EXHIBIT 1
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SHARE RIGHTS AGREEMENT
INTERNATIONAL MULTIFOODS CORPORATION
AND
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 15, 2000
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TABLE OF CONTENTS
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Section 1. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................5
Section 3. Issue of Right Certificates.....................................................................5
Section 4. Form of Right Certificates......................................................................7
Section 5. Countersignature and Registration...............................................................7
Section 6. Transfer, Split-Up, Combination and Exchange of Right Certificates; Lost, Stolen,
Destroyed or Mutilated Right Certificates................................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................9
Section 8. Cancellation and Destruction of Right Certificates.............................................10
Section 9. Reservation and Availability of Preferred Shares...............................................10
Section 10. Preferred Shares Record Date...................................................................11
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights....................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....................................20
Section 13. Consolidation, Merger, Sale or Transfer of Assets or Earning Power.............................21
Section 14. Fractional Rights and Fractional Shares........................................................23
Section 15. Rights of Action...............................................................................24
Section 16. Agreement of Right Holders.....................................................................25
Section 17. Right Certificate Holder Not Deemed a Stockholder..............................................25
Section 18. Concerning the Rights Agent....................................................................26
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................26
Section 20. Duties of Rights Agent.........................................................................27
Section 21. Change of Rights Agent.........................................................................29
Section 22. Issuance of New Right Certificates.............................................................30
Section 23. Redemption.....................................................................................30
Section 24. Exchange.......................................................................................31
Section 25. Notice of Certain Events.......................................................................32
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Section 26. Notices........................................................................................33
Section 27. Supplements and Amendments.....................................................................33
Section 28. Successors.....................................................................................34
Section 29. Benefits of this Agreement.....................................................................34
Section 30. Severability...................................................................................35
Section 31. Governing Law..................................................................................35
Section 32. Counterparts...................................................................................35
Section 33. Descriptive Headings...........................................................................35
Exhibit A -- Certificate of Designations of Series A Junior Participating
Preferred Capital Stock
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights to Purchase Preferred Shares
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EXHIBIT 1
RIGHTS AGREEMENT
This Agreement, dated as of September 15, 2000, between
International Multifoods Corporation, a Delaware corporation (the "Company"),
and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., a national banking association (the
"Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (individually a
"Right" and collectively the "Rights") for each Common Share (as defined in this
Agreement) of the Company outstanding at the Close of Business (as defined in
this Agreement) on October 4, 2000 (the "Record Date"), each Right initially
representing the right to purchase one one-hundredth of a Preferred Share (as
defined in this Agreement), upon the terms and subject to the conditions set
forth in this Agreement, and has further authorized the issuance of one Right
(as such number may hereafter be adjusted pursuant to Section 11) with respect
to each Common Share that shall become outstanding (i) at any time between the
Record Date and the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date (as such terms are defined in this Agreement) or (ii)
upon the exercise or conversion, before the earlier of the Redemption Date or
the Final Expiration Date, of any option or other security exercisable for or
convertible into Common Shares, which option or other such security is
outstanding on the Distribution Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is defined in this Agreement) who or which, together with all Affiliates
and Associates (as such terms are defined in this Agreement) of such Person,
shall be the Beneficial Owner (as such term is defined in this Agreement) of 15%
or more of the Common Shares of the Company then outstanding, but shall not
include (i) the Company, (ii) any wholly-owned Subsidiary (as such term is
defined in this Agreement) of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, or (iv) any entity holding
Common Shares for or pursuant to the terms of any such plan described in clause
(iii) of this sentence. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company that, by reducing the number of Common Shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Common Shares of the Company then outstanding; PROVIDED, HOWEVER, that if
a Person, together with all Affiliates or Associates of such Person, shall
become the Beneficial Owner of 15% or more of the Common Shares of the Company
then outstanding by reason of share acquisitions by the Company and if such
Person or such Person's Affiliates or Associates shall, after such share
acquisitions by the Company, become
the Beneficial Owner of any additional Common Shares of the Company (other than
pursuant to a stock dividend, stock split, recapitalization or similar
transaction that does not affect the percentage of outstanding Common Shares
beneficially owned by such Person and its Affiliates and Associates), and,
immediately after becoming the Beneficial Owner of such additional Common
Shares, such Person, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the Common Shares of the Company
then outstanding, then such Person (unless such Person shall be (1) the Company,
(2) any wholly-owned Subsidiary of the Company, (3) any employee benefit plan of
the Company or of any Subsidiary of the Company, or (4) any entity holding
Common Shares for or pursuant to the terms of any such plan described in clause
(3) of this sentence) shall be deemed an "Acquiring Person." An entity other
than the Company or any wholly-owned Subsidiary of the Company holding Common
Shares for or pursuant to the terms of an employee benefit plan of the Company
or of any Subsidiary of the Company and in addition being the Beneficial Owner
of Common Shares that are not held for or pursuant to the terms of any such plan
shall be deemed to constitute an Acquiring Person, notwithstanding anything
herein stated, if, but only if, it, together with its Affiliates and Associates,
shall be the Beneficial Owner of 15% or more, exclusive of those Common Shares
held by it for or pursuant to the terms of any such plan, of the Common Shares
then outstanding. Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be deemed
an "Acquiring Person" pursuant to the foregoing provisions of this paragraph
(a), has become such inadvertently (including, without limitation, because (A)
such Person was unaware that it beneficially owned a percentage of the Common
Shares that would otherwise cause such Person to be an "Acquiring Person" or (B)
such Person was aware of the extent of its Beneficial Ownership but had no
actual knowledge of the consequences of such Beneficial Ownership under this
Agreement), and without any intention of changing or influencing control of the
Company, and such Person divests as promptly as practicable a sufficient number
of Common Shares so that such Person would no longer be deemed an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own" or have "beneficial ownership" of, any
securities:
(i) that such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly, including
without limitation securities with respect to which such Person or any of such
Person's Affiliates or Associates has "beneficial ownership" pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act;
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(ii) that such Person or any of such Person's
Affiliates or Associates has, directly or indirectly, (A) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding, whether or not in
writing (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, other
rights (other than the Rights), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, or to have beneficial ownership of, any securities pursuant to
subparagraph (i), (ii) or (iii) of this paragraph (c) solely because such
securities are tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) the right
to vote or dispose of (including without limitation pursuant to any agreement,
arrangement or understanding (whether or not in writing)); PROVIDED, HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, or to have beneficial ownership of, any securities pursuant to subparagraph
(i), (ii) or (iii) of this paragraph (c) solely because of the right to vote
such securities pursuant to an agreement, arrangement or understanding if the
agreement, arrangement or understanding to vote such securities (1) arises
solely from a revocable proxy or consent given to such Person or any of such
Person's Affiliates or Associates in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (2) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or successor
report) as being beneficially owned by such Person; or
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding, whether or not in writing (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described in
the final proviso to subparagraph (ii) of this paragraph (c)) or disposing of
any voting securities of the Company.
Notwithstanding anything in these definitions of Beneficial Owner, beneficially
own or beneficial ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's beneficial ownership of securities of the
Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding that such Person would be deemed to beneficially own under this
Agreement.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New York
or Minnesota are authorized or obligated by law or executive order to close.
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(e) "Close of Business" on any given date shall mean 5:00
p.m., New York City time, on such date; PROVIDED, HOWEVER, that if such date is
not a Business Day, it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
(f) "Common Shares", when used with reference to the
Company, shall mean shares of Common Stock of the par value of $.10 per share
(as such par value may be changed from time to time) of the Company. "Common
Shares," when used with reference to any Person other than the Company, shall
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons that ultimately control such first mentioned Person.
(g) "Distribution Date" shall have the meaning set forth
in Section 3.
(h) "Final Expiration Date" shall have the meaning set
forth in Section 7.
(i) "Person" shall mean any individual, firm,
corporation, partnership, limited liability company, trust or other entity, and
shall include any successor (by merger or otherwise) of any such entity.
(j) "Preferred Shares" shall mean Series A Junior
Participating Preferred Capital Stock, $1.00 par value per share (as such par
value may be changed from time to time) of the Company having the rights and
preferences set forth in the form of Certificate of Designations attached to
this Agreement as EXHIBIT A hereto.
(k) "Redemption Date" shall have the meaning set forth in
Section 7.
(l) "Section 11(a)(ii) Event" shall mean an event
described in the first sentence of Section 11(a)(ii).
(m) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a).
(n) "Shares Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such.
(o) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the voting equity
securities or other equity interests entitled to vote in the election of
directors (or Persons with comparable responsibilities if the entity has no
directors) is beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
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Section 2. APPOINTMENT OF RIGHTS AGENT. The Company
hereby appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3, shall before the Distribution
Date also be the holders of the Common Shares) in accordance with the terms and
conditions of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the
15th day after the Shares Acquisition Date or (ii) the Close of Business on the
15th day (or such later date as may be determined by action of the Board of
Directors of the Company before such time as any Person becomes an Acquiring
Person) after the date of the first public announcement (as defined in Rule
14d-2 promulgated under the Exchange Act) by any Person (other than the Company,
any wholly-owned Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan) relating to a tender or exchange
offer the consummation of which would result in beneficial ownership by a Person
(other than the Company, any wholly-owned Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan) of
15% or more of the then outstanding Common Shares (including any such date that
is after the date of this Agreement and before the issuance of the Rights, the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates when
the context so requires) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection with
the transfer of Common Shares. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more Right
Certificates, in substantially the form of EXHIBIT B hereto (the "Right
Certificates"), evidencing one Right for each Common Share so held, subject to
adjustment pursuant to Section 11(i). If an adjustment in the number of Rights
per Common Share has been made pursuant to Section 11(i), at the time Right
Certificates are distributed, the Company may, to the extent provided in Section
14(a), make the necessary and appropriate rounding adjustments (as set forth in
Section 14(a)) so that Right Certificates are distributed representing only
whole numbers of Rights and pay cash in lieu of fractional Rights pursuant to
Section 14(a). As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase
Preferred Shares, in substantially the form
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of EXHIBIT C hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company.
With respect to certificates for Common Shares outstanding as of the Record
Date, until the Distribution Date (or the earlier Redemption Date or Final
Expiration Date), the Rights will be evidenced by such certificates registered
in the names of the holders thereof, and the registered holders of the Common
Shares shall also be the registered holders of the associated Rights. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
(including without limitation the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date), with or without a copy of the
Summary of Rights attached thereto, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. Notwithstanding
any legend contained on any such surrendered stock certificate, from and after
the Close of Business on the Record Date, the surrender for transfer of any such
certificate for Common Shares shall not constitute the transfer of the rights
granted pursuant to the Rights Agreement between the Company and First Chicago
Trust Company of New York dated October 4, 1990, as amended as of March 1, 1993,
to change the rights agent thereunder to the Rights Agent (the "Expiring
Rights"), which Expiring Rights shall expire at the Close of Business on October
4, 2000.
(c) Certificates for Common Shares that become
outstanding after the Record Date and (i) before the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date or (ii) upon
the exercise or conversion, before the earlier of the Redemption Date or the
Final Expiration Date, of any option or other security exercisable for or
convertible into Common Shares, which option or other security is outstanding on
the Distribution Date, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and
entitles the holder hereof to certain Rights
as set forth in a Rights Agreement between
International Multifoods Corporation and
▇▇▇▇▇ Fargo Bank Minnesota, N.A., dated as
of September 15, 2000 (the "Rights
Agreement"), the terms of which (including
restrictions on the transfer of such Rights)
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 will be
evidenced by separate certificates and will
no longer be evidenced by this certificate.
The Company will mail to the holder of this
certificate a copy of the Rights Agreement
without charge after receipt of a written
request therefor from such holder. Under
certain circumstances, as set forth in the
Rights Agreement, Rights that are or were
acquired or beneficially owned by an
Acquiring
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Person or any Associate or Affiliate thereof
(as such terms are defined in the Rights
Agreement) may become null and void.
With respect to certificates containing the foregoing legend, until the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date, the
Rights associated with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, the registered holders of the Common
Shares shall also be the registered holders of the associated Rights and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. If
the Company purchases or acquires any Common Shares after the Record Date but
before the Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares that are no longer
outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right
Certificates (and the forms of election to purchase Preferred Shares and of
assignment to be printed on the reverse thereof) shall be in substantially the
form of Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law, rule or
regulation (including, without limitation, any rule or regulation of any stock
exchange or automated quotation system on which the Rights may from time to time
be listed) or to conform to usage or to reflect adjustments to the Rights made
pursuant to this Agreement. Subject to Section 11 and Section 22, the initial
Right Certificates, whenever distributed, shall entitle the holders thereof to
purchase such number of one-hundredths of a Preferred Share as shall be set
forth therein at the price per one-hundredth of a Preferred Share set forth
therein (the price per one-hundredth of a Preferred Share being herein called
the "Purchase Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price shall be subject to adjustment
as provided in this Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of
the Company by any one of its Chairman of the Board, its Chief Executive
Officer, its President, its Chief Financial Officer or any of its Vice
Presidents, either manually or by facsimile signature, and shall be attested by
the Secretary or Assistant Secretary, either manually or by facsimile signature.
The Right Certificates shall be countersigned, either manually or by facsimile
signature, by the Rights Agent and shall not be valid for any purpose unless so
countersigned. If any officer of the Company who shall have signed or whose
facsimile signature shall appear on any of the Right Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed or whose
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facsimile signature shall appear on such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the signing of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or the office or offices
designated as the appropriate place for surrender of Right Certificates upon
exercise or transfer, books for registration and transfer of the Right
Certificates. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date and certificate number of each of
the Right Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATES; LOST, STOLEN, DESTROYED OR MUTILATED RIGHT CERTIFICATES.
(a) Subject to Section 14, at any time after the Close of
Business on the Distribution Date, and at or before the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) or that have been
exchanged pursuant to Section 24) may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one-hundredths of a Preferred
Share as the Right Certificate or Right Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office or
offices of the Rights Agent designated for such purpose. Thereupon the Rights
Agent shall, subject to Section 14, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment by the registered holder of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split-up, combination or exchange of Right
Certificates. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Right Certificate until the registered holder shall have duly completed and
executed the form of assignment on the reverse side of such Right Certificate
and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of such Right Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably
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satisfactory to them, and, at the Company's request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 11(a)(ii), the registered holder
of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided in this Agreement) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly completed and executed, to
the Rights Agent at the office or offices of the Rights Agent designated for
such purpose, together with payment of the Purchase Price for each one-hundredth
of a Preferred Share as to which the Rights are exercised, before the earliest
of (i) the Close of Business on October 4, 2010 (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23 (the
"Redemption Date"), or (iii) the time at which such Rights are exchanged as
provided in Section 24.
(b) The Purchase Price for each one-hundredth of a
Preferred Share purchasable pursuant to the exercise of a Right shall initially
be $70, shall be subject to adjustment from time to time as provided in Sections
11 and 13 and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly completed and
executed, accompanied by payment of the Purchase Price for the shares to be
purchased and an amount equal to any applicable transfer tax required to be paid
by the holder of such Right Certificate in accordance with Section 9 in cash, or
by certified check or bank cashier's check or money order payable to the order
of the Company, the Rights Agent shall, subject to Section 20(k), thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Shares (or
make available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of Preferred Shares issuable upon exercise of the Rights under this Agreement
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one-hundredths of a Preferred Share as are
to be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional interests in shares in accordance
with Section 14, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in
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such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, deliver such cash for fractional interests to or
upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the registered
holder of such Right Certificate or to such holder's duly authorized assigns,
subject to Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section unless such registered
holder shall have (i) duly completed and executed the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of such Right Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of exercise,
transfer, split-up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly
permitted by this Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED
SHARES.
(a) The Company will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares or any Preferred
Shares held in treasury, the number of Preferred Shares that will be sufficient
to permit the exercise in full of all outstanding Rights.
(b) The Company will prepare and file, as soon as
practicable following the Shares Acquisition Date, a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
Rights and the Company's securities purchasable upon exercise of the Rights on
an appropriate form, and use its best efforts to cause such registration
statement to (i) become effective as soon as practicable after such filing, and
(ii) remain effective (with a prospectus at all times meeting the requirements
of the Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities or (B) the Final Expiration Date. The
Company will also take such action as may be appropriate under, or to
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ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed 90 days after the date the
registration statement is filed, the exercisability of the Rights in order to
permit the registration statement to become effective. Upon any such suspension,
the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. In addition, if the Company
shall determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability of the
Rights until such time as a registration statement has become effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained or the exercise thereof is not
permitted under applicable law.
(c) The Company will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price and any applicable transfer taxes), be
duly and validly authorized and issued and fully paid and nonassessable shares.
(d) The Company will pay when due and payable any and all
federal and state transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates or of any Preferred Shares
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax that may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares in a name other
than that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any certificates or depositary
receipts for Preferred Shares upon the exercise of any Rights, until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each person in
whose name any certificate for Preferred Shares is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the Preferred Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Preferred Shares 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 Business Day on which
the Preferred Shares transfer books of the Company are open. Before to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate as
such shall not be entitled to any rights of a holder of Preferred Shares for
which the Rights
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shall be exercisable, including without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND
KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) If the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing, surviving or acquiring
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date pursuant to the
exercise of the Rights, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon payment
of the Purchase Price then in effect (and any applicable transfer taxes), the
aggregate number and kind of shares of capital stock that, if such Right had
been exercised immediately before such date and at a time when the Preferred
Shares transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. If an event occurs that would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made before, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, if
any Person shall become an Acquiring Person (other than pursuant to any Section
13 Event occurring after the Distribution Date or within 15 days prior thereto),
proper provision shall be made so that each holder of a Right, subject to
Section 11(a)(iii), shall thereafter have a right to receive, upon exercise
thereof by payment of the amount equal to the product of the number of
one-hundredths of a Preferred Share that would otherwise be issuable upon
exercise of a Right and the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of Preferred Shares, such number of Common
Shares of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one-hundredths of a Preferred Share
for which a Right is exercisable immediately before the occurrence of the
Section 11(a)(ii) Event and (y) dividing that product by 50% of the then current
per share
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market price of the Company's Common Shares (determined pursuant to Section
11(d)) on the date of such occurrence.
From and after the first occurrence of a Section
11(a)(ii) Event or a Section 13 Event, any Rights that are beneficially owned by
any Acquiring Person (or any Associate or Affiliate thereof) or were
beneficially owned by any Acquiring Person (or any Associate or Affiliate
thereof) after the Acquiring Person became an Acquiring Person shall become null
and void without any further action and no holder of such Rights shall
thereafter have any rights to exercise such Rights or any other rights
whatsoever with respect to such Rights, whether under this Agreement or
otherwise. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights that would be void pursuant to the preceding sentence; no
Right Certificate shall be issued at any time upon the transfer of any Rights to
an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate of such an Acquiring Person or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person or
any Associate or Affiliate of such Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be canceled. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but shall have no liability to any holder of a Right Certificate
or other Person as a result of its failure in good faith to make any
determinations with respect to an Acquiring Person or its Affiliates or
Associates.
(iii) If, on the date of the occurrence of a
Section 11(a)(ii) Event (the "Adjustment Date"), the Company does not have
sufficient issued but not outstanding or reserved, or authorized, unissued and
unreserved, Common Shares available to permit the exercise in full of all Rights
that are exercisable on the Adjustment Date for the number of Common Shares per
Right provided for in Section 11(a)(ii), then the Exercise Price (as defined
below) and the number of Common Shares to be delivered by the Company upon
exercise of a Right shall be further adjusted as provided in this subparagraph
(iii).
(1) Definitions:
(A) The "Aggregate Market Value" is the product
of (i) the number of Available Shares times (ii) the current per share market
price of the Common Shares on the Adjustment Date, determined as provided in
Section 11(d).
(B) The "Available Shares" are all unreserved
Common Shares which are authorized and unissued or issued but not outstanding
immediately before the Adjustment Date.
(C) The "Exercise Price" is the amount of the
payment that must be made by the holder of a Right in connection with the
exercise of one Right immediately before the Adjustment Date.
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(D) The "Deficiency" is the amount by which (i)
two times the Exercise Price exceeds (ii) the quotient obtained by dividing the
Aggregate Market Value by the number of Rights remaining outstanding immediately
before the Adjustment Date (the "Remaining Rights") (which number shall not
include the Rights that are beneficially owned by any Acquiring Person (or any
Associate or Affiliate thereof) or were beneficially owned by any Acquiring
Person (or any Associate or Affiliate thereof) after the Acquiring Person became
an Acquiring Person that shall have become void pursuant to Section 11(a)(ii)).
(2) If the Deficiency is less than or equal to the
Exercise Price, then
(A) the number of Common Shares to be delivered
by the Company upon exercise of a Right shall be adjusted to equal the number of
Available Shares divided by the number of Remaining Rights; and
(B) the amount of cash required to be delivered
by the holder of a Right upon the exercise thereof shall be adjusted (the "New
Exercise Price") to equal the Exercise Price minus the Deficiency; PROVIDED,
HOWEVER, that in no event will the New Exercise Price be less than the aggregate
par value of the Common Shares required to be delivered upon the exercise of one
Right pursuant to subparagraph (2)(A) above.
(3) If the Deficiency is greater than the Exercise Price,
then
(A) the number of Common Shares to be delivered
by the Company upon exercise of a Right shall be adjusted to equal the quotient
obtained by dividing the Exercise Price by the per share market price of the
Common Shares on the Adjustment Date;
(B) the New Exercise Price shall equal the
aggregate par value of the Common Shares required to be delivered upon the
exercise of one Right pursuant to subparagraph (3)(A) above; and
(C) in lieu of issuing Common Shares (in whole
or in part upon the exercise of Rights) the Company may issue, upon the exercise
of Rights at the New Exercise Price, other equity securities of the Company
(including, without limitation, shares, or units or fractions of shares, of
preferred stock, which may include Preferred Shares) that the Board of Directors
of the Company has determined to have substantially the same value, voting
rights and other rights as Common Shares (such equity securities are herein
called "common share equivalents"). To the extent that such common share
equivalents (or fractions thereof) are substituted for Common Shares upon
exercise of the Rights following the occurrence of a Section 11(a)(ii) Event,
they shall be substituted on a pro-rata basis with respect to all Rights (other
than Rights that are beneficially owned by any Acquiring Person (or any
Associate or Affiliate thereof) or were beneficially owned by any Acquiring
Person (or any Associate or Affiliate thereof) after the Acquiring Person became
an Acquiring Person that shall have
-14-
become void pursuant to Section 11(a)(ii)). Such common share equivalents shall
not be included in Available Shares, and all of the Available Shares shall be
reserved, as of the Adjustment Date, for issuance, on a pro-rata basis, upon
exercise of the Rights and may not be substituted for with common share
equivalents upon the exercise of any Right except to the extent that the number
of Common Shares required to be delivered under subparagraph (3)(A) upon the
exercise of such Right exceeds the quotient of the number of Available Shares
divided by the number of Remaining Rights.
(4) If, at the time any adjustment is required pursuant
to this Section 11(a)(iii), the Common Shares shall have no par value, then for
the purposes of this Section 11(a)(iii), the par value of the Common Shares
shall be deemed to be $.10 per share.
(5) If there shall not be sufficient issued but not
outstanding or reserved or authorized but unissued and unreserved Common Shares
(or common share equivalents the issuance of which is permitted under Section
11(a)(iii)(3)(C)) to permit the exercise in full of the Rights in accordance
with this subparagraph (iii), the Company shall use its best efforts to cause
the authorization of sufficient additional Common Shares or common share
equivalents to permit such exercise and, if the Board of Directors of the
Company shall determine in good faith that it is likely that sufficient
additional Common Shares or common share equivalents could be authorized to
permit such exercise, the Company may suspend the exercisability of the Rights
for a period not to exceed 90 days (and not beyond the Final Expiration Date) in
order to seek any authorization of additional Common Shares or common share
equivalents. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
current per share market price of the Preferred Shares (as determined pursuant
to Section 11(d)) on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately before such record date by a fraction, the numerator of which shall
be the number of Preferred Shares outstanding on such record date, plus the
number of Preferred Shares that the aggregate offering price of the total number
of Preferred Shares and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase, at such current per share market price, and the
denominator of which shall be the number of Preferred Shares outstanding on such
record date, plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into which the
-15-
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right. If such subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall again be adjusted to be the Purchase
Price that would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or cash or non-cash assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately before such record date by a fraction, the numerator
of which shall be the current per share market price of the Preferred Shares (as
determined pursuant to Section 11(d)) on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights) of
the portion of the evidences of indebtedness or cash or non-cash assets so to be
distributed on, or of such subscription rights or warrants applicable to, one
Preferred Share, and the denominator of which shall be such then current per
share market price of the Preferred Shares; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company to be
issued upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution is
not so made, the Purchase Price shall again be adjusted to be the Purchase Price
that would then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation
hereunder, the "current per share market price" of any security (a "Security"
for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
before such date; PROVIDED, HOWEVER, that if the current per share market price
of the Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in such Security or securities convertible into such Security (other
than the Rights) or (B) any subdivision, combination or reclassification of such
Security, and before the expiration of 30 Trading Days after the ex-dividend
date for such
-16-
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, if no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported on the Nasdaq National
Market, the Nasdaq SmallCap Market or any similar system then in use, or, if on
any such day the Security is not so quoted or reported, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Security selected by the Board of Directors of the Company.
Except as provided in Section 11(d)(ii) with respect to Preferred Shares, if on
any such day no professional market maker is making a market in the Security,
the fair value of such Security on such day as determined in good faith by the
Board of Directors of the Company (whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights) shall be used in lieu of the closing price for
such day. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day.
(ii) If the Preferred Shares are not publicly
held or listed or traded in a manner described in Section 11(d)(i), then,
notwithstanding anything to the contrary provided in Section 11(d)(i), the
"current per share market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date of
this Agreement) multiplied by one hundred. If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, the "current per
share market price" of the Preferred Shares shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.
(e) Anything herein to the contrary notwithstanding,
except as provided in the third sentence of this Section 11(e), no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; PROVIDED, HOWEVER,
that any adjustments that by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
-17-
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one-millionth of a Preferred Share or ten-thousandth of
any other share or security, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11, but
for the first sentence of this Section 11(e), shall be made no later than the
earlier of (i) three years from the date of the transaction that requires such
adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Section 11(a)
through (c), inclusive and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price under this Agreement
shall evidence the right to purchase, at the adjusted Purchase Price, the number
of one-hundredths of a Preferred Share (or other securities) purchasable from
time to time under this Agreement upon exercise of the Rights, all subject to
further adjustment as provided in this Agreement.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately before the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one-hundredths
of a Preferred Share (calculated to the nearest one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one-hundredths of a share
covered by a Right immediately before this adjustment by (y) the Purchase Price
in effect immediately before such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one-hundredths of a Preferred Share for which a Right was exercisable
immediately before such adjustment. Each Right held of record before such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately before adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights,
-18-
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued on or after the Distribution Date, shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued on or after the Distribution Date, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14, the additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders before the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for in this Agreement, shall bear, at the
option of the Company, the adjusted Purchase Price, and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Regardless of any adjustment or change in the
Purchase Price or the number of one-hundredths of a Preferred Share issuable
upon the exercise of the Rights, the Right Certificates theretofore issued may
continue to express the Purchase Price and the number of one-hundredths of a
Preferred Share that were expressed at the time of the issuance of such Right
Certificates under this Agreement.
(k) Before taking any actions that would cause an
adjustment reducing the Purchase Price below one-hundredth of the then par
value, if any, of the Preferred Shares issuable upon exercise of the Rights, the
Company shall take any corporate action that may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) If this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect before such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that the Board of
-19-
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of any of the Preferred Shares at less than the current per share market
price, (iii) issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, (iv)
dividends on Preferred Shares payable in Preferred Shares or (v) issuance of
rights, options or warrants referred to in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) Anything in this Agreement or the Rights to the
contrary notwithstanding, if at any time after the date of this Agreement and
before the Distribution Date, the Company shall (i) declare or pay any dividend
on the Common Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends on the Common Shares payable in Common
Shares) into a greater or lesser number of Common Shares, then in any such case
(x) the number of one-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying the
number of one-hundredths of a Preferred Share so purchasable immediately before
such event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event and (y) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights that each Common Share outstanding
immediately before such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected. If an event occurs that would require an adjustment under Section
11(a)(ii) and this Section 11(n), the adjustments provided for in this Section
11(n) shall be in addition to, and before, any adjustment required pursuant to
Section 11(a)(ii).
(o) If any adjustment in the Purchase Price pursuant to
paragraph (b) or (c) of this Section 11 would not be permitted by law, under the
Company's Certificate of Incorporation or under the Certificate of Designations
establishing the Preferred Shares, no such issuance of securities or
distribution of evidences of indebtedness or other assets or subscription rights
or warrants, as the case may be, that would require such an adjustment but for
the limitations established by law, the Company's Certificate of Incorporation
or such Certificate of Designations shall be made by the Company.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in Sections 11 and
13, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares or the Preferred Shares a copy of such certificate and (c) if such
adjustment is made after the Distribution Date, mail a brief summary thereof to
each holder of
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record of a Right Certificate in accordance with Section 25. The Rights Agent
shall be fully protected in relying on such certificate and on any adjustment
therein contained.
Section 13. CONSOLIDATION, MERGER, SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) If, on or after the Distribution Date or within 15
days prior thereto, directly or indirectly,
(x) the Company shall consolidate with, or merge
with and into, any other Person, and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(y) any Person shall consolidate with the
Company or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
Common Shares of the Company held by existing stockholders of the Company shall
be changed into or exchanged for stock or other securities of any other Person
(or the Company) or money or any other property (except as a result of the
exercise of statutory dissenters' rights), or
(z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in one or
a series of related transactions, assets or earning power aggregating 50% or
more of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company or one or
more of its wholly owned Subsidiaries),
then, and in each such case, proper provision shall be made so that (i) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof by payment of the amount equal
to the product of the number of one-hundredths of a Preferred Share that would
otherwise be issuable upon exercise of a Right and the then current Purchase
Price in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of validly authorized and issued, fully paid, nonassessable
and freely tradable Common Shares of the Principal Party (as hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or
adverse claims, as shall be equal to the result obtained by (x) multiplying the
then current Purchase Price by the number of one-hundredths of a Preferred Share
for which a Right is, immediately before the occurrence of the Section 13 Event,
exercisable and (y) dividing that product by 50% of the then current per share
market price of the Common Shares of such Principal Party (determined pursuant
to Section 11(d)) on the date of consummation of such Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such merger, consolidation, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party; and (iv) such Principal
-21-
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares to permit the exercise of all outstanding
Rights) in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clauses (x) or (y) of the first sentence of Section 13(a), the Person
(including, without limitation, the Company as successor thereto or as the
surviving corporation) that is the issuer of any securities into which Common
Shares of the Company are converted in such merger or consolidation, or if no
securities are so issued, the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Shares of such
Person are not at such time or have not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person the Common Shares of which
are and have been so registered, "Principal Party" shall refer to such other
Person, and (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized,
unreserved Common Shares which have not been issued or are held in treasury to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any Section 13 Event,
the Principal Party will:
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights, on an appropriate form, and use its best efforts to
cause such registration statement to (A) become effective as soon as practicable
after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (1) the date as of
which the Rights are no longer exercisable for such securities or (2) the Final
Expiration Date;
-22-
(ii) take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act.
(d) The Company shall not enter into any transaction of
the kind referred to in this Section 13 if at the time of such transaction there
are any rights, warrants, instruments or securities outstanding or any
agreements or arrangements that, as a result of the consummation of such
transaction, would eliminate or substantially diminish the benefits intended to
be afforded by the Rights.
The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, sales or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Right Certificates that evidence fractional Rights.
In lieu of such fractional Rights, there may be paid to the registered holders
of the Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately before the date on which such fractional
Rights would have been otherwise issuable. The closing price for any day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported on the
Nasdaq National Market or the Nasdaq SmallCap Market or any similar system then
in use or, if on any such date the Rights are not so quoted or reported, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used in lieu of the closing price
for such day.
-23-
(b) The Company shall not be required to issue fractions
of Preferred Shares (other than fractions that are integral multiples of
one-hundredth of a Preferred Share, or, if a Right shall then be exercisable for
a fraction other than one-hundredth of a Preferred Share, integral multiples of
that fraction) upon exercise of the Rights or to issue certificates which
evidence fractions of Preferred Shares (other than fractions that are integral
multiples of one-hundredth of a Preferred Share or, if a Right shall then be
exercisable for a fraction other than one-hundredth of a Preferred Share,
integral multiples of that fraction). Fractions of Preferred Shares in integral
multiples of one-hundredth of a Preferred Share or, if a Right shall then be
exercisable for a fraction other than one-hundredth of a Preferred Share,
integral multiples of that fraction may, at the election of the Company, be
evidenced by depositary receipts pursuant to an appropriate agreement between
the Company and a depositary selected by it, PROVIDED, that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one-hundredth of
a Preferred Share, or, if a Right shall then be exercisable for a fraction other
than one-hundredth of a Preferred Share, integral multiples of that fraction,
the Company may pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For purposes of
this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i)) for the Trading Day immediately before the date of
such exercise or, if the closing price is not determinable pursuant to the
second sentence of Section 11(d)(i), the current market value of a Preferred
Share shall be determined pursuant to Section 11(d)(ii).
(c) The holder of a Right by the acceptance of the Rights
expressly waives such holder's right to receive any fractional Rights or any
fractional shares (except as provided above) upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement, except the rights of action given to the Rights Agent
under Section 18, are vested in the respective registered holders of the Right
Certificates (and, before the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, before
to the Distribution Date, of any Common Share), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, before the
Distribution Date, of any other Common Share), may, in such holder's own behalf
and for such holder's own benefit, 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 the Rights evidenced by such Right
Certificate (or, before the Distribution Date, the associated Common Shares
certificate) in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under,
-24-
and injunctive relief against actual or threatened violations of the obligations
of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of
a Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) before the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, before the Distribution
Date, the associated Common Shares certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) the Company may issue Rights on or after the Record
Date but before the Distribution Date, and in certain circumstances after the
Distribution Date, as provided in this Agreement; and
(e) notwithstanding anything in this Agreement or the
Rights to the contrary, the Company, the Rights Agent and the Board of Directors
of the Company shall not have any liability to any holder of a Right or other
Person as a result of the inability of the Company or the Rights Agent to
perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company that may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
in this Agreement or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
-25-
or other actions affecting stockholders (except as provided in Section 25), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions of this Agreement.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it under this Agreement
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 under
this Agreement. The Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability or expense (including the costs
and expenses of defending against any claim of liability), incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement.
(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
Right Certificate or certificate for the Preferred Shares or Common Shares or
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of its counsel as set
forth in Section 20.
Section 19. 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 shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement; PROVIDED, HOWEVER, that
such corporation would be eligible for appointment as a successor Rights Agent
under Section 21. If at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
-26-
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates (or, before the Distribution Date, the Common Shares
certificates), by their acceptance of the Rights, 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 shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of the "current per share market price") be proved or
established by the Company before taking or suffering any action under this
Agreement, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Secretary or the Treasurer of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery of this Agreement (except the due execution by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
-27-
the Company of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 11(a)(ii)) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or 24,
or the ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act under this Agreement be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares or Common Shares will,
when issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company 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 under this
Agreement from any one of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer or for delay in acting while waiting for
those instructions.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company or its Subsidiaries may be interested, or
contract with or lend money to the Company or its Subsidiaries or otherwise act
as fully and freely as though it were not Rights Agent under this Agreement.
Nothing in this Agreement shall preclude the Rights Agent from acting in any
other capacity for the Company or its Subsidiaries 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 under this Agreement
either itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
(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 under this Agreement or in the
exercise of its rights or powers if there shall be reasonable
-28-
grounds for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the form of assignment or form of
election to purchase, as the case may be, has either not been duly completed and
executed or indicates an affirmative response to enumerated clause 1 and/or 2 on
the reverse side of the applicable Right Certificate, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or
any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and Preferred Shares by registered or
certified mail, and, if such notice is mailed after the Distribution Date, to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and Preferred Shares by
registered or certified mail, and, if such notice is mailed after the
Distribution Date, to the holders of the Right Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit such
holder's Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the State
of Minnesota or New York (or of any other state of the United States so long as
such corporation is authorized to do business as a banking institution in the
State of Minnesota or New York), in good standing, having an office in the State
of Minnesota or New York that is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and that has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it under this Agreement, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares and Preferred Shares, and, if such notice is filed after the Distribution
Date, mail a notice thereof in writing to the registered holders of
-29-
the Right Certificates. Failure to give any notice provided for in this Section,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. REDEMPTION.
(a) Subject to the provisions of Section 27, the Board of
Directors of the Company may, at its option, at any time before the earlier of
(x) such time as a Person becomes an Acquiring Person or (y) the Close of
Business on the Final Expiration Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement (such redemption price being
hereinafter referred to as the "Redemption Price"). The Redemption Price shall
be payable in cash by the Company. The redemption of the Rights by the Board of
Directors of the Company may be made effective at such time, on such basis and
with such conditions as the Board of Directors of the Company in its sole
discretion may establish. Except for the obligation of the Company to pay the
Redemption Price, the Board of Directors and the Company shall not have any
liability to any Person as a result of the redemption of Rights pursuant to the
terms of this Section 23.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights pursuant to paragraph (a)
of this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board of Directors of the Company
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, before the Distribution Date, on
the registry books of the transfer agent for the Common Shares; PROVIDED,
HOWEVER, that the failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Any notice that is mailed in the manner
provided in this paragraph shall be deemed given whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner except as specifically set forth in this
Section or in Section 24 or in connection with the purchase of Common Shares
before the Distribution Date.
-30-
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii))
for Common Shares, with each Right to be exchanged for such number of Common
Shares as shall equal the result obtained by dividing (x) the Exercise Price (as
defined in Section 11(a)(iii)) by (y) the current per share market price of the
Common Shares (determined pursuant to Section 11(d)) on the date the Rights
first become exercisable for Common Shares pursuant to Section 11(a)(ii) (such
number of shares being hereinafter referred to as the "Exchange Ratio"). The
Exchange Ratio shall be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction affecting the Common Shares that occurs after
the date the Rights first become exercisable for Common Shares pursuant to
Section 11(a)(ii). Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any time after any
Person (other than (1) the Company, (2) any wholly-owned Subsidiary of the
Company, (3) any employee benefit plan of the Company or of any Subsidiary of
the Company or (4) any entity holding Common Shares for or pursuant to the terms
of any plan described in clause (3) of this sentence), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company promptly shall give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights that will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 11(a)(ii)) held by each holder of Rights.
(c) If there shall not be sufficient unreserved Common
Shares issued but not outstanding or authorized, unissued and unreserved to
permit the exchange of Rights as contemplated in accordance with this Section
24, the Company, at its option, may substitute Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b), or common share
equivalents, as such term is defined in Section 11(a)(iii)(3)(C)), for Common
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Shares exchangeable for Rights, at the initial rate of one-hundredth of a
Preferred Share (or equivalent preferred share) or one common share equivalent
for each Common Share, as appropriately adjusted to reflect stock splits, stock
dividends or similar transactions affecting the Common Shares that occur after
the date of this Agreement.
(d) If that there shall not be sufficient unreserved
Common Shares, Preferred Shares, equivalent preferred shares or common share
equivalents, authorized and unissued or issued but not outstanding to permit the
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Common Shares or Preferred Shares, equivalent preferred shares or common share
equivalents for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions
of Common Shares or to distribute certificates that evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company may pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i)) for the Trading Day immediately before the
date of exchange pursuant to this Section. The Board of Directors and the
Company shall not have any liability to any Person as a result of the exchange
of Rights pursuant to the terms of this Section.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) If the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regular quarterly cash dividend), or (ii)
to offer to the holders of its Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), or (iv) to
effect any consolidation or merger into or with any other Person, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or a series of related transactions,
of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons (other than the
Company and/or any of its wholly owned Subsidiaries), or (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends on Common Shares
payable in Common Shares), then, in each such case, the Company shall give to
each holder of a Right Certificate, to the extent feasible and in accordance
with Section 26, a notice of such proposed action, which shall specify the
record
-32-
date for the purposes of such stock dividend or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 10
days before the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least 10
days before the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) If any Section 11(a)(ii) Event shall occur, then, in
any such case, the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which shall specify the event and the consequences
of the event to holders of Rights under Section 11(a)(ii).
Section 26. NOTICES. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage-prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
International Multifoods Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage-prepaid, addressed (until another address is
filed in writing with the Company) as follows:
▇▇▇▇▇ Fargo Bank Minnesota, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager--Shareowner Services
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage-prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may
and the Rights Agent shall, if so directed by the Company, from time to time
supplement or amend this
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Agreement without the approval of any holders of Common Shares or Right
Certificates in order (i) to extend the Final Expiration Date, (ii) to cure any
ambiguity, or to correct or supplement any provision contained in this Agreement
that may be defective or inconsistent with any other provisions in this
Agreement, (iii) before the Distribution Date, to otherwise change, add or
supplement any provision in this Agreement in any manner that the Company may
deem necessary or desirable, or (iv) following the Distribution Date, to
otherwise change, add or supplement any provision in this Agreement in any
manner that the Company may deem necessary or desirable and that shall not
adversely affect the interests of the holders of Right Certificates (other than
Right Certificates evidencing Rights that shall have become null and void
pursuant to Section 11(a)(ii)). Without limiting the foregoing, the Company may
at any time before such time as any Person becomes an Acquiring Person amend
this Agreement to lower the thresholds set forth in Sections 1(a) and 3(a)
hereof from 15% to not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding Common Shares then known by the Company to
be beneficially owned by any Person (other than (1) the Company, (2) any
wholly-owned Subsidiary of the Company, (3) any employee benefit plan of the
Company or any Subsidiary of the Company, or (4) any entity holding Common
Shares for or pursuant to the terms of any plan described in clause (3) of this
sentence) or (ii) 10%.
Section 28. SUCCESSORS. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. BENEFITS OF THIS AGREEMENT.
(a) Nothing in this Agreement shall be construed to give
to any Person other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, before the Distribution Date, the
registered holders of Common Shares) any legal or equitable right, remedy or
claim under this Agreement. This Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, before the Distribution Date, the registered holders of
Common Shares).
(b) The Board of Directors of the Company shall have the
exclusive power and total and complete authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board of
Directors or the Company or necessary or advisable in the administration of this
Agreement, including without limitation the right and power to interpret this
Agreement and to make conclusively all determinations deemed necessary or
advisable for the administration of this Agreement. All such acts, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent and the holders of the Rights and all other parties
and (y) not subject the Board of Directors to any liability to the holders of
the Rights or any other party.
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Section 30. SEVERABILITY. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
Section 31. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of the State of Delaware applicable to
contracts to be made and performed entirely within such state, except for
Sections 18, 19, 20 and 21, which shall be governed and construed in accordance
with the laws of the State of Minnesota.
Section 32. COUNTERPARTS. This Agreement may be executed
in any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings
of the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Agreement.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
INTERNATIONAL MULTIFOODS
CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Its: Vice President, Finance and Chief
Financial Officer
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Its: Secretary
▇▇▇▇▇ FARGO BANK MINNESOTA,
N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Its: Vice President
-36-
EXHIBIT A
CERTIFICATE OF DESIGNATIONS OF SERIES A JUNIOR
PARTICIPATING PREFERRED CAPITAL STOCK
OF
INTERNATIONAL MULTIFOODS CORPORATION
(PURSUANT TO SECTION 151 OF THE DELAWARE GENERAL CORPORATION LAW)
International Multifoods Corporation, a corporation organized
and existing under the General Corporation Law of the State of Delaware (the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation, in accordance with the provisions of
Section 151 of the General Corporation Law at a meeting duly called and held on
September 15, 2000:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of its Restated
Certificate of Incorporation, as amended (the "Certificate of Incorporation"), a
series of Preferred Capital Stock, par value one dollar ($1.00) per share (as
such par value may be changed from time to time, the "Preferred Shares" or
"Preferred Stock"), of the Corporation be, and it hereby is, created and that
the designation and number of shares thereof and the relative rights,
preferences and limitations of the shares of such series, are as follows:
1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as "Series A Junior Participating Preferred Capital Stock "
(the "Series A Preferred Shares"), and the number of shares constituting such
series shall be Five Hundred Thousand (500,000). The number of shares
constituting such series may, unless prohibited by the Certificate of
Incorporation or by applicable law of the State of Delaware, be increased or
decreased by resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of Series A Preferred Shares to a number less than the
number of shares then outstanding plus the number of shares issuable upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series A
Preferred Shares.
2. DIVIDENDS AND DISTRIBUTIONS.
(i) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or any similar stock ranking prior and
superior to the Series A Preferred Shares), the holders of Series A Preferred
Shares, in preference to the holders of Common Stock, par value ten cents
($0.10) per share (the "Common Shares" or "Common Stock") and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first business day of March, June, September
and December in each year (each such date
A-1
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a Series A
Preferred Share, or fraction thereof, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision
for adjustment hereinafter set forth, one hundred (100) times the aggregate per
share amount of all cash dividends, and one hundred (100) times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any Series A Preferred Share, or
fraction thereof. In the event the Corporation shall at any time after October
4, 2000 declare or pay any dividend on shares of Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend on shares of Common Stock payable in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of Series A Preferred Shares were entitled
immediately before such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately before such event.
(ii) The Corporation shall declare a dividend or
distribution on the Series A Preferred Shares as provided in subparagraph (i) of
this paragraph 2 simultaneously with its declaration of a dividend or
distribution on the shares of Common Stock (other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock); provided that, if no dividend or distribution shall have been declared
on the shares of Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1.00 per share on the Series A Preferred Shares shall nevertheless be
payable, out of funds legally available for such purpose, on such subsequent
Quarterly Dividend Payment Date.
(iii) Dividends shall begin to accrue and be
cumulative on outstanding Series A Preferred Shares from the Quarterly Dividend
Payment Date immediately preceding the date of issue of such Series A Preferred
Shares, unless the date of issue of such shares is before the record date for
the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of Series A Preferred Shares
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the Series A Preferred
Shares in an amount less than the total amount of such dividends at the time
accrued and payable on such
A-2
shares shall be allocated pro rata on a share-by-share basis among all such
shares outstanding at that time. The Board of Directors may fix a record date
for the determination of holders of Series A Preferred Shares entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than sixty (60) days before the date fixed for the
payment thereof.
3. VOTING RIGHTS. The holders of Series A Preferred
Shares shall have the following voting rights:
(i) Subject to the provision for adjustment
hereinafter set forth, each Series A Preferred Share shall entitle the holder
thereof to one hundred (100) votes on all matters submitted to a vote of the
stockholders of the Corporation. If the Corporation shall at any time after
October 4, 2000 declare or pay any dividend on Common Stock payable in Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the number of
votes per share to which holders of Series A Preferred Shares were entitled
immediately before such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately before such
event.
(ii) Except as otherwise provided herein, in any
other Certificate of Designations creating a series of Preferred Stock or by
law, the holders of Series A Preferred Shares and the holders of shares of
Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of the stockholders of the Corporation.
(iii) Except as otherwise provided herein or by
law, the holders of Series A Preferred Shares shall have no special voting
rights and their consent shall not be required (except to the extent they are
entitled to vote with holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights as set forth herein) for
taking any corporate action.
4. CERTAIN RESTRICTIONS.
(i) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred Shares as provided
in paragraph 2 hereof are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on Series A
Preferred Shares outstanding shall have been paid in full, the Corporation shall
not:
(a) declare or pay dividends, or make
any other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Shares;
A-3
(b) declare or pay dividends, or make
any other distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Shares, except dividends paid ratably on the Series A Preferred Shares
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;
(c) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Shares, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for shares of
stock of the Corporation ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Shares; or
(d) redeem or purchase or otherwise
acquire for consideration any Series A Preferred Shares, or any shares of stock
ranking on a parity with the Series A Preferred Shares, except in accordance
with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(ii) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation could, under
subparagraph (i) of this paragraph 4, purchase or otherwise acquire such shares
at such time and in such manner.
5. REACQUIRED SHARES. Any Series A Preferred Shares
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued Preferred
Shares and may be reissued as part of a new series of Preferred Stock by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designations creating a series of
Preferred Stock or as otherwise required by law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Shares unless, prior thereto, the holders of Series A Preferred Shares
shall have received the greater of (i) $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (ii) an aggregate amount per share, subject to
the provision for adjustment
A-4
hereinafter set forth, equal to one hundred (100) times the aggregate amount to
be distributed per share to holders of Common Stock, or (b) to the holders of
shares of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Shares, except
distributions made ratably on the Series A Preferred Shares and all other such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. If the
Corporation shall at any time after October 4, 2000 declare or pay any dividend
on the shares of Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise) into a greater or lesser number of Common Stock,
then in each such case the aggregate amount to which holders of Series A
Preferred Stock were entitled immediately before such event under clause (a)(ii)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of Common Stock outstanding
immediately after such event and the denominator of which is the number of
Common Stock that were outstanding immediately before such event.
7. CONSOLIDATION, MERGER, EXCHANGE, ETC. If the
Corporation shall enter into any consolidation, merger, combination, or other
transaction in which the Common Shares are exchanged for or changed into other
stock or securities, money and/or any other property, then in any such case the
Series A Preferred Shares shall at the same time be similarly exchanged or
changed into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to one hundred (100) times the aggregate amount of
stock, securities, money and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. If the Corporation shall at any time after October 4, 2000 declare or
pay any dividend on shares of Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise then by payment of a dividend
on shares of Common Stock payable in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of Series
A Preferred Shares shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately before such event.
8. NO REDEMPTION. The Series A Preferred Shares shall
not be redeemable.
9. RANK. The Series A Preferred Shares shall rank junior
with respect to the payment of dividends and distribution of assets upon
liquidation, dissolution or winding up to all other series of the Corporation's
Preferred Stock hereafter issued that specifically provide that they shall rank
senior to the Series A Preferred Shares.
10. FRACTIONAL SHARES. Series A Preferred Shares may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to
A-5
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Shares.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Vice President, Finance and
Chief Financial Officer and attested by its Secretary, all as of the 15th day
of September, 2000.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Its: Vice President, Finance and
Chief Financial Officer
------------------------------------
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Its Secretary
A-6
EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
Certificate No. R- ______ __________Rights
NOT EXERCISABLE AFTER OCTOBER 4, 2010 OR SUCH EARLIER DATE AS THE BOARD
OF DIRECTORS ORDERS REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT (SUBJECT TO
ADJUSTMENT) AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE
OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
INTERNATIONAL MULTIFOODS CORPORATION
This certifies that ________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of September 15, 2000 (the "Rights Agreement")
between International Multifoods Corporation, a Delaware corporation (the
"Company"), and ▇▇▇▇▇ Fargo Bank Minnesota, N.A., a national banking association
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and before
5:00 p.m. (New York City time) on October 4, 2010 at the office or offices of
the Rights Agent designated for such purpose, or of its successor as Rights
Agent, one-hundredth of a fully paid, nonassessable share of Series A Junior
Participating Preferred Capital Stock, $1.00 par value per share of the Company
(the "Preferred Shares"), at a purchase price of $70 per one-hundredth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly completed and
executed. The number of Rights evidenced by this Right Certificate (and the
number of one-hundredths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are,
except for adjustments required pursuant to the Rights Agreement, the number and
Purchase Price as of October 4, 2000, based on the Preferred Shares as
constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of one-hundredths of a Preferred Share that may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
B-1
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and which Rights Agreement contains a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates (which
limitations of rights include the voiding of the Rights under certain
circumstances specified in the Rights Agreement). Copies of the Rights Agreement
are on file with the Secretary of the Company at its principal executive office
and will be mailed without charge by the Company or the Rights Agent to the
holder of this certificate promptly following receipt by the Company or the
Rights Agent of a written request therefor.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), any Rights evidenced by this Right
Certificate that are beneficially owned by an Acquiring Person or an Associate
or Affiliate of such Acquiring Person (as such terms are defined in the Rights
Agreement) or were beneficially owned by an Acquiring Person or an Associate or
Affiliate of such Acquiring Person after the Acquiring Person becomes an
Acquiring Person shall be null and void from and after the occurrence of such
Section 11(a)(ii) Event.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one-hundredths of a Preferred Share as
the Rights evidenced by the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may, but are not required to, be redeemed by
the Company at a redemption price of $.001 per Right, subject to adjustment as
provided in the Rights Agreement, payable in cash and (ii) may, but are not
required to, be exchanged by the Company in whole or in part for shares of
Common Stock or other shares of capital stock of the Company. The Board of
Directors of the Company and the Company shall not have any liability to any
person as a result of the redemption or exchange of the Rights pursuant to the
provisions of the Rights Agreement.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractional shares
which are integral multiples of one-hundredth of a Preferred Share or, if a
Right shall then be exercisable for a fraction other than one-hundredth of a
Preferred Share, integral multiples of that fraction, which may, at the election
of the Company, be evidenced by depositary receipts), if in lieu thereof a cash
payment is made, as provided in the Rights Agreement.
B-2
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company that 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 Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned, manually or by facsimile
signature, by the Rights Agent.
WITNESS the manual or facsimile signature of the proper
officer of the Company.
Dated:____________________
INTERNATIONAL MULTIFOODS
CORPORATION
By:
-----------------------------------
Its:
-------------------------------
ATTEST:
By:
---------------------------------
Its:
----------------------------
Countersigned:
▇▇▇▇▇ FARGO BANK MINNESOTA, N.A.
By:
---------------------------------
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________ hereby sells, assigns and transfers
unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:_________________________
------------------------------------------
Signature
Signature Medallion Guaranteed:
Signatures must be Medallion 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 or by an eligible guarantor institution
(bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program), pursuant to Rule 17Ad-15
promulgated under the Securities Exchange Act of 1934, as amended.
B-4
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the
best of its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
/ / are
or
/ / are not
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
/ / did
or
/ / did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
-----------------------------------------
Signature
NOTICE
The signature of the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-5
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
TO: INTERNATIONAL MULTIFOODS CORPORATION
The undersigned hereby irrevocably elects to exercise
___________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights (or such other
securities of the Company or of any other person that may be issuable upon
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
Dated:_______________________
-----------------------------------------
Signature
B-6
Signature Medallion Guaranteed:
Signatures must be Medallion 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 or by an eligible guarantor institution
(bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program), pursuant to Rule 17Ad-15
promulgated under the Securities Exchange Act of 1934, as amended.
B-7
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the
best of its knowledge) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
/ / are
or
/ / are not
being exercised by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) the undersigned
/ / did
or
/ / did not
acquire the Rights evidenced by this Right Certificate from any Person who, at
any time that such Person beneficially owned such Rights, is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
------------------------------------------
Signature
NOTICE
The signature of the foregoing Election to Exercise and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
B-8
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
OF
INTERNATIONAL MULTIFOODS CORPORATION
On September 15, 2000, the Board of Directors of International
Multifoods Corporation (the "Company"), declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of Common Stock of
the par value of $.10 per share (the "Common Shares") of the Company. The
dividend is payable on October 4, 2000 (the "Record Date") to stockholders of
record on that date.
Each Right entitles the registered holder to purchase from
the Company one-hundredth of a share of Series A Junior Participating
Preferred Capital Stock, $1.00 par value per share (the "Preferred Shares"),
of the Company at a price of $70 per one-hundredth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement"), dated as
of September 15, 2000, between the Company and ▇▇▇▇▇ Fargo Bank Minnesota,
N.A., as Rights Agent (the "Rights Agent").
Initially, the Rights will attach to all certificates
representing Common Shares then outstanding and no separate Right Certificates
will be distributed. The Rights will separate from the Common Shares and a
Distribution Date for the Rights will occur, subject to certain exceptions, upon
the earlier of:
(i) the close of business on the fifteenth day
following a public announcement that a person or group of affiliated or
associated persons has become an "Acquiring Person" (i.e., has become, subject
to certain exceptions, the beneficial owner of 15% or more of the outstanding
Common Shares), or
(ii) the close of business on the fifteenth day
following the first public announcement relating to a tender offer or exchange
offer the consummation of which would result in a person or group of affiliated
or associated persons becoming, subject to certain exceptions, the beneficial
owner of 15% or more of the outstanding Common Shares (or such later date as may
be determined by the Board of Directors of the Company before a person or group
of affiliated or associated persons becomes an Acquiring Person).
Until the Distribution Date,
(i) the Rights will be evidenced by the Common
Share certificates and will be transferred with and only with the Common Shares,
C-1
(ii) new Common Share certificates issued after
the Record Date upon transfer or new issuance of the Common Shares will contain
a notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any Common
Share certificate, even without such notation or a copy of this Summary of
Rights attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate.
As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on October 4, 2010, unless extended or earlier redeemed
or exchanged by the Company as described below.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution:
(i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Shares,
(ii) upon the grant to holders of the Preferred
Shares of certain rights, options or warrants to subscribe for or purchase
Preferred Shares or convertible securities at less than the then current market
price of the Preferred Shares, or
(iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends or dividends payable in Preferred Shares) or of
subscription rights or warrants (other than those described in clause (ii)
hereof).
The number of Preferred Shares issuable upon the exercise of a Right is also
subject to adjustment in the event of a dividend on Common Shares payable in
Common Shares, or a subdivision, combination or consolidation of the Common
Shares.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in the Purchase Price. No fractional Preferred Shares will be issued (other
than fractional shares which are integral multiples of one-hundredth (subject to
adjustment) of a Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts) if in lieu of such issuance a
C-2
payment in cash is made based on the closing price (pro-rated for the fraction)
of the Preferred Shares on the last trading date before the date of exercise.
If any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that each holder
of a Right, other than Rights that are or were beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter have the right
to receive upon exercise of the Right at the then current exercise price of the
Right that number of Common Shares having a market value of two times the
exercise price of the Right, subject to certain possible adjustments.
If, on or after the Distribution Date or within 15 days prior
thereto, the Company is acquired in certain mergers or other business
combination transactions or 50% or more of the assets or earning power of the
Company and its subsidiaries (taken as a whole) are sold on or after the
Distribution Date or within 15 days prior thereto in one or a series of related
transactions, each holder of a Right (other than Rights that have become void
under the terms of the Rights Agreement) will thereafter have the right to
receive, upon exercise of the Right at the then current exercise price of the
Right, that number of common shares of the acquiring company (or, in certain
cases, one of its affiliates) having a market value of two times the exercise
price of the Right.
In certain events specified in the Rights Agreement, the
Company is permitted temporarily to suspend the exercisability of the Rights.
At any time after a person or group of affiliated or
associated persons becomes an Acquiring Person (subject to certain exceptions)
and before the acquisition by a person or group of affiliated or associated
persons of 50% or more of the outstanding Common Shares, the Board of Directors
of the Company may exchange all or part of the Rights (other than Rights that
have become void under the terms of the Rights Agreement) for Common Shares or
equivalent securities at an exchange ratio per Right equal to the result
obtained by dividing the exercise price of a Right by the current per share
market price of the Common Shares, subject to adjustment.
At any time before a person or group of affiliated or
associated persons becomes an Acquiring Person, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price of $.001 per
Right, subject to adjustment (the "Redemption Price"), payable in cash. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. The Board of Directors and the Company shall not have any liability
to any person as a result of the redemption or exchange of the Rights pursuant
to the provisions of the Rights Agreement.
The terms of the Rights may be amended by the Board of
Directors of the Company, subject to certain limitations after the Distribution
Date, without the consent of the holders of the Rights, including an amendment
before a person or group of affiliated or
C-3
associated persons becomes an Acquiring Person to lower the 15% threshold for
exercisability of the Rights to not less than the greater of (i) the sum of
.001% and the largest percentage of the outstanding Common Shares then known by
the Company to be beneficially owned by any person or group of affiliated or
associated persons (subject to certain exceptions) or (ii) 10%.
Until a Right is exercised, the holder of the Right, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated September __, 2000. A copy of the Rights Agreement, as amended,
is available free of charge from the Company by contacting the Secretary at
International Multifoods Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
as amended, which is hereby incorporated herein by reference.
C-4