may be, with respect to which the original Rights were
associated (if they remain outstanding) and the shares issued in respect of such
dividend, subdivision or combination, so that each such share of Common Stock or
Class B Common Stock, as the case may be, will have exactly one Right associated
with it. Each adjustment made pursuant to this paragraph shall be made as of the
payment or effective date for the applicable dividend, subdivision or
combination.
In the event the Company shall at any time after the Record Time and prior to
the Separation Time issue any Common Shares otherwise than in a transaction
referred to in the preceding paragraph, each such Common Share so issued shall
automatically have one new Right associated with it, which Right shall be
evidenced by the certificate representing such share (or, if the Common Shares
shall be uncertificated, such Right shall be evidenced by the registration of
such Common Shares on the stock transfer books of the Company and the
confirmation thereof provided for in Section 2.2). Rights shall be issued by the
Company in respect of Common Shares that are issued or sold by the Company after
the Separation Time only to the extent provided in Section 5.3.
12
(b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Shares (other than pursuant to
any non-extraordinary periodic cash dividend or a dividend paid solely in Common
Shares) whether by dividend, in a reclassification or recapitalization
(including any such transaction involving a merger, consolidation or statutory
share exchange), or otherwise, the Company shall make such adjustments, if any,
in the Exercise Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of Directors of the Company, in
its sole discretion, may deem to be appropriate under the circumstances in order
to adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief,
reasonably detailed statement of the facts, computations and methodology
accounting for such adjustment and (ii) promptly file with the Rights Agent and
with each transfer agent for the Common Shares a copy of such certificate. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained and shall have no duty with respect to and
shall not be deemed to have knowledge of any adjustment unless and until it
shall have received such a certificate.
(d) Rights Certificates shall represent the right to purchase the
securities purchasable under the terms of this Agreement, including any
adjustment or change in the securities purchasable upon exercise of the Rights,
even though such certificates may continue to express the securities purchasable
at the time of issuance of the initial Rights Certificates.
2.5 DATE ON WHICH EXERCISE IS EFFECTIVE. Each Person in whose name any
certificate for shares is issued (or registration on the stock transfer books is
effected) upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares represented thereby on the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price for such Rights (and any applicable taxes and
other governmental charges payable by the exercising holder hereunder) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the stock transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
(or registration) shall be dated, the next succeeding Business Day on which the
stock transfer books of the Company are open.
2.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES. (a) The Rights Certificates shall be executed on behalf of
the Company by
13
its Chairman of the Board, President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Separation Time, the Company will notify, in
writing, the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for counter-signature,
and, subject to Section 3.1(b), the Rights Agent shall manually countersign and
deliver such Rights Certificates to the holders of the Rights pursuant to
Section 2.3(c) hereof. No Rights Certificate shall be valid for any purpose
unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. (a) After the
Separation Time, the Company will cause to be kept a register (the "RIGHTS
REGISTER") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) and (d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights issued
upon any registration of transfer or exchange of Rights Certificates shall be
the valid obligations of the Company, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer
14
in form satisfactory to the Company or the Rights Agent, as the case may be,
duly executed by the holder thereof or such holder's attorney duly authorized in
writing. As a condition to the issuance of any new Rights Certificate under this
Section 2.7, the Company may require the payment of a sum sufficient to cover
any tax or other charge that may be imposed in relation thereto. The Rights
Agent shall have no duty or obligation to take any action under any Section of
this Agreement which requires the payment by a Rights holder of applicable taxes
and charges unless and until the Rights Agent is satisfied that all such taxes
and/or charges have been paid.
(d) The Company shall not register the transfer or exchange of any
Rights which have become void under Section 3.1(b), been exchanged under Section
3.1(c) or been redeemed under Section 5.1.
2.8 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company
shall execute and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a BONA FIDE purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum sufficient to
cover any tax or other charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Rights Agent) connected
therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8
in lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and, subject to Section 3.1(b) shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 PERSONS DEEMED OWNERS. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Share
certificate or
15
notice of transfer, if uncertificated) for registration of transfer, the
Company, the Rights Agent and any agent of the Company or the Rights Agent may
deem and treat the person in whose name such Rights Certificate (or, prior to
the Separation Time, such Common Share certificate or Common Share registration,
if uncertificated) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, including the payment of the
Redemption Price and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary. As used in this Agreement, unless the context
otherwise requires, the term "holder" of any Rights shall mean the registered
holder of such Rights (or, prior to the Separation Time, the associated Common
Shares).
2.10 DELIVERY AND CANCELLATION OF CERTIFICATES. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any Person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Company.
2.11 AGREEMENT OF RIGHTS HOLDERS. Every holder of Rights by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the associated
Common Share;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Share certificate or Common Share
registration, if uncertificated) for registration of transfer, the Company, the
Rights Agent and any agent of the Company or the Rights Agent may deem and treat
the person in whose name the Rights Certificate (or, prior to the Separation
Time, the associated Common Share certificate or Common Share registration, if
uncertificated) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become null and void; and
16
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 FLIP-IN (a) In the event that prior to the Expiration Time a
Flip-in Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Section 5.10), that number
of one one-thousandths of a share of Preferred Stock equal to that number of
shares of Common Stock, having an aggregate Market Price on the Stock
Acquisition Date that gave rise to the Flip-in Date equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that on or after such Stock Acquisition Date any
of the events described in Section 2.4(a) or (b), or any analogous event, shall
have occurred with respect to the Common Shares).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become null and void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be null and void and not transferable or
exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Flip-in Date and prior to the time that an Acquiring Person becomes
the Beneficial Owner of more than 50% of the outstanding voting power of the
Common Shares elect to exchange all (but not less than all) the then outstanding
Rights (which shall not include Rights that have become null and void pursuant
to the provisions of Section 3.1(b)) for shares of Preferred Stock, at an
exchange ratio of one one-thousandth of a share of Preferred Stock, per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that after the Stock Acquisition Date any of the events
described in Section 2.4(a) or (b), or any analogous event, shall have
17
occurred with respect to the Common Shares (such exchange ratio, as adjusted
from time to time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become null and void pursuant to Section 3.1(b)), whether
or not previously exercised, will thereafter represent only the right to receive
a number of one one-thousandths of a share of Preferred Stock equal to the
Exchange Ratio. Promptly after the action of the Board of Directors electing to
exchange the Rights, the Company shall give written notice thereof (specifying
the steps to be taken to receive Common Shares in exchange for Rights) to the
Rights Agent and the holders of the Rights (other than Rights that have become
void pursuant to Section 3.1(b)) outstanding immediately prior thereto by
mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued (or for
whom any registration on the stock transfer books of the Company is made) upon
the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall
for all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate (or registration on the stock
transfer books of the Company) shall be dated (or registered as of) the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of any applicable taxes and other charges payable by the holder was
made; PROVIDED, HOWEVER, that if the date of such surrender and payment is a
date upon which the stock transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate (or registration on the stock transfer books of the Company) shall
be dated (or registered as of) the next succeeding Business Day on which the
stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section 3.1(a)
or (c) to issue a share (or fractional share) of Preferred Stock upon exercise
of or in exchange for Rights, the Company, to the extent permitted by the
Company's Restated Certificate of Incorporation, as amended, at its option, may
substitute therefor shares of Common Stock or Class B Common Stock, as
applicable, at a ratio of one share of Common Stock or Class B Common Stock, as
applicable, for each one-thousandth of a share of the Preferred Stock so
issuable.
(e) In the event that there shall not be sufficient treasury shares or
authorized but unissued Common Shares or Preferred Stock of the Company to
permit the exercise or exchange in full of the Rights in accordance with Section
3.1(a) or if the Company so elects, to make the exchange referred to in Section
3.1(c), the Company shall either (i) call a meeting of stockholders seeking
approval to cause sufficient additional shares to be authorized (provided that
if such approval is not obtained the Company will take the action specified in
clause (ii) of this sentence) or (ii) take such
18
action as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
3.2 FLIP-OVER. (a) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-over Entity, for the benefit of the holders
of the Rights, providing that, upon consummation or occurrence of the Flip-over
Transaction or Event (i) the Flip-over Entity will have duly authorized and
available for issuance sufficient shares of (x) Flip-over Stock and (y) the
classes of common equity securities into which the shares of Flip-over Stock are
convertible, (ii) each Right shall thereafter constitute the right to purchase
from the Flip-over Entity, upon exercise thereof in accordance with the terms
hereof, that number of shares of Series A Flip-over Stock of the Flip-over
Entity having an aggregate Market Price (based on the Market Price of the Common
Stock in the Reference Package) on the date of consummation or occurrence of
such Flip-over Transaction or Event equal to twice the Exercise Price for the
Right for an amount in cash equal to the Exercise Price for the Right (such
right to be appropriately adjusted in order to protect the interests of the
holders of Rights generally in the event that after such date of consummation or
occurrence any of the events described in Section 2.4(a) or (b), or any
analogous event, shall have occurred with respect to the Flip-over Stock) and
(iii) the Flip-over Entity shall thereafter be liable for, and shall assume, by
virtue of such Flip-over Transaction or Event and such supplemental agreement,
all the obligations and duties of the Company pursuant to this Agreement. The
provisions of this Section 3.2 shall apply to successive Flip-over Transactions
or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof pursuant to an agreement entered into by the
Company prior to a Flip-in Date, the Company shall not enter into any agreement
with respect to, consummate or permit to occur any Flip-over Transaction or
Event if at the time thereof there are any rights, warrants or securities
outstanding or any other arrangements, agreements or instruments that would
eliminate or otherwise diminish in any material
19
respect the benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 GENERAL. (a) The Company hereby appoints the Rights Agent to act
as agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation,
execution, delivery, administration and amendment 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, settlement, cost or expense,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent (which gross negligence, bad faith or willful misconduct
must be determined by an order, judgment, decree or ruling of a court of
competent jurisdiction), 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. The indemnity provided herein shall survive the termination
of this Agreement and the termination and expiration of the Rights. The costs
and expenses incurred in successfully enforcing this right of indemnification
shall be paid by the Company.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its acceptance and administration of this Agreement in reliance upon any
certificate for securities (or registration on the stock transfer books of the
Company) purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 4.3 hereof.
4.2 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. (a) Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent is a
party, or any Person succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor
20
Rights Agent under the provisions of Section 4.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 DUTIES OF RIGHTS AGENT. The Rights Agent undertakes only the
duties and obligations expressly imposed by this Agreement (and no implied
duties or obligations) upon the following terms and conditions, by all of which
the Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company or an employee of the Rights Agent), and the advice or
opinion of such counsel will 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 by it 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 deems it necessary or desirable that any fact or matter (including,
without limitation, the identity of any Acquiring Person and the determination
of Market Price) 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 a
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President and by the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate will be full authorization 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.
21
(c) The Rights Agent will be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (which gross negligence, bad faith
or willful misconduct must be determined by an order, judgment, decree or ruling
of a court of competent jurisdiction). 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.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates, if any, for securities purchasable upon exercise of Rights or the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will have no liability nor be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any certificate,
if any, for securities purchasable upon exercise of Rights or Rights Certificate
(except its countersignature thereof); nor will it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 3.1(b) hereof) or any adjustment required under the
provisions of Section 2.4, 3.1 or 3.2 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate contemplated by Section 2.4
describing any such adjustment); nor will it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any securities purchasable upon exercise of Rights or any Rights or as to
whether any securities purchasable upon exercise of Rights will, when issued, be
duly and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(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 the Chairman of the Board,
the President or any Vice President or the Secretary or any Assistant Secretary
or the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or
22
instructions in connection with its duties, and such advice or instructions
shall be full 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 the advice or instructions of
any such person.
(h) The Rights Agent and any stockholder, affiliate, director, officer
or employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith, or willful misconduct
(which gross negligence, bad faith or willful misconduct must be determined by
an order, judgment, decree or ruling of 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 or obligations 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 assured to it.
4.4 CHANGE OF RIGHTS AGENT. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Shares by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Shares by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a Person organized
23
and doing business under the laws of the United States or any state of the
United States, in good standing, which is authorized under such laws to exercise
the powers of the Rights Agent contemplated by this Agreement and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an Affiliate of a Person described in clause (a) of
this sentence that is under control of such Person. After appointment, the
successor Rights Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company will file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares, and mail a notice thereof in
writing to the holders of the Rights. Failure to give any notice provided for in
this Section 4.4, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 REDEMPTION. (a) The Board of Directors of the Company may, at its
option, at any time prior to the Flip-in Date, elect to redeem all (but not less
than all) the then outstanding Rights at the Redemption Price and the Company,
at its option, may pay the Redemption Price either in cash or other securities
of the Company deemed by the Board of Directors, in the exercise of its sole
discretion, to be at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right,
whether or not previously exercised, will thereafter represent only the right to
receive the Redemption Price in cash or securities, as determined by the Board
of Directors. Promptly after the Rights are redeemed, the Company shall give
written notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice in accordance with Section 5.9.
5.2 EXPIRATION. The Rights and this Agreement shall expire at
the Expiration Time and no Personshall have any rights pursuant to this
Agreement or any
24
Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1 or 5.1 hereof , respectively.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of Common Shares by the Company following
the Separation Time and prior to the Expiration Time pursuant to the terms of
securities convertible or redeemable into Common Shares (other than any such
securities issued or issuable in connection with the exercise or exchange of
Rights or upon conversion of shares of Class B Common Stock after the Separation
Time) or to options, in each case issued or granted prior to, and outstanding
at, the Separation Time, the Company shall issue to the holders of such Common
Shares, Rights Certificates representing the appropriate number of Rights in
connection with the issuance or sale of such Common Shares; PROVIDED, HOWEVER,
in each case, (i) no such Rights Certificate shall be issued, if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
to the Person to whom such Rights Certificates would be issued, (ii) no such
Rights Certificates shall be issued if, and to the extent that, appropriate
adjustment shall have otherwise been made in lieu of the issuance thereof, and
(iii) the Company shall have no obligation to distribute Rights Certificates to
any Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.
5.4 SUPPLEMENTS AND AMENDMENTS. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) prior to the Flip-in Date, in any respect and (ii) on or
after the Flip-in Date, to make any changes that the Company may deem necessary
or desirable and which shall not materially adversely affect the interests of
the holders of Rights generally or in order to cure any ambiguity or to correct
or supplement any provision contained herein which may be inconsistent with any
other provisions herein or otherwise defective. The Rights Agent will, upon
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment complies with this Section 5.4,
duly execute and deliver any supplement or amendment hereto requested by the
Company which satisfies the terms of the preceding sentence, provided that any
supplement or amendment shall become effective immediately upon execution by the
Company, whether or not also executed by the Rights Agent. Notwithstanding
anything contained in this Agreement to the contrary, the Rights Agent may, but
shall not be obligated to, enter into any supplement or amendment that affects
only the rights, duties, obligations or indemnities of the Rights Agent
hereunder.
25
5.5 FRACTIONAL SHARES. If the Company elects not to issue certificates
representing (or register on the stock transfer books of the Company) fractional
shares upon exercise, exchange or redemption of Rights, the Company shall, in
lieu thereof, in the sole discretion of its Board of Directors, either (a)
evidence such fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary selected by it,
providing that each holder of a depositary receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled as a
beneficial owner of such fractional share, or (b) pay to the registered holder
of such Rights the appropriate fraction of the Market Price per share in cash.
5.6 RIGHTS OF ACTION. Subject to the terms of this Agreement
(including Sections 3.1(b) and 5.14), rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any Rights,
without the consent of the Rights Agent or of the holder of any other Rights,
may, on such holder's own behalf and for such holder's own benefit and the
benefit of other holders of Rights, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights in the manner
provided in such holder's Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a 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 Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS. In case the Company shall propose on
or after the Separation Time and prior to the Expiration Time (i) to effect or
permit a Flip-over Transaction or Event or (ii) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 5.9 hereof, a
notice of such proposed action, which shall specify the date on which such
Flip-over Transaction or Event, liquidation, dissolution,
26
or winding up is to take place, and such notice shall be so given at least 20
Business Days prior to the date of the taking of such proposed action.
5.9 NOTICES. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Hershey Foods Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel and Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Mellon Investor Services LLC
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ and ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Relationship Manager
With a copy to:
Mellon Investor Services LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Shares. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
5.10 SUSPENSION OF EXERCISABILITY. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 3.1 or to comply with federal or state securities laws, the Company may
suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with
27
such laws. In the event of any such suspension, the Company shall issue as
promptly as practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended (with prompt
written notice thereof to the Rights Agent). Notice thereof pursuant to Section
5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 COSTS OF ENFORCEMENT. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
5.13 BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) done
or made by the Board, shall (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company to any liability to the holders of
the Rights. The Rights Agent shall always be entitled to assume that the
Company's Board of Directors acted in good faith and shall be fully protected
and incur no liability in reliance thereon.
5.15 DESCRIPTIVE HEADINGS. Descriptive headings appear herein
for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
28
5.16 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT 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 THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
5.17 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
HERSHEY FOODS CORPORATION
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President,
General Counsel
and Secretary
MELLON INVESTOR SERVICES LLC,
As Rights Agent
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
____________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Vice President
29
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR
ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
HERSHEY FOODS CORPORATION
This certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Stockholder Protection Rights Agreement, dated
as of December 15, 2000 (as amended from time to time, the "RIGHTS AGREEMENT"),
between Hershey Foods Corporation, a Delaware corporation (the "COMPANY"), and
Mellon Investor Services LLC, a New Jersey limited liability company, as Rights
Agent (the "RIGHTS AGENT", which term shall include any successor Rights Agent
under the Rights Agreement), to purchase from the Company at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on December 15, 2010, one one-thousandth of a fully paid
share of Series A Participating Preferred Stock, par value $1.00 per share (the
"SERIES A PREFERRED STOCK"), of the Company (subject to adjustment as provided
in the Rights Agreement) at the Exercise Price referred to below, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Exercise duly executed at the office of the Rights Agent designated for such
purpose. The Exercise Price shall initially be $270 per Right and shall be
subject to adjustment in certain events as provided in the Rights Agreement.
Under certain circumstances, each one one-thousandth of a share of
Series A Preferred Stock held by a holder of a share of Class B Common Stock at
the Separation Time may be converted at the election of the holder thereof into
one one-thousandth of a fully paid share of Series B Participating Preferred
Stock, par value $1.00 per share (the "SERIES B PREFERRED STOCK"), of the
Company. The procedures to be followed and
limitations on effecting such conversion are set forth in the Certificate of
Designation and Terms of the Series A Preferred Stock.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities of the Company
other than Series A Preferred Stock or assets of the Company, all as provided in
the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates surrendered.
If this Rights Certificate shall be exercised in part, the registered holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Rights Certificate may be (a) redeemed by the Company under
certain circumstances, at its option, at a redemption price of $0.01 per Right
or (b) exchanged by the Company under certain circumstances, at its option, for
one share of Common Stock or Class B Common Stock, as applicable, or one
one-thousandth of a share of Series A Preferred Stock per Right (or, in certain
cases, other securities or assets of the Company), subject in each case to
adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a 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 Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
A-2
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Date: ____________
ATTEST: HERSHEY FOODS CORPORATION
___________________________ By______________________
Secretary
Countersigned:
MELLON INVESTOR SERVICES LLC,
As Rights Agent
By____________________________
Authorized Signature
A-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer this Rights Certificate.)
FOR VALUE RECEIVED ________________________ hereby
sells, assigns and transfers unto ______________________________________
(Please Print name
______________________________________________________________
and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to
name as written upon the face
of this Rights Certificate in
every particular, without
alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
Exchange Act Rule 17Ad-15.
______________________________________________________
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge
of the undersigned, have never been, Beneficially Owned by an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights Agreement).
__________________________
Signature
________________________________________________________
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
-2-
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: HERSHEY FOODS CORPORATION
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Series A Participating Preferred Stock
issuable upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
___________________________________
ADDRESS:
___________________________________
SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFICATION NUMBER:
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
___________________________________
ADDRESS:
___________________________________
SOCIAL SECURITY OR OTHER TAXPAYER
IDENTIFICATION NUMBER:
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to
name as written upon the
face of the attached Rights
Certificate in every
particular, without
alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
Exchange Act Rule 17Ad-15.
______________________________________________________________
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and Common Shares, that the Rights evidenced by the attached Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
_________________________
Signature
------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
-2-
EXHIBIT B
FORM OF CERTIFICATE OF DESIGNATION AND TERMS
OF SERIES A PARTICIPATING PREFERRED STOCK OF
HERSHEY FOODS CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delware
We, the undersigned, ____________________ and
____________________, the ____________________, and __________, respectively, of
Hershey Foods Corporation, a Delaware corporation (the "CORPORATION"), do hereby
certify as follows:
Pursuant to authority granted by Article FOURTH of the Restated
Certificate of Incorporation of the Corporation, as amended, and in accordance
with the provisions of Section 151 of the General Corporation Law of the State
of Delaware, the Board of Directors of the Corporation has adopted the following
resolutions fixing the designation and certain terms, powers, preferences and
other rights of a new series of the Corporation's Preferred Stock, par value
$1.00 per share, and certain qualifications, limitations and restrictions
thereon:
RESOLVED, that there is hereby established a series of Preferred
Stock, par value $1.00 per share, of the Corporation, and the designation
and certain terms, powers, preferences and other rights of the shares of
such series, and certain qualifications, limitations and restrictions
thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series
shall be "Series A Participating Preferred Stock" (hereinafter
called "THIS SERIES"). Each share of this Series shall be
identical in all respects with the other shares of this Series
except as to the dates from and after which dividends thereon
shall be cumulative and except as otherwise herein provided.
(ii) The number of shares in this Series shall initially
be _______, which number may from time to time be increased or
decreased (but not below the number then outstanding) by the
Board of Directors. Shares of this Series purchased by the
Corporation or converted into Common Stock or into a different
series of Preferred Stock of the Corporation shall be
cancelled and shall revert to authorized and designated as to
series, but unissued shares of Preferred Stock. Shares of this
Series may be issued in fractional shares which are whole
number multiples of one one-thousandth of a share, which
fractional shares shall entitle the holder, in proportion to
such holder's fractional share, to all rights of a holder of a
whole share of this Series.
(iii) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by
the Board of Directors, but only out of funds legally
available therefor, dividends, (A) on each date that dividends
or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) are payable on or
in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of
this Series equal to the aggregate amount of dividends or
other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) that would be
payable on such date to a holder of the Reference Package and
(B) on the last day of March, June, September and December in
each year, in an amount per whole share of this Series equal
to the amount by which $10 exceeds the aggregate dividends
paid per whole share of this Series during the three month
period ending on such last day. Each such dividend shall be
paid to the holders of record of shares of this Series on the
date, not exceeding sixty days preceding such dividend or
distribution payment date, fixed for the purpose by the Board
of Directors in advance of payment of each particular dividend
or distribution. Dividends on each full and each fractional
share of this Series shall be cumulative from the date such
full or fractional share is originally issued; provided that
any such full or fractional share originally issued after a
dividend record date and on or prior to the dividend payment
date to which such record date relates shall not be entitled
to receive the dividend payable on such dividend payment date
or any amount in respect of the period from such original
issuance to such dividend payment date.
The term "Reference Package" shall initially
mean 1000 shares of Common Stock, par value $1.00 per share
("COMMON STOCK"), of the Corporation. In the event the
Corporation shall at any time after the close of business on
________, ____*/f1/ (A) declare or pay a dividend on any
Common Stock payable in Common Stock, (B) subdivide any Common
Stock or (C) combine any Common Stock into a smaller number
------------------------------
/f1/* For a certificate of designation relating to shares to be issues
pursuant to Section 2.3 of the Rights Agreement, insert the Separation
Time. For a certificate of designation relating to shares to be issued
pursuant to Section 3.1(d) of the Rights Agreement, insert the Flip-in
Date.
B-2
of shares, then and in each such case the Reference Package
after such event shall be the Common Stock that a holder of
the Reference Package immediately prior to such event would
hold thereafter as a result thereof.
Holders of shares of this Series shall not be
entitled to any dividends, whether payable in cash, property
or stock, in excess of full cumulative dividends, as herein
provided on this Series. This Series shall rank pari passu in
all respects with the Series B Participating Preferred Stock
of the Company except with respect to voting rights.
So long as any shares of this Series are
outstanding, no dividend (other than a dividend in Common
Stock or in any other stock ranking junior to this Series as
to dividends and upon liquidation) shall be declared or paid
or set aside for payment or other distribution declared or
made upon the Common Stock or Class B Common Stock or upon any
other stock ranking junior to this Series as to dividends or
upon liquidation, unless the full cumulative dividends
(including the dividend to be paid upon payment of such
dividend or other distribution) on all outstanding shares of
this Series shall have been, or shall contemporaneously be,
paid. When dividends are not paid in full upon this Series and
any other stock ranking on a parity as to dividends with this
Series, all dividends declared upon shares of this Series and
any other stock ranking on a parity as to dividends shall be
declared pro rata so that in all cases the amount of dividends
declared per share on this Series and such other stock shall
bear to each other the same ratio that accumulated dividends
per share on the shares of the Series and such other stock
bear to each other. Neither the Common Stock or Class B Common
Stock nor any other stock of the Corporation ranking junior to
or on a parity with this Series as to dividends or upon
liquidation may be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares
of any such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking junior
to this Series as to dividends and upon liquidation), unless,
in each case, the full cumulative dividends (including the
dividend to be due upon payment of such dividend,
distribution, redemption, purchase or other acquisition) on
all outstanding shares of this Series shall have been, or
shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation,
reclassification or other transaction in which the Common
Shares are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case the shares of this Series shall at the same time be
similarly exchanged or changed in an amount per whole share
equal to the aggregate amount of stock, securities, cash
and/or any other property
B-3
(payable in kind), as the case may be, that a holder of the
Reference Package would be entitled to receive as a result of
such transaction.
(v) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether
voluntary or involuntary, the holders of full and fractional
shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of
the Common Stock or Class B Common Stock or any other stock of
the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of
this Series equal to the greater of (A) $__________*/f2/ or
(B) the aggregate amount distributed or to be distributed in
connection with such liquidation, dissolution or winding up to
a holder of the Reference Package (such greater amount being
hereinafter referred to as the "Liquidation Preference"),
together with accrued dividends to such distribution or
payment date, whether or not earned or declared. If such
payment shall have been made in full to all holders of shares
of this Series, the holders of shares of this Series as such
shall have no right or claim to any of the remaining assets of
the Corporation.
In the event the assets of the Corporation
available for distribution to the holders of shares of this
Series upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders
are entitled pursuant to the first paragraph of this Section
(v), no such distribution shall be made on account of any
shares of any other class or series of Preferred Stock ranking
on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of
this Series, ratably in proportion to the full distributable
amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or
winding up.
Upon the liquidation, dissolution or winding
up of the Corporation, the holders of shares of this Series
then outstanding shall be entitled to be paid out of assets of
the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to the
first paragraph of this Section (v) before any payment shall
be made to the holders of Common Stock or Class B Common Stock
or any other stock of the Corporation ranking junior upon
liquidation to this Series.
------------------------------
/f2/* Insert an amount equal to 10 times the Exercise Price in effect
as of the Separation Time.
B-4
For the purposes of this Section (v), the
consolidation or merger of, or binding share exchange by, the
Corporation with any other corporation shall not be deemed to
constitute a liquidation, dissolution or winding up of the
Corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of
stockholders required by law or by the Restated Certificate of
Incorporation, as amended, of the Corporation and except as
otherwise required by law, each share (or fraction thereof) of
this Series shall, on any matter, vote as a class with any
other capital stock comprising part of the Reference Package
and shall have the number of votes thereon that a holder of
the Reference Package (or a similar fraction thereof) would
have.
(viii) To the extent any holder of this Series was the
record holder of Class B Common Stock at the Separation Time
(a "CLASS B HOLDER"), as reflected in the stock transfer books
of the Company, such holder may convert one one-thousandth of
a share of this Series for every share of Class B Common Stock
held as of Separation Time at any time at the election of the
holder thereof into one one-thousandth of a fully paid share
of Series B Participating Preferred Stock, par value $1.00 per
share (the "SERIES B PREFERRED STOCK") of the Corporation. Any
such Class B Holder may elect to convert any or all of such
one one-thousandths of a share of this Series at one time or
at various times in such Class B Holder's discretion but in no
event shall such Holder be able to convert more
one-thousandths of a share of this Series than the number of
shares of Class B Common Stock held at the Separation Time.
Such right shall be exercised by the surrender of the
certificate representing each one one-thousandth of a share of
this Series to be converted to the agent for the registration
of transfer of shares of this Series at its office, or to the
Corporation at its principal executive offices, accompanied by
a written notice of the election by the holder thereof to
convert, a statement (the "Ownership Statement") certifying
the number of, and if requested further identifying the,
shares of Class B Common Stock held as of the Separation Time
and (if so required by the transfer agent or by the
Corporation) by instruments of transfer, in form satisfactory
to the transfer agent and to the Corporation, duly executed by
such holder or his duly authorized attorney. The issuance of a
certificate or certificates for shares of Series B Preferred
Stock upon conversion of shares of this Series shall be made
without charge for any stamp or other similar tax in respect
of such issuance. However, if any such certificate or
certificates is or are to be issued in a name other than that
of the holder of the share or shares of this Series converted,
the person or persons requesting the issuance thereof shall
pay to the transfer agent or to the Corporation the amount of
any tax which
B-5
may be payable in respect of any such transfer, or shall
establish to the satisfaction of the transfer agent or of the
Corporation that such tax has been that such tax has been
paid. As promptly as practicable after the surrender for
conversion of a certificate or certificates representing
shares of this Series and the payment of any tax as
hereinbefore provided, the Corporation, subject to
verification of the Ownership Statement, will deliver or cause
to be delivered at the office of the transfer agent to, or
upon the written order of, the holder of such certificate or
certificates, a certificate or certificates representing the
number of shares of the Series B Preferred Stock issuable upon
such conversion, issued in such name or names as such holder
may direct. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of the
surrender of the certificate or certificates representing
shares of this Series (if on such date the transfer books of
the Corporation shall be closed, then immediately prior to the
close of business on the first date thereafter that said books
shall be open), and all rights of such holder arising from
ownership of shares of this Series shall cease at such time,
and the person or persons in whose name or names the
certificate or certificates representing shares of the Series
B Preferred Stock are to be issued shall be treated for all
purposes as having become the record holder or holders of such
shares of the Series B Preferred Stock at such time and shall
have and may exercise all the rights and powers appertaining
thereto.
(ix) For so long as there are shares of Class B Common
Stock outstanding, this Series shall be convertible into
Series B Preferred Stock in accordance with Paragraph (viii)
above. Immediately upon the automatic conversion of all
outstanding shares of Class B Common Stock into shares of
Common Stock pursuant to the terms of the Restated Certificate
of Incorporation of the Corporation, as amended, each one
one-thousandth of a share of this Series which is then
outstanding shall, without any action by the Board of
Directors of the Corporation or the holder or holders thereof,
automatically convert into and become for all purposes a share
of the Common Stock, subject to a sufficient number of shares
of Common Stock being authorized and available for issuance to
permit such conversion. To the extent a sufficient number of
shares of Common Stock is not authorized and available for
issuance to permit the conversion set forth in the previous
sentence, then the one one-thousandths of a share of this
Series shall be converted into Common Stock on a pro-rata
basis to the extent possible given the number of shares of
Common Stock that is authorized and available for issuance.
The Board of Directors of the Corporation is hereby authorized
to take such actions, consistent with the Delaware General
Corporation Law, as it
B-6
deems appropriate or advisable with respect to the replacement
of certificates then outstanding evidencing ownership of this
Series, or otherwise, in order to carry into effect the
foregoing provisions.
IN WITNESS WHEREOF, the undersigned have signed and attested
this certificate on the___________ day of _________, _____.
__________________________
Attest:
______________________________
B-7
EXHIBIT C
FORM OF CERTIFICATE OF DESIGNATION AND TERMS
OF SERIES B PARTICIPATING PREFERRED STOCK OF
HERSHEY FOODS CORPORATION
Pursuant to Section 151 of the General
Corporation Law of the State of Delware
---------------------------------------
We, the undersigned, ____________________ and
____________________, the ____________________, and __________, respectively, of
Hershey Foods Corporation, a Delaware corporation (the "CORPORATION"), do hereby
certify as follows:
Pursuant to authority granted by Article FOURTH of the
Restated Certificate of Incorporation of the Corporation, as amended, and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the Board of Directors of the Corporation has adopted the
following resolutions fixing the designation and certain terms, powers,
preferences and other rights of a new series of the Corporation's Preferred
Stock, par value $1.00 per share, and certain qualifications, limitations and
restrictions thereon:
RESOLVED, that there is hereby established a series of
Preferred Stock, par value $1.00 per share, of the Corporation, and the
designation and certain terms, powers, preferences and other rights of
the shares of such series, and certain qualifications, limitations and
restrictions thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series
shall be "Series B Participating Preferred Stock" (hereinafter
called "THIS SERIES"). Each share of this Series shall be
identical in all respects with the other shares of this Series
except as to the dates from and after which dividends thereon
shall be cumulative.
(ii) The number of shares in this Series shall initially
be _______, which number may from time to time be increased or
decreased (but not below the number then outstanding) by the
Board of Directors. Shares of this Series purchased by the
Corporation or converted into Common Stock or into a different
series of Preferred Stock of the Corporation shall be
cancelled and shall revert to authorized but unissued shares
of Preferred Stock undesignated as to series. Shares of this
Series may be issued in fractional shares which are whole
number multiples of one one-thousandth of a share, which
fractional shares shall entitle the holder, in proportion to
such holder's fractional share, to all rights of a holder of a
whole share of this Series.
(iii) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by
the Board of Directors, but only out of funds legally
available therefor, dividends, (A) on each date that dividends
or other distributions (other than dividends or distributions
payable in Class B Common Stock of the Corporation) are
payable on or in respect of Class B Common Stock comprising
part of the Reference Package (as defined below), in an amount
per whole share of this Series equal to the aggregate amount
of dividends or other distributions (other than dividends or
distributions payable in Class B Common Stock of the
Corporation) that would be payable on such date to a holder of
the Reference Package and (B) on the last day of March, June,
September and December in each year, in an amount per whole
share of this Series equal to the amount by which $9.091
exceeds the aggregate dividends paid per whole share of this
Series during the three month period ending on such last day.
Each such dividend shall be paid to the holders of record of
shares of this Series on the date, not exceeding sixty days
preceding such dividend or distribution payment date, fixed
for the purpose by the Board of Directors in advance of
payment of each particular dividend or distribution. Dividends
on each full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional
share originally issued after a dividend record date and on or
prior to the dividend payment date to which such record date
relates shall not be entitled to receive the dividend payable
on such dividend payment date or any amount in respect of the
period from such original issuance to such dividend payment
date.
The term "Reference Package" shall initially
mean 1000 shares of Class B Common Stock, par value $1.00 per
share ("CLASS B COMMON STOCK"), of the Corporation. In the
event the Corporation shall at any time after the close of
business on ________, ____*.f1/ (A) declare or pay a dividend
on any Class B Common Stock payable in Class B Common Stock,
(B) subdivide any Class B Common Stock or
----------------------
/f1/* For certificate of designation relating to shares to be issued
pursuant to Section 2.3 of the Rights Agreement, insert the
Separation Time. For a certificate of designation relating to
shares to be issued pursuant to Section 3.1(d) of the Rights
Agreement, insert the Flip-in Date.
C-2
(C) combine any Class B Common Stock into a smaller number of
shares, then and in each such case the Reference Package after
such event shall be the Class B Common Stock that a holder
of the Reference Package immediately prior to such event
would hold thereafter as a result thereof.
Holders of shares of this Series shall not
be entitled to any dividends, whether payable in cash,
property or stock, in excess of full cumulative dividends, as
herein provided on this Series. This Series shall rank pari
passu in all respects with the Series A Participating
Preferred Stock of the Corporation except with respect to
voting rights.
So long as any shares of this Series are
outstanding, no dividend (other than a dividend in Class B
Common Stock or in any other stock ranking junior to this
Series as to dividends and upon liquidation) shall be declared
or paid or set aside for payment or other distribution
declared or made upon the Common Stock or Class B Common Stock
or upon any other stock ranking junior to this Series as to
dividends or upon liquidation, unless the full cumulative
dividends (including the dividend to be paid upon payment of
such dividend or other distribution) on all outstanding shares
of this Series shall have been, or shall contemporaneously be,
paid. When dividends are not paid in full upon this Series and
any other stock ranking on a parity as to dividends with this
Series, all dividends declared upon shares of this Series and
any other stock ranking on a parity as to dividends shall be
declared pro rata so that in all cases the amount of dividends
declared per share on this Series and such other stock shall
bear to each other the same ratio that accumulated dividends
per share on the shares of the Series and such other stock
bear to each other. Neither the Common Stock or Class B Common
Stock nor any other stock of the Corporation ranking junior to
or on a parity with this Series as to dividends or upon
liquidation may be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares
of any such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking junior
to this Series as to dividends and upon liquidation), unless,
in each case, the full cumulative dividends (including the
dividend to be due upon payment of such dividend,
distribution, redemption, purchase or other acquisition) on
all outstanding shares of this Series shall have been, or
shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation,
reclassification or other transaction in which the Common
Shares are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case the shares of this Series shall at the same time be
similarly exchanged or changed in an amount per whole share
equal to the
C-3
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, that a holder
of the Reference Package would be entitled to receive as a
result of such transaction.
(v) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether
voluntary or involuntary, the holders of full and fractional
shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of
the Common Stock or Class B Common Stock or any other stock of
the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of
this Series equal to the greater of (A) $__________*/f2/ or
(B) the aggregate amount distributed or to be distributed in
connection with such liquidation, dissolution or winding up to
a holder of the Reference Package (such greater amount being
hereinafter referred to as the "Liquidation Preference"),
together with accrued dividends to such distribution or
payment date, whether or not earned or declared. If such
payment shall have been made in full to all holders of shares
of this Series, the holders of shares of this Series as such
shall have no right or claim to any of the remaining assets of
the Corporation.
In the event the assets of the Corporation
available for distribution to the holders of shares of this
Series upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders
are entitled pursuant to the first paragraph of this Section
(v), no such distribution shall be made on account of any
shares of any other class or series of Preferred Stock ranking
on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of
this Series, ratably in proportion to the full distributable
amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or
winding up.
Upon the liquidation, dissolution or winding
up of the Corporation, the holders of shares of this Series
then outstanding shall be entitled to be paid out of assets of
the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to the
first paragraph of this Section (v) before any payment shall
be made to the holders of Common Stock or Class B Common Stock
or any other stock of the Corporation ranking junior upon
liquidation to this Series.
----------------------
/f2/* Insert an amount equal to 10 times the Exercise Price in effect
as of the Separation Time.
C-4
For the purposes of this Section (v), the
consolidation or merger of, or binding share exchange by, the
Corporation with any other corporation shall not be deemed to
constitute a liquidation, dissolution or winding up of the
Corporation.
(vi) Shares of this Series (or fractions thereof) shall
not be redeemable. Shares of this Series (or fractions
thereof) shall only be issued in connection with the
conversion of shares of Series A Participating Preferred Stock
(or fractions thereof) of the Corporation ("Series A Preferred
Stock").
(vii) In addition to any other vote or consent of
stockholders required by law or by the Restated Certificate of
Incorporation, as amended, of the Corporation and except as
otherwise required by law, each share of this Series (or
fraction thereof) shall, on any matter, vote as a class with
any other capital stock comprising part of the Reference
Package and shall have the number of votes thereon that a
holder of the Reference Package (or a similar fraction
thereof) would have.
(viii) Each one one-thousandth of a share of this Series
may at any time be converted at the election of the holder
thereof into one one-thousandth of a share of Series A
Preferred Stock. Any holder of one one-thousandth of a share
of this Series may elect to convert any or all of such one
one-thousandths of a share at one time or at various times in
such holder's discretion. Such right shall be exercised by the
surrender of the certificate(s) representing the number of one
one-thousandths of a share of this Series to be converted to
the agent for the registration of transfer of shares of this
Series at its office, or to the Corporation at its principal
executive offices, accompanied by a written notice of the
election by the holder thereof to convert and (if so required
by the transfer agent or by the Corporation) by instruments of
transfer, in form satisfactory to the transfer agent and to
the Corporation, duly executed by such holder or his duly
authorized attorney. The issuance of a certificate or
certificates for a number of one one-thousandths of a share of
Series A Preferred Stock upon conversion of a number of one
one-thousandths of a share of this Series shall be made
without charge for any stamp or other similar tax in respect
of such issuance. However, if any such certificate or
certificates is or are to be issued in a name other than that
of the holder of the share or shares of this Series converted,
the person or persons requesting the issuance thereof shall
pay to the transfer agent or to the Corporation the amount of
any tax which may be payable in respect of any such transfer,
or shall establish to the satisfaction of the transfer agent
or of the Corporation that such tax has been paid. As promptly
as practicable after the surrender for conversion of a
certificate or certificates representing one
C-5
one-thousandths of a share of this Series and the payment of
any tax as hereinbefore provided, the Corporation will deliver
or cause to be delivered at the office of the transfer agent
to, or upon the written order of, the holder of such
certificate or certificates, a certificate or certificates
representing the number of one one-thousandths of a share of
Series A Preferred Stock issuable upon such conversion, issued
in such name or names as such holder may direct. Such
conversion shall be deemed to have been made immediately prior
to the close of business on the date of the surrender of the
certificate or certificates representing one one-thousandths
of a share of this Series (if on such date the transfer books
of the Corporation shall be closed, then immediately prior to
the close of business on the first date thereafter that said
books shall be open), and all rights of such holder arising
from ownership of one one-thousandths of a share of this
Series shall cease at such time, and the person or persons in
whose name or names the certificate or certificates
representing a number of one one-thousandths of a share of
Series A Preferred Stock are to be issued shall be treated for
all purposes as having become the record holder or holders of
such number of one one-thousandths of a share of Series A
Preferred Stock at such time and shall have and may exercise
all the rights and powers appertaining thereto. No adjustments
in respect of past cash dividends shall be made upon the
conversion of any one one-thousandths of a share of this
Series; provided, however, that if any one one-thousandths of
a share of this Series shall be converted subsequent to the
record date for the payment of a cash or stock dividend or
other distribution on one one-thousandths of a share of this
Series but prior to such payment, the registered holder of
such one one-thousandths of a share at the close of business
on such record date shall be entitled to receive the cash or
stock dividend or other distribution payable to holders of
Series A Preferred Stock. The Corporation shall at all times
reserve and keep available, solely for the purpose of issue
upon conversion of outstanding one one-thousandths of a share
of this Series, such number of one one-thousandths of a share
of Series A Preferred Stock as may be issuable upon the
conversion of all such outstanding one one-thousandths of a
share of this Series, provided, the Corporation may deliver
shares of Series A Preferred Stock which are held in the
treasury of the Corporation for shares of this Series to be
converted. If any shares of the Series A Preferred Stock
require registration with or approval of any governmental
authority under any federal or state law before such shares of
the Series A Preferred Stock may be issued upon conversion,
the Corporation will cause such shares to be duly registered
or approved, as the case may be. The Corporation will endeavor
to list shares of the Series A Preferred Stock required to be
delivered upon conversion prior to such delivery upon any
national securities exchange or national market system on
which the outstanding shares of the Series A Preferred Stock
may be listed at the time of such delivery. All shares of the
Series A Preferred Stock which
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may be issued upon conversion of shares of this Series will,
upon issue, be fully paid and nonassessable.
(ix) Immediately upon the automatic conversion of all
outstanding shares of Class B Common Stock into shares of
Common Stock pursuant to the terms of the Restated Certificate
of Incorporation of the Corporation, as amended, each one
one-thousandth of a share of this Series which is then
outstanding shall, without any action by the Board of
Directors of the Corporation or the holder or holders thereof,
automatically convert into and become for all purposes one
share (subject to adjustment) of the Common Stock, and the
provisions of this Certificate of Designation which provide
for different voting or cash dividend rights for this Series
shall not be of any effect; PROVIDED, HOWEVER, if there is not
a sufficient number of shares of Common Stock authorized and
available for issuance to permit such conversion, each one
one-thousandth of a share of this Series which is then
outstanding shall, without any action by the Board of
Directors of the Corporation or the holder or holders thereof,
automatically convert into and become for all purposes one
share (subject to adjustment) of the Common Stock on a pro
rata basis to the extent possible given the number of shares
of Common Stock that is authorized and available for issuance
and each one one-thousandth of a share of this Series which is
then remaining shall automatically convert into one
one-thousandth of a share of Series A Participating Preferred
Stock of the Company. The Board of Directors of the
Corporation is hereby authorized to take such actions,
consistent with the Delaware General Corporation Law, as it
deems appropriate or advisable with respect to the replacement
of certificates then outstanding evidencing ownership of this
Series, or otherwise, in order to carry into effect the
foregoing provisions.
IN WITNESS WHEREOF, the undersigned have signed and attested
this certificate on the_______ day of _________, _____.
_____________________________
Attest:
____________________________
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FOOTNOTES:
* For a certificate of designation relating to shares to be issued
pursuant to Section 2.3 of the Rights Agreement, insert the Separation
Time. For a certificate of designation relating to shares to be issued
pursuant to Section 3.1(d) of the Rights Agreement, insert the Flip-in
Date.
* Insert an amount equal to 10 times the Exercise Price in effect as of
the Separation Time.
* For a certificate of designation relating to shares to be issued
pursuant to Section 2.3 of the Rights Agreement, insert the Separation
Time. For a certificate of designation relating to shares to be issued
pursuant to Section 3.1(d) of the Rights Agreement, insert the Flip-in
Date.
* Insert an amount equal to 10 times the Exercise Price in effect as of
the Separation Time.