COVER PAGE
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
January 30, 1996
between
▇▇▇▇▇▇▇ INTERNATIONAL, INC.
and
CHEMICAL MELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
Article I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions ................................. 2
Article II
THE RIGHTS
Section 2.1 Summary of Rights ................................... 14
Section 2.2 Legend on Common Stock
Certificates ...................................... 14
Section 2.3 Exercise of Rights;
Separation of Rights .............................. 15
Section 2.4 Adjustments to Exercise Price;
Number of Rights .................................. 19
Section 2.5 Date on Which Exercise is
Effective ......................................... 21
Section 2.6 Execution, Authentication, Delivery
and Dating of Rights
Certificates ...................................... 22
Section 2.7 Registration, Registration of
Transfer and Exchange ............................. 23
Section 2.8 Mutilated, Destroyed, Lost and
Stolen Rights Certificates ........................ 25
Section 2.9 Persons Deemed Owners ............................... 26
Section 2.10 Delivery and Cancellation of
Certificates ...................................... 27
Section 2.11 Agreement of Rights Holders ......................... 27
Article III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Flip-in ............................................. 28
Section 3.2 Flip-over ........................................... 33
ii
Page
Article IV
THE RIGHTS AGENT
Section 4.1 General ............................................. 34
Section 4.2 Merger or Consolidation or Change of
Name of Rights Agent .............................. 35
Section 4.3 Duties of Rights Agent .............................. 37
Section 4.4 Change of Rights Agent .............................. 40
Article V
MISCELLANEOUS
Section 5.1 Redemption .......................................... 42
Section 5.2 Expiration .......................................... 43
Section 5.3 Issuance of New Rights
Certificates ...................................... 43
Section 5.4 Supplements and Amendments .......................... 45
Section 5.5 Fractional Shares ................................... 45
Section 5.6 Rights of Action .................................... 46
Section 5.7 Holder of Rights Not Deemed a
Stockholder ....................................... 46
Section 5.8 Notice of Proposed Actions .......................... 46
Section 5.9 Notices ............................................. 48
Section 5.10 Suspension of Exercisability ........................ 49
Section 5.11 Costs of Enforcement ................................ 49
Section 5.12 Successors .......................................... 50
Section 5.13 Benefits of this Agreement .......................... 50
Section 5.14 Determination and Actions by
the Board of Directors, etc. ...................... 50
Section 5.15 Descriptive Headings ................................ 51
Section 5.16 Governing Law ....................................... 51
Section 5.17 Counterparts ........................................ 51
Section 5.18 Severability ........................................ 51
EXHIBIT
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
1
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time
to time, this "Agreement"), dated as of January 30, 1996, between ▇▇▇▇▇▇▇
International, Inc., a Delaware corporation (the "Company"), and Chemical
Mellon Shareholder Services, L.L.C., 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) held of record as of
the close of business on February 9, 1996 (the "Record Time") and (b) as
provided in Section 2.4, authorized the issuance of one Right in respect of
each share of Common Stock issued after the Record Time and prior to the
Separation Time (as hereinafter defined) and, to the extent provided in
Section 5.3, each share of Common Stock issued after the Separation Time;
WHEREAS, subject to the terms and conditions hereof, each Right
entitles the holder thereof, after the Separation Time, to purchase
securities of the Company (or, in certain cases, of certain other
entities); and
WHEREAS, the Company desires to appoint the Rights Agent to act
on behalf of the Company, and the Rights Agent
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is willing so to act, in connection with the issuance, transfer, exchange
and replacement of Rights Certificates (as hereinafter defined), the
exercise of Rights and other matters referred to herein;
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as
follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 15% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include any Person
(i) who shall become the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock (or, in the case of a Person described in clause
(ii) of this paragraph and to whom such clause (ii) applies, a percentage
of the outstanding shares of Common Stock in excess of such Person's
Maximum Share Percentage) solely as a result of an acquisition by the
Company of shares of Common Stock, until such time thereafter as any such
Person shall become the Beneficial Owner (other than by means of a stock
dividend or stock split) of any additional shares of Common Stock, (ii) who
is
3
the Beneficial Owner of 10% or more of the outstanding shares of Common
Stock on the date of this Agreement, until such time hereafter as any such
Person shall become the Beneficial Owner (other than by means of a stock
dividend or stock split) of a percentage of the outstanding shares of
Common Stock in excess of such Person's Maximum Share Percentage; provided,
however, that this clause (ii) shall cease to apply to any Person who is
the Beneficial Owner of 10% or more of the outstanding shares of Common
Stock on the date of this Agreement but who shall subsequently become, for
any reason, including as a result of the issuance by the Company of
additional shares of Common Stock, the Beneficial Owner of less than 10% of
the outstanding shares of Common Stock, (iii) who shall become the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock
(or, in the case of a Person described in clause (ii) of this paragraph and
to whom such clause (ii) applies, a percentage of outstanding shares of
Common Stock in excess of such Person's Maximum Share Percentage) 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
enters into an irrevocable written commitment promptly to divest, and
thereafter promptly divests (without exercising or retaining any power,
including voting, with respect to such shares), sufficient shares of Common
Stock (or securities convertible into,
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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, in the case of a Person described in clause (ii) of
this paragraph and to whom such clause (ii) applies, a percentage of
outstanding shares of Common Stock in excess of such Person's Maximum Share
Percentage), or (iv) who Beneficially Owns shares of Common Stock
consisting solely of one or more of (A) shares of Common Stock Beneficially
Owned pursuant to the grant or exercise of an option granted to such Person
by the Company in connection with an agreement to merge with, or acquire,
the Company entered into prior to a Flip-in Date, (B) shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock), Beneficially Owned by such Person or its Affiliates or Asso-
ciates at the time of grant of such option, or (C) shares of Common Stock
(or securities convertible into, exchangeable into or exercisable for
Common Stock) acquired by Affiliates or Associates of such Person 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 wholly
owned Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly owned Subsidiary of the
Company shall not be an Acquiring Person.
5
"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.
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, arrange-
ment or understanding, or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the "Beneficial
Owner", or to have "Beneficial Ownership" of, or to "Beneficially Own", any
security (i) solely because such security has been tendered pursuant to a
tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered security is accepted for
payment or exchange, (ii) solely because such Person or any of such
Person's Affiliates or Associates has or shares the
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power to vote or direct the voting of such security pursuant to a revocable
proxy given in response to a public proxy or consent solicitation made to
more than ten holders of shares of a class of stock of the Company regis-
tered 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) or (iii) solely by
virtue of any actions taken (or omitted to be taken) by an officer or
director of the Company acting 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 the Beneficial Owner, all
shares as to which such Person is deemed the Beneficial Owner shall be
deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in The City of New York are
generally authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m. New
York City time on such date (or, if such date is not a Business Day, 5:00
p.m. New York City time on the next succeeding Business Day).
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"Common Stock" shall mean the shares of Common Stock, par value
$0.10 per share, of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"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 $60.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the close of business on February 9,
2006, and (iv) upon the merger of the Company into another corporation
pursuant to an agreement entered into prior to a Flip-in Date.
"Flip-in Date" shall mean any Stock Acquisition Date or such
later date as the Board of Directors of the Company may from time to time
fix by resolution adopted prior to the Flip-in Date that would otherwise
have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event described in clause
(i) of the definition thereof, the Person issuing any securities into which
shares of Common
8
Stock are being converted or exchanged and, if no such securities are being
issued, the other party 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
assets or earning power being transferred in such Flip-over Transaction or
Event, provided in all cases if such Person is a subsidiary of a
corporation, the parent corporation shall be the Flip-Over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election
of directors (or other persons similarly responsible for direction of the
business and affairs) of the Flip-Over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions after a Flip-in Date in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate in a
share exchange with any other Person if, at the time of the consolidation,
merger or share exchange or at the time the Company enters into any agree-
ment with respect to any such consolidation, merger or share exchange, the
Acquiring Person Controls (as hereinafter defined) the Board of Directors
of the Company and either (A) any term of or arrangement concerning the
treatment of shares of capital stock in such consolidation, merger or share
exchange relating to the Acquiring Person is
9
not identical to the terms and arrangements relating to other holders of
the Common Stock or (B) the Person with whom the transaction or series of
transactions occurs is the Acquiring Person or an Affiliate or Associate of
the Acquiring Person or (ii) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 50% of the assets (measured by either book
value or fair market value) or (B) generating more than 50% of the
operating income or cash flow, of the Company and its Subsidiaries (taken
as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons 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. An Acquiring Person shall be deemed
to Control the Company's Board of Directors when, following a Flip-in Date,
the persons who were directors of the Company before the Flip-in Date shall
cease to constitute a majority of the Company's Board of Directors.
"Grandfathered Share Percentage", in respect of any Person
described in clause (ii) of the definition of "Acquiring Person," shall
mean the percentage of the
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outstanding shares of Common Stock Beneficially Owned by such Person on the
date of this Agreement.
"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; pro-
vided, however, that if an event of a type analogous to any of the events
described in Section 2.4 hereof shall have caused the closing prices used
to determine the Market Price on any Trading Days during such period of 20
Trading Days not to be fully comparable with the closing price on such
date, each such closing price so used shall be appropriately adjusted in
order to make it fully comparable with the closing price on such date. The
closing price per share of any securities on any date shall be the last
reported sale price, regular way, or, in case no such sale takes place or
is quoted on such date, the average of the closing bid and asked prices,
regular way, for each share of such securities, in either case as reported
in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange,
Inc. or, if the securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., as reported in the principal consolidated trans-
action reporting system with respect to securities listed on the principal
11
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 ad-
mitted to trading on any national securities exchange or quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the securities selected
by the Board of Directors of the Company; provided, however, that if on any
such date the securities are not listed or admitted to trading on a
national securities exchange or traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith by
the Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.
"Maximum Share Percentage" shall mean, in the case of a Person
described in clause (ii) of the definition of Acquiring Person and to whom
such clause (ii) applies, the lesser of (a) the sum of 5% plus such
Person's Grandfathered Share Percentage and (b) 20%. By way of
illustration, (a) the Maximum Share Percentage of a Person Beneficially
Owning
12
12% of the outstanding Common Stock on the date of this Agreement will be
17% and (b) the Maximum Share Percentage of a Person Beneficially Owning
18% of the outstanding Common Stock on the date of this Agreement will be
20%.
"Person" shall mean any individual, firm, partnership,
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.
"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.
"Separation Time" shall mean the close of business on the
earlier of (i) the tenth business day (or such later date as the Board of
Directors of the Company may from time to time fix by resolution adopted
prior to the Separation Time that 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 Flip-in Date; provided, that if the foregoing results in the
Separation Time being prior to the Record Time, the Separation Time shall
be the Record Time and provided further, that if any tender or exchange
offer referred to in clause (i) of this paragraph is cancelled, terminated
or otherwise withdrawn prior to the
13
Separation Time without the purchase of any shares of Common Stock pursuant
thereto, such offer shall be deemed, for purposes of this paragraph, never
to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) or by an Acquiring Person
(including by means of filing a Schedule 13D or Schedule 13G under the
Exchange Act (or any comparable successor report or schedule) or an
amendment thereto) that an Acquiring Person has become such.
"Subsidiary" of any specified Person shall mean any corporation
or other entity of which a majority of the voting power of the equity
securities or a majority of the equity interest is Beneficially Owned,
directly or indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted
to trading on the New York Stock Exchange, Inc., a day on which the princi-
pal 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.
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ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the
Record Time, the Company will mail a letter summarizing the terms of the
Rights to each holder of record of Common Stock as of the Record Time, at
such holder's address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued after the Record Time but prior to the Separation Time
shall evidence one Right for each share of Common Stock represented thereby
and shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a Rights Agreement,
dated as of January 30, 1996 (as such may be amended from time to
time, the "Rights Agreement"), between ▇▇▇▇▇▇▇ International, Inc.
(the "Company") and Chemical Mellon Shareholder Services, L.L.C., as
Rights Agent, the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in
the Rights Agreement, such Rights may be redeemed, may become
exercisable for securities or assets of the Company or of another
entity, may be exchanged at the election of the Company for shares of
Common Stock or other securities or assets of the Company, may
expire, may become void (if they are "Beneficially Owned" by an
"Acquiring Person" or an Affiliate or Associate thereof, as such
terms are defined in the Rights Agreement, or by any transferee of
any of the foregoing) or may be evidenced by separate certificates
and may no longer be evidenced by this certificate. The Company will
mail or arrange for the mailing of a copy of the Rights Agreement to
the
15
holder of this certificate without charge promptly after the receipt
of a written request therefor.
Certificates representing shares of Common Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share of
Common Stock evidenced thereby notwithstanding the absence of the foregoing
legend.
2.3 Exercise of Rights; Separation of 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, after the Separation
Time and prior to the Expiration Time, to purchase, for the Exercise Price,
one share of Common Stock.
(b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (together, in the case of certificates issued prior
to the Record Time, with the letter mailed to the record holder thereof
pursuant to Section 2.1) and will be transferable only together with, and
will be transferred by a transfer (whether with or without such letter) of,
such associated share.
(c) Subject to the terms hereof, after the Separation Time
and prior to the Expiration Time, the Rights (i) may be exercised and (ii)
may be transferred independent of shares of Common Stock. Promptly
following the Separation Time, the Rights Agent will mail to each holder
16
of record of Common Stock as of the Separation Time (other than any Person
whose Rights have become void pursuant to Section 3.1(b)), at such holder's
address as shown by the records of the Company (the Company hereby agreeing
to furnish copies of such records to the Rights Agent for this purpose),
(x) a certificate (a "Rights Certificate") in substantially the form of
Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto
or with any rule or regulation of any national securities exchange or
quotation system on which the Rights may from time to time be listed or
traded, or to conform to usage, and (y) a disclosure statement describing
the Rights.
(d) Subject to the terms hereof, Rights may be exercised on
any Business Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent the Rights Certificate evidencing such
Rights with an Election to Exercise (an "Election to Exercise") substan-
tially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check or
money order payable to the order
17
of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any transfer
tax or charge which may be payable in respect of any transfer involved in
the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares or depositary receipts (or both) in a name other
than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject
to the terms 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 (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 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 and/or cash, deliver the same to or upon the order of the
registered holder of such Rights Certificate, registered (in the case
18
of certificates or depositary receipts) in such name or names as may be
designated by such holder.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by
the Rights 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
upon exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Exercise Price), be duly and
validly authorized, executed, issued and delivered and fully paid and
nonassessable; (ii) take all such action as may be necessary 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 transfer taxes and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or of any shares
issued upon the exercise of Rights, provided that the Company shall not be
required to pay any transfer tax or charge which may be payable in respect
of any transfer
19
involved in the transfer or delivery of Rights Certificates or the issuance
or delivery of certificates for shares in a name other than that of the
holder of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In
the event the Company shall at any time after the Record Time and prior to
the Separation Time (i) declare or pay a dividend on Common Stock payable
in Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares
of Common Stock, (x) the Exercise Price in effect after such adjustment
will be equal to the Exercise Price in effect immediately prior to such
adjustment divided by the number of shares of Common Stock (the "Expansion
Factor") that a holder of one share of Common Stock immediately prior to
such dividend, subdivision or combination would hold thereafter as a result
thereof and (y) each Right held prior to such adjustment will become that
number of Rights equal to the Expansion Factor, and the adjusted number of
Rights will be deemed to be distributed among the shares of Common Stock
with respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend, subdivision
or combination, so that each such share of Common Stock will have exactly
one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the
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payment or effective date for the applicable dividend, subdivision or
combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common Stock
otherwise than in a transaction referred to in the preceding paragraph,
each such share of Common Stock so issued shall automatically have one new
Right associated with it, which Right shall be evidenced by the certificate
representing such share. To the extent provided in Section 5.3, Rights
shall be issued by the Company in respect of shares of Common Stock that
are issued or sold by the Company after the Separation Time.
(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
Stock (other than pursuant to a regular periodic cash dividend or a
dividend paid solely in Common Stock) whether by dividend, in a reclassifi-
cation or recapitalization (including any such transaction involving a
merger, consolidation or 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
21
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 adjust-
ment and a brief statement of the facts accounting for such adjustment and
(ii) promptly file with the Rights Agent and with each transfer agent for
the Common Stock a copy of such certificate.
(d) Rights certificates shall represent 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 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
22
holder hereunder) was made; provided, however, that if the date of such
surrender and payment is a date upon which the stock transfer books of the
Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the stock transfer books of the Company
are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of
these officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature and
delivery of such Rights Certificates.
Promptly after the Company learns of the Separation Time, the
Company will notify the Rights Agent of such Separation Time and will
deliver Rights Certificates executed by the Company to the Rights Agent for
countersignature, and, subject to Section 3.1(b), the Rights Agent
23
shall manually countersign and deliver such Rights Certificates to the
holders of the Rights pursuant to Section 2.3(c) hereof. No Rights Certif-
icate 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 trans-
24
ferees, 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 in form satisfactory to the Company or the Rights
Agent, as the case may be, duly executed by the holder thereof or such
holder's attorney duly authorized in writing. As a condition to the
issuance of any new Rights Certificate under this Section 2.7, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
(d) The Company shall not be required to register the
transfer or exchange of any Rights after such Rights have become void under
Section 3.1(b), been exchanged under Section 3.1(c) or been redeemed under
Section 5.1.
25
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 governmental charge that may be
imposed in relation
26
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 Sec-
tion 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
Stock certificate) for registration of transfer, the Company, the Rights
Agent and any agent of the Company or the Rights Agent may deem and treat
the person in whose name such Rights Certificate (or, prior to the
Separation Time, such Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for all purposes
whatsoever, including the payment of the Redemption Price, and neither the
Company nor the Rights Agent shall be affected by any notice to the con-
trary. As used in this Agreement, unless the context otherwise requires,
the term "holder" of any Rights shall mean the registered holder of such
Rights (or, prior to the Separation Time, the associated shares of Common
Stock).
27
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 can-
celled by the Rights Agent. The Company may at any time deliver to the
Rights Agent for cancellation any Rights Certificates previously counter-
signed 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 return all cancelled Rights
Certificates to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of,
the associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates will
be transferable only on the Rights Register as provided herein;
28
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of
the Company or the Rights Agent may deem and treat the person in whose name
the Rights Certificate (or, prior to the Separation Time, the associated
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary;
(d) Rights beneficially owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration
Time a Flip-in Date shall occur, 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 Sec-
tion 5.10), that number of shares of Common Stock having an aggregate
Market Price on the Stock Acquisition Date
29
equal to twice the Exercise Price for an amount in cash equal to the
Exercise Price (such right to be appropriately adjusted in order to protect
the interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of
the events described in Section 2.4(a) or (b) shall have occurred with
respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring
Person or an Affiliate or Associate thereof or by any transferee, direct or
indirect, of any of the foregoing shall become void and any holder of such
Rights (including transferees) shall thereafter have no right to exercise
or transfer such Rights under any provision of this Agreement. If any
Rights Certificate is presented for assignment or exercise and the Person
presenting the same will not complete the certification set forth at the
end of the form of assignment or notice of election to exercise and provide
such additional evidence of the identity of the Beneficial Owner and its
Affiliates and Associates (or former Beneficial Owners and their Affiliates
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
30
foregoing and accordingly will deem the Rights evidenced thereby to be void
and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option,
at any time after a Flip-in Date and prior to the time that an Acquiring
Person becomes the Beneficial Owner of more than 50% of the outstanding
shares of Common Stock, elect to exchange all (but not less than all) the
then outstanding Rights (which shall not include Rights that have become
void pursuant to the provisions of Section 3.1(b)) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of holders of
Rights generally in the event that after the Separation Time an event of a
type analogous to any of the events described in Section 2.4(a) or (b)
shall have occurred with respect to the Common Stock (such exchange ratio,
as adjusted from time to time, being hereinafter referred to as the
"Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and
without any notice, the right to exercise the Rights will terminate and
each Right (other than Rights that have become void pursuant to Sec-
tion 3.1(b)) will thereafter represent only the right to receive a number
of shares of Common Stock equal to the Exchange Ratio. Promptly after the
action of the Board of
31
Directors electing to exchange the Rights, the Company shall give notice
thereof (specifying the steps to be taken to receive shares of Common Stock
in exchange for Rights) to the Rights Agent and the holders of the Rights
(other than Rights that have become void pursuant to Section 3.1(b))
outstanding immediately prior thereto by mailing such notice in accordance
with Section 5.9.
Each Person in whose name any certificate for shares is issued
upon the exchange of Rights pursuant to this Section 3.1(c) shall for all
purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered
and payment of any applicable taxes and other governmental charges payable
by the holder was made; provided, however, that if the date of such sur-
render and payment is a date upon which the stock transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the stock transfer books of the Company
are open.
(d) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock of the Company to
permit the exercise or exchange in full of the Rights in accordance with
Section 3.1(a) or (c), the Company shall either (i) call a
32
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 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 con-
33
sultation 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) each
Right shall thereafter constitute the right to purchase from the Flip-over
Entity, upon exercise thereof in accordance with the terms hereof, that
number of shares of Flip-over Stock of the Flip-over Entity having an
aggregate Market Price on the date of consummation or occurrence of such
Flip-over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights
generally in the event that after such date of consummation or occurrence
an event of a type analogous to any of the events described in Sec-
tion 2.4(a) or (b) shall have occurred with respect to the Flip-over Stock)
and (ii) the Flip-over Entity shall thereafter be liable for, and shall
assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company
pursuant to this Agreement. The provisions of
34
this Section 3.2 shall apply to successive Flip-over Transactions or
Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the
Company shall not enter into any agreement with respect to, consummate or
permit to occur any Flip-over Transaction or Event if at the time thereof
there are any rights, warrants or securities outstanding or any other
arrangements, agreements or instruments that would eliminate or otherwise
diminish in any material respect the benefits intended to be afforded by
this Rights Agreement to the holders of Rights upon consummation of such
transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
35
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon
any certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation
succeeding to the shareholder services business of the Rights Agent or any
successor Rights Agent, will be the
36
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 4.4 hereof. In
case at the time such successor Rights Agent succeeds to the agency created
by this Agreement any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the 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
37
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel will be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a person believed by the
Rights Agent to be the Chief Executive Officer, the President or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary
or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate will be full authorization to the Rights Agent
for any action taken
38
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the certificates 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 not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any certificate
for securities purchasable upon exercise of Rights or Rights Certificate
(except its countersignature thereof); nor will it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible for any
change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 3.1(b) hereof) or any adjustment required under
the provisions of Section 2.4,
39
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 instructions with respect to the performance of its duties hereunder
from any person believed by the Rights Agent to be the Chief Executive
Officer, the President or any Vice President or the Secretary or any
Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such persons for
40
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in Common Stock,
Rights or other securities of the Company or become pecuniarily interested
in any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent will
not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment
thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and
be discharged from its duties under this Agreement upon 90 days' notice (or
such lesser notice as is
41
acceptable to the Company) in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Rights in accordance with Sec-
tion 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 corporation organized and doing business under the laws of the United
States or of any State of the United States, in good standing, having its
principal office in the State of New York or any other State of the United
States, which is authorized under such laws to exercise the powers of the
Rights Agent contemplated by this Agreement and is subject
42
to supervision or examination by federal or state authority and which has
at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. After appointment, the successor Rights
Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of
any such appointment, the Company will file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Stock,
and mail a notice thereof in writing to the holders of the Rights. Failure
to give any notice provided for in this Section 4.4, however, or any defect
therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
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)
43
the then outstanding Rights at the Redemption Price either in cash or
shares of Common Stock or other securities of the Company deemed by the
Board of Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (or, if the resolution of the
Board of Directors electing to redeem the Rights states that the redemption
will not be effective until the occurrence of a specified future time or
event, upon the occurrence of such future time or event), without any
further action and without any notice, the right to exercise the Rights
will terminate and each Right will thereafter represent only the right to
receive the Redemption Price in cash or securities, as determined by the
Board of Directors. Promptly after the Rights are redeemed, the Company
shall give notice of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice in accordance with Sec-
tion 5.9.
5.2 Expiration. The Rights and this Agreement shall expire
at the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1 or 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of
44
the Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be approved by
its Board of Directors to reflect any adjustment or change in the number or
kind or class of shares of stock purchasable upon exercise of Rights made
in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the
Company following the Separation Time and prior to the Expiration Time
pursuant to the terms of securities convertible or redeemable into shares
of Common Stock or to options, in each case issued or granted prior to, and
outstanding at, the Separation Time, the Company shall issue to the holders
of such shares of Common Stock, Rights Certificates representing the
appropriate number of Rights in connection with the issuance or sale of
such shares of Common Stock; provided, however, in each case, (i) no such
Rights Certificate shall be issued, if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or to the Person
to whom such Rights Certificates would be issued, (ii) no such Rights
Certificates shall be issued if, and to the extent that, appropriate
adjustment shall have otherwise been made in lieu of the issuance thereof,
and (iii) the Company shall have no obligation to distribute Rights Certi-
ficates to any Acquiring Person or Affiliate or Associate of
45
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) 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 duly execute and deliver any
supplement or amendment hereto requested by the Company which satisfies the
terms of the preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Company shall, in lieu thereof, in the sole discretion of the
Board of Directors, either (a) evidence such fractional shares by
depositary receipts issued pursuant to an appropriate agreement between the
Company and a depositary selected by it, providing that each holder of a
depositary receipt shall have all of the rights, privileges and preferences
to which such holder would be entitled as a beneficial owner of such
fractional share, or (b) sell such shares on behalf of the holders of
46
Right and pay to the registered holder of such Rights the appropriate
fraction of price per share received upon such sale.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Section 3.1(b)), 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
47
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 after the Separation Time and prior to the Expiration Time (i) to
effect or permit the occurrence of any 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, 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.
48
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:
Brinker International, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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:
Chemical Mellon Shareholder Services, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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
49
holder as it appears upon the registry books of the Rights Agent or, prior
to the Separation Time, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
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 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. Notice thereof pursuant to Sec-
tion 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)
50
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,
calculations, interpretations and determinations (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board in good
51
faith, 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.
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.
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.
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 con-
stitute 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
52
of such term or provision to circumstances other than those as to which it
is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
▇▇▇▇▇▇▇ INTERNATIONAL, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
CHEMICAL MELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice
President
1
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR
AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE
VOID.
Rights Certificate
▇▇▇▇▇▇▇ INTERNATIONAL, INC.
This certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above,
each of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Stockholder Protection Rights Agreement,
dated as of January 30, 1996 (as amended from time to time, the "Rights
Agreement"), between ▇▇▇▇▇▇▇ International, Inc., a Delaware corporation
(the "Company"), and Chemical Mellon Shareholder Services, L.L.C., as
Rights Agent (the "Rights Agent", which term shall include any successor
Rights Agent under the Rights Agreement), to purchase from the Company at
any time after the Separation Time (as such term is defined in the Rights
Agreement) and prior to the close of business on February 9, 2006, one
share of Common Stock, par value $0.10 per share (the "Common Stock"), of
the Company (subject to adjustment as provided in the Rights Agreement) at
the Exercise Price referred to below, upon
2
presentation and surrender of this Rights Certificate with the Form of
Election to Exercise duly executed at the principal office of the Rights
Agent in The City of New York. The Exercise Price shall initially be
$60 per Right and shall be subject to adjustment in certain events as
provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the
Rights evidenced hereby may entitle the registered holder thereof to
purchase that number of shares of Common Stock having an aggregate Market
Price (as defined in the Rights Agreement) on the Stock Acquisition Date
(as defined in the Rights Agreement) equal to twice the Exercise Price (as
such right may be adjusted in certain events as provided in the Rights
Agreement), securities of an entity other than the Company or securities or
assets of the Company other than Common Stock, all as provided in the
Rights Agreement.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates. Copies of the Rights Agreement are on file at the
principal
3
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 Certificate may be (a) redeemed by the Company under
certain circumstances, at its option, at a redemption price of $0.01 per
Right or (b) exchanged by the Company under certain circumstances, at its
option, for one share of Common Stock per Right (or, in certain cases,
other securities or assets of the Company), subject in each case to
adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the
holder of any securities which may at any time be issuable on the exercise
hereof, nor shall any-
4
thing 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 exer-
cised or exchanged as provided in the Rights Agreement.
5
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: ▇▇▇▇▇▇▇ INTERNATIONAL,
INC.
___________________________ By______________________
Secretary
Countersigned:
___________________
By____________________________
Authorized Signature
1
[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 SEC Rule 17Ad-15.
2
---------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights
and shares of Common Stock, that the Rights evidenced by this Rights
Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate 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.
1
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: ▇▇▇▇▇▇▇ International, Inc.
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Common 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)
2
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
---------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the Rights evidenced by
the attached Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person or
an Affiliate 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.