256148.5 ii
RIGHTS AGREEMENT
__________________
AGRIBRANDS INTERNATIONAL, INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Rights Agent
___________________
Dated as of March 31, 1998
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i
INDEX
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Page
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Section 1 - Certain Definitions 1
Section 2 - Appointment of Rights Agent 5
Section 3 - Issue of Rights Certificates 5
Section 4 - Form of Right Certificates 7
Section 5 - Countersignature and Registration 8
Section 6 - Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated,
Destroyed, Lost or Stolen 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 - Availability of Common Shares
10
Section 10 - Record Holders of Common Shares Issued Upon Exercise of Rights
11
Section 11 - Adjustment of Purchase Price, Number and Kind of Common Shares or
Number of Rights
11
Section 12 - Certificate of Adjustment
16
Section 13 - Consolidation, Merger or Sale or Transfer of Assets or Earning
Power 16
Section 14 - Fractional Rights and Fractional Shares
19
Section 15 - Rights of Action
20
Section 16 - Agreement of Right Holders
20
Section 17 - Right Certificate Holder Not Deemed a Stockholder
20
Section 18 - Concerning the Rights Agent
21
Section 19 - Merger or Consolidation or Change of Name of Rights Agent
21
Section 20 - Duties of Rights Agent
22
Section 21 - Change of Rights Agent
23
Section 22 - Issuance of New Right Certificates
24
Section 23 - Redemption
24
Section 24 - Exchange
25
Section 25 - Notice of Certain Events
26
Section 26 - Notices
26
Section 27 - Supplements and Amendments
27
Section 28 - Successors
28
Section 29 - Determinations and Actions by the Board of
Directors 28
Section 30 - Benefits of This Rights Agreement
28
Section 31 - Severability
28
Section 32 - Governing Law
28
Section 33 - Counterparts
29
Section 34 - Descriptive Headings
29
Exhibit A - Form of Right Certificate
Exhibit B- Summary of Rights to Purchase Common Shares
RIGHTS AGREEMENT
This Rights Agreement (the "Rights Agreement"), effective as of March 31,
1998, between AGRIBRANDS INTERNATIONAL, INC., a Missouri corporation (the
"Company"), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York banking
corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on March ___, 1998, the Board of Directors of the Company
authorized and declared a dividend of one common share purchase right for each
share of the Company's common stock outstanding at the close of business on
March 31, 1998, (the "Record Date"), each such right representing the right to
purchase one share of the Company's common stock upon the terms and subject to
the conditions herein set forth. At that time the Board further authorized
and directed the issuance of one common share purchase right with respect to
each share of the Company's common stock that became outstanding between the
Record Date and the Distribution Date (as hereinafter defined);
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 Rights
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Agreement, the following terms have the meanings indicated:
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(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall become, at any time after
the date of this Rights Agreement (whether or not such status continues for
any period), the Beneficial Owner of Common Shares representing 20% or more of
the Common Shares then outstanding, other than as a result of a Permitted
Offer. Notwithstanding the foregoing, (A) the term "Acquiring Person" shall
not include (i) the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan, (ii) any
Person, who or which together with all Affiliates and Associates of such
Person becomes the Beneficial Owner of 20% or more of the then outstanding
Common Shares as a result of the acquisition of Common Shares directly from
the Company (provided, however, that if, after such acquisition, such Person,
or an Affiliate or Associate of such Person, becomes the Beneficial Owner of
any additional Common Shares in an acquisition not made directly from the
Company, then such Person shall be deemed an Acquiring Person), or (iii) a
Grandfathered Person, and (B) no Person shall be deemed to be an "Acquiring
Person" (X) as a result of the acquisition of Common Shares by the Company
which, by reducing the number of Common Shares outstanding, increases the
proportional number of shares beneficially owned by such Person together with
all Affiliates and Associates of such Person; except that if (i) a Person
would become an Acquiring Person (but for the operation of this subclause (X))
as a result of the acquisition of Common Shares by the Company, and (ii) after
such share acquisition by the Company, such Person, or an Affiliate or
Associate of such Person, becomes the Beneficial Owner of any additional
Common Shares, then such Person shall be deemed an Acquiring Person, (Y) if
such Person, or an Affiliate or Associate of such Person, inadvertently
becomes the Beneficial Owner of 20% or more of the outstanding Common Shares,
or (Z) if a Person, or an Affiliate or Associate of such Person, is the
involuntary transferee of Common Shares from a Grandfathered Person
(including, but not limited to, when such involuntary transfer is as a result
of the death of a Grandfathered Person), provided that, in the case of any
situation referred to in subclause (Y) or (Z) above (1) within 8 days
thereafter such Person notifies the Board of Directors that such Person
acquired the Common Shares in question inadvertently or involuntarily,
respectively, and (2) within 2 days after such notification, such Person is
the Beneficial Owner of less than 20% of the outstanding Common Shares.
Notwithstanding anything to the contrary herein, any Common Shares owned by a
Grandfathered Person shall not be taken into account when computing the number
of Common Shares beneficially owned by an Affiliate or Associate of a
Grandfathered Person, provided that such Affiliate or Associate (i) does not
constitute a member of a group (as defined for purposes of Section 13(d) of
the Exchange Act) including such Grandfathered Person, or (ii) is not
otherwise acting in concert with such Grandfathered Person, each with respect
to the Company.
(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 Exchange Act. A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to have acquired "beneficial ownership" of, or to
"beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange Act as
in effect on the date hereof;
(ii) which such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities 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 pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) Which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso
to Section 1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of "Beneficial Owner" 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 which such Person
would be deemed to own beneficially hereunder.
(c) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
(d) "Close of Business" on any given date shall mean 5:00 P.M., New York
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., New York time, on the next succeeding Business Day.
(e) "Common Shares" when used with reference to the Company shall mean
shares of the Company's common stock, par value $.01 per share, and any other
class or classes or series of common stock of the Company resulting from any
subdivision, combination, recapitalization or reclassification of shares of
such common stock.
(f) "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 which ultimately control such
first-mentioned Person.
(g) "Company" shall have the meaning set forth in the recitals to this
Rights Agreement.
(h) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, as in effect on the date of this Rights Agreement.
(j) "Exchange Ratio" shall have the meaning set forth in Section 24
hereof.
(k) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(l) "Grandfathered Person" shall mean any of the members of the
Company's Board of Directors as of the date of this Rights Agreement, who are
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immediate family and any other Grandfathered Person; provided, however, that a
Grandfathered Person shall cease to be a Grandfathered Person at the time that
(i) such Person is no longer a member of the Company's Board of Directors, and
(ii) thereafter such Person becomes the Beneficial Owner of any Common Shares
of the Company, other than as a result of (A) a dividend or distribution on
the Common Shares, payable in Common Shares or securities convertible into
Common Shares, which such dividend or distribution is payable to all holders
of Common Shares, (B) a subdivision, combination, recapitalization or
reclassification of the Common Shares, or (C) an acquisition of Common Shares
as a result of exercise of Rights.
(m) "NASDAQ" shall have the meaning set forth in Section 11(d)
hereof.
(n) "Permitted Offer" shall mean a tender or exchange offer which is for
all outstanding Common Shares at a price and on terms determined, prior to the
purchase of shares under such tender or exchange offer, by at least a majority
of the members of the Board of Directors who are not officers of the Company
and who are not (or would not be, if the offer were consummated) Acquiring
Persons or Affiliates, Associates, nominees or representatives of an Acquiring
Person, to be adequate and otherwise in the best interests of the Company and
its stockholders (other than the Person or any Affiliate or Associate thereof
on whose basis the offer is being made). In determining whether an offer is
adequate or in the best interests of the Company and its shareholders, the
Board may take into account all factors that it deems relevant including,
without limitation,
(1) the consideration being offered in the proposal in relation to the
Board's estimate of: (i) the current value of the Company in a freely
negotiated sale of either the Company by merger, consolidation or otherwise,
or all or substantially all of the Company's assets, (ii) the current value of
the Company if orderly liquidated, and (iii)the future value of the Company
over a period of years as an independent entity discounted to current value;
(2) then existing political, economic and other factors bearing on
security prices generally or the current market value of the Company's
securities in particular;
(3) whether the proposal might violate federal, state or local laws;
(4) social, legal and economic effects on employees, suppliers, customers
and others having similar relationships with the Company, and the communities
in which the Company conducts its businesses;
(5) the financial condition and earnings prospects of the person making
the proposal including the person's ability to service its debt and other
existing or likely financial obligations; and
(6) the competence, experience and integrity of the person making the
acquisition proposal.
(o) "Person" shall mean any individual, firm, partnership, corporation,
trust, association, joint venture or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(p) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(q) "Purchase Price" shall have the meaning set forth in Section 7(a)
hereof.
(r) "Record Date" shall have the meaning set forth in the recitals to this
Rights Agreement.
(s) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(t) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(u) "Rights" shall mean the rights to purchase Common Shares authorized by
the Board of Directors of the Company after the Record Date.
(v) "Rights Agent" shall have the meaning set forth in the recitals to
this Rights Agreement.
(w) "Rights Agreement" shall have the meaning set forth in the recitals to
this Rights Agreement.
(x) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
(y) "Securities Act" shall mean the Securities Act of 1933, as amended, as
in effect from time to time during the term of this Rights Agreement.
(z) "Shares Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become
such; provided, that, if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a) hereof, then no Shares Acquisition
Date shall be deemed to have occurred.
(aa) "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
equity interest is owned, directly or indirectly, by such Person.
(bb) "Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
(cc) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(dd) "Voting Securities" shall have the meaning set forth in Section 13(a)
hereof.
Section 2 - Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3 - Issue of Rights Certificates.
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(a) Until the earlier of (i) the close of business on the tenth Business
Day after the Shares Acquisition Date or (ii) the close of business on the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any Person becomes an
Acquiring Person) after the date that a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, or 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) is first
published or sent or given within the meaning of Rule 14d-2 of the General
Rules and Regulations under the Exchange Act, if upon consummation thereof,
such Person would be the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding; 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 the Common
Shares, or other documents or book-entries evidencing Common Shares,
registered in the names of the holders thereof (which certificates, other
documents or book-entries shall also be deemed to be certificates for Rights)
and not by separate certificates, and (y) the Rights (and the right to receive
separate certificates ("Right Certificates" as defined below)) will be
transferable only in connection with the transfer of the underlying Common
Shares (including a transfer to the Company) as more fully set out below. As
soon as practicable after the Distribution Date, the Company will either (I)
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, a Right Certificate, which shall
be in substantially the form of Exhibit A hereto, or (II) if the Board of
Directors deems appropriate, make arrangements for such other certificates,
other documents or book entries to evidence the Rights (in either case (I) or
(II) the evidence of Rights is referred to herein as the "Right Certificate"),
evidencing one Right for each Common Share so held, subject to adjustment as
provided herein. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Common Shares, in substantially
the form of Exhibit B 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. 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 outstanding, 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.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired shares which are subsequently disposed of by
the Company) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them a legend
substantially to the following effect:
"This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement between Agribrands International,
Inc. (the "Company") and Continental Stock Transfer & Trust Company (the
"Rights Agreement"), as it may from time to time be supplemented or amended,
the terms of which are incorporated herein by reference and a copy of which is
on file at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such rights may expire or
may be redeemed, exchanged or be evidenced by separate certificates or book
entry and 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 promptly after receipt of a written request therefor. Under certain
circumstances, rights issued to or held by Acquiring Persons or their
Affiliates or Associates (as defined in the Rights Agreement) and any
subsequent holder of such rights may become null and void."
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated therewith. In the event that the Company
purchases or acquires any Common Shares prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
unless and until such Common Shares are subsequently issued by the Company so
that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
Section 4 - Form of Right Certificates.
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(a) The Right Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall be substantially the
same as provided for in Exhibit A hereto, or, if the Board of Directors deems
appropriate, such other certificates, other documents or book entries
evidencing the Rights, 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 Rights Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Section 22
hereof, the Right Certificates, whenever issued, shall be dated as of the
Record Date, and shall entitle the holders thereof to purchase such number and
kind of Common Shares as shall be set forth therein at the price per share set
forth therein, but the number and kind of such Common Shares and the price per
share shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights which are null and void pursuant to Section
11(a)(ii) of this Rights Agreement and any Right Certificate issued pursuant
to Section 6, Section 11 or Section 22 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall contain (to the extent feasible) a legend substantially to the
following effect:
"The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Right Certificate and the Rights represented
hereby are null and void."
Notwithstanding the above provision, failure to place such legend on any
Rights Certificate representing Rights which are otherwise null and void
pursuant to the terms of this Rights Agreement, shall not affect the null and
void status of such Rights.
Section 5 - Countersignature and Registration. The Right
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Certificates, unless the Board of Directors deems it appropriate for the
------
Rights to be evidenced in book entry form only, shall be executed on behalf of
the Company by its Chairman of the Board, its Chief Executive Officer, its
President, its Chief Financial Officer, or its Treasurer, either manually or
by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, if any, and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Right Certificates, unless the Board of Directors deems it appropriate for
the Rights to be evidenced in book entry form only, shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same force
and effect as though the person who signed such Right Certificates 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
execution 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. Following the
Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate place for surrender
of such Right Certificate or transfer, books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6 - Transfer, Split Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
----------------------------------------------------------------------------
Subject to the provisions of Section 14 hereof, at any time after the Close of
------
Business on the Distribution Date, and at or prior to 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) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
respectively, entitling the registered holder to purchase a like number and
kind of Common Shares as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office or
offices of the Rights Agent designated for such purpose. Thereupon, the
Rights Agent shall countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates. 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
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 delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7 - Exercise of Rights; Purchase Price; Expiration Date of Rights.
----------- --------------------------------------------------------------
(a) Subject to Section 11(a)(ii) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) 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 executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for
such purpose, together with payment of the price per share (rounded to the
nearest cent) provided for in paragraph (b) below (the "Purchase Price") for
each Common Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on March 31, 2008 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each Common Share pursuant to the exercise of a
Right shall initially be $_____, subject to adjustment from time to time as
provided in Sections 11 and 13 hereof, and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the Common 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 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) requisition from any transfer agent of the Common
Shares certificates, or such other documents or book-entries then evidencing
Common Shares, for the number and kind of Common Shares to be purchased (or
depository receipts when appropriate) and the Company hereby irrevocably
authorizes its transfer agents to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates, or such other documents or
book-entries then evidencing Common Shares, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and (iv)
when appropriate, after receipt, deliver such cash 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 to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) So long as the Common Shares issuable upon the exercise of Rights may
be listed on any national securities exchange, the Company shall use its best
efforts to cause all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
Section 8 - Cancellation and Destruction of Right Certificates. All
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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 any of the provisions of this Rights 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, or
shall, at the written request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9 - Availability of Common Shares.
------------- ---------------------------------
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Common Shares or any Common
Shares held in its treasury, the number and kind of Common Shares that will be
sufficient to permit the exercise in full of all outstanding Rights in
accordance with this Rights Agreement.
(b) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Common Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates, other documents or
book-entries then evidencing such shares (subject to payment of the Purchase
Price), (i) be duly and validly authorized and issued and fully paid and
nonassessable Common Shares, and (ii) be registered under the Securities Act
of 1933, as amended, and "blue sky laws" of the various states.
(c) The Company covenants and agrees that it will pay when due and payable
any and all federal and state transfer taxes and charges which may be payable
in respect of the issuance or delivery of the Right Certificates or of any
Common Shares upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates, or other documents or book-entries then
evidencing Common Shares, or depository receipts for the Common Shares in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to deliver any
certificates, other documents or book-entries then evidencing Common 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 - Record Holders of Common Shares Issued Upon Exercise of
-------------- -------------------------------------------------------
Rights. Each person in whose name any certificate, other document or
------
book-entry for Common Shares is issued upon the exercise of Rights shall for
------
all purposes be deemed to have become the holder of record of the Common
Shares represented thereby on, and such certificate, other document or
book-entry 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 Company's transfer
books for the Common Shares are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate, other
document or book-entry shall be dated, the next succeeding Business Day on
which such transfer books are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Common Shares for which the Rights evidenced thereby
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 Common
-------------- -------------------------------------------------------
Shares or Number of Rights. The Purchase Price, the number of Common Shares
----------------------------
or other securities 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) In the event the Company shall at any time after the Record
Date (A) declare a dividend on the Common Shares payable in Common Shares, (B)
subdivide the outstanding Common Shares into a greater number of such shares,
(C) combine the outstanding Common Shares into a smaller number of such
shares, or (D) issue any shares of its capital stock in a reclassification of
Common Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect for Rights at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right exercised
after such time shall, upon payment of the Purchase Price then in effect, be
entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date and at
a time when the Common Shares transfer books of the Company were open, he
would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise
of one such Right be less than the per share par value of the Common Shares.
If an event occurs which 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 prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Rights Agreement, in the event any
Person becomes an Acquiring Person, then the Purchase Price for each Common
Share issuable upon exercise of Rights shall be reduced to an amount equal to
33-1/3% of the current market price per share of such Common Share (determined
pursuant to Section 11(d)) on the Shares Acquisition Date. Notwithstanding the
above, if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof, then only
the provisions of Section 13 hereof shall apply and no adjustment shall be
made pursuant to this Section 11(a)(ii). From and after the occurrence of the
event described above, any Rights that are or were acquired or beneficially
owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be null and void and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of this Rights
Agreement. No Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the transfer of
any Rights to or from an Acquiring Person whose Rights would be void pursuant
to the preceding sentence or any Associate or Affiliate thereof or to or from
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to or from an Acquiring
Person (or any Associate, Affiliate or nominee of such Acquiring Person) whose
Rights would be void pursuant to the preceding sentence shall be canceled.
(iii) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii), the Company
shall, to the extent permitted by applicable law, take all such action as may
be necessary to authorize additional Common Shares for issuance upon exercise
of the Rights, including the calling of a meeting of shareholders; provided,
however, if the Company is unable to cause the authorization of additional
Common Shares then the Company, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect on the date hereof
to which it is a party, shall, at its option (A) pay cash equal to twice the
applicable Purchase Price (as adjusted pursuant to this Section 11) in lieu of
issuing any such Common Shares and requiring payment therefor, or (B) issue
equity securities having a value equal to the market price of Common Shares
which otherwise would have been issuable pursuant to the foregoing
subparagraph (ii), which value shall be determined by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent, or (C) distribute a combination of Common Shares, cash
and/or other equity securities having a value equal to the market price of the
shares of the Common Shares which otherwise would have been issuable pursuant
to the foregoing subparagraph (ii), determined in accordance with the
preceding clause (B), upon exercise of the related Rights.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Shares, or securities
convertible into Common Shares at a price per share (or having a conversion
price per share, if a security convertible into Common Shares) less than the
then current per share market price (as defined in Section 11(d)) of the
Common Shares on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Common Shares outstanding on such record date
plus the number of Common Shares which the aggregate offering price of the
total number of shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be
the number of Common Shares outstanding on such record date plus the number of
additional Common Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible);
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the per share par value of the shares
of capital stock of the Company issuable upon exercise of one Right. In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Common Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Common 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 assets
(other than a regular periodic cash dividend, a dividend payable in Common
Shares or other distribution referred to in Section 11(a) hereof) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the then
current per share market price of the Common Shares 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) of the portion
of such assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Common Share and the
denominator of which shall be such current per share market price of the
Common Shares; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the per share 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 which would
then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per share
market price" of a Common Share on any date shall be deemed to be the average
of the daily closing prices per share of a Common Share for the 30 consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the current per share market price of a Common Share is determined
during a period following the announcement by the Company of (A) a dividend or
distribution on the Common Shares, payable in Common Shares or securities
convertible into Common Shares, or (B) any subdivision, combination or
reclassification of the Common Shares, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per share of a
Common Share. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported 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 Common Shares 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 Common Shares are listed or admitted to trading or, if
Common Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date Common
Shares are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market
in Common Shares, selected by the Board of Directors of the Company. If on
any such date no market-maker is making a market in Common Shares, the fair
value of Common Shares on such date as determined in good faith by the Board
of Directors of the Company shall be used, whose determination shall be
described in a statement filed with the Rights Agent. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
Common Shares are listed or admitted to trading is open for the transaction of
business or, if Common Shares are not listed or admitted to trading on any
national securities exchange, a Business Day. If Common Shares are not
publicly held or so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one ten-thousandth of a share as the case may
be.
(f) If as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Common 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 Common Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Common Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder to the Purchase Price applicable thereto shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
Common Shares or other capital stock purchasable from time to time hereunder
upon exercise of such Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each related Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, the number of Common
Shares (calculated to the nearest one ten-thousandth of a share) obtained by
(i) multiplying (x) the number of shares covered by such Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such Purchase Price adjustment and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such Purchase Price adjustment.
(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 Common Shares purchasable upon the exercise of a
Right. Each of such Rights outstanding after such adjustment of the number of
such Rights shall be exercisable for the number of Common Shares for which
such Right was exercisable immediately prior to such adjustment. Each such
Right held of record prior to such adjustment of the number of Rights shall
become that number of such Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of such Purchase Price by the Purchase Price in effect
immediately after such adjustment. The Company shall make a public
announcement of its election to adjust the number of Rights indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of such Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of record of
such Right Certificates on such record date 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 such Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Common Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price and the number of Common Shares which were expressed in such
Right Certificates theretofore issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common Shares issuable
upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Common Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any related Right exercised after such record date of
the Common Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Common 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 prior to 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 it in its sole discretion shall determine to be advisable in
order that (i) any consolidation or subdivision of the Common Shares, (ii)
issuance wholly for cash of any Common Shares at less than the current market
price, (iii) issuance wholly for cash of Common Shares or securities which by
their terms are convertible into or exchangeable for Common Shares, (iv)
dividends on Common Shares payable in Common Shares or (v) issuance of rights,
options or warrants referred to hereinabove in Section 11(b), hereafter made
by the Company to holders of Common Shares, shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Sections 23 or 27 hereof, take (or permit any
Subsidiary to take) any action the purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the effect of such
action is to, materially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights.
Section 12 - Certificate of Adjustment. Whenever an adjustment is made as
------------ -------------------------
provided in Sections 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) file with the Rights Agent and with each
transfer agent for the Common Shares a copy of such certificate and, (c)
include a brief summary thereof in the next quarterly or current report filed
pursuant to the Exchange Act by the Company, and, following the Distribution
Date, mail such summary to each holder of a Right Certificate in accordance
with Section 25 hereof.
Section 13 - Consolidation, Merger or Sale or Transfer of Assets or
-------------- ------------------------------------------------------
Earning Power.
---------------
(a) In the event that, on or following the Distribution Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into any
other Person, (y) the Company shall consolidate with, or merge with, any other
Person, and the Company shall be the continuing or surviving corporation of
such consolidation or merger (other than, in a case of any transaction
described in (x) or (y), a merger or consolidation which would result in all
of the securities generally entitled to vote in the election of directors
("voting securities") of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into securities of the surviving entity) all of the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation and the holders of such securities not having changed as a
result of such merger or consolidation), 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 more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person (other than the
Company or any Subsidiary of the Company in one or more transactions each of
which does not violate Section 11(n) hereof), then, and in each such case
(except as provided in Section 13(d) hereof), proper provision shall be made
so that (i) each holder of a Right, except as provided in Section 11(a)
hereof, shall thereafter have the right to receive, upon the exercise thereof
at a price equal to the then current Purchase Price (without giving effect to
any adjustment to such Purchase Price pursuant to Section 11(a(ii)) multiplied
by the number of Common Shares for which such Right is then exercisable, in
accordance with the terms of this Rights Agreement, such number of freely
tradable Common Shares of the Principal Party, not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall equal
the result obtained by (A) multiplying the then current Purchase Price
(without giving effect to any adjustment to such Purchase Price pursuant to
Section 11(a(ii)) by the number of Common Shares for which such Right is then
exercisable and dividing that product by (B) 50% of the then current per share
market price of the Common Shares of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Rights Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of an event described in this Section 13; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of
a sufficient number of its Common Shares in accordance with Section 9 hereof)
in connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise
of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
merger or consolidation, and if no securities are so issued, the Person that
is the other party to such merger or consolidation (including, if applicable,
the Company if it is the surviving corporation); 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 earnings power transferred pursuant to such
transaction or transactions; provided, however, that in any of the foregoing
cases, (1) if the Common Shares of such Person are not at such time and have
not been continuously over the preceding twelve (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; (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; and (3) in case
such Person is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint ventures as if such party
were a "Subsidiary" of both or all of such joint ventures and the Principal
Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
its authorized Common Shares which have not been issued or reserved for
issuance 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
consolidation, merger, sale or transfer mentioned in paragraph (a) of this
Section 13, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under the Securities
Act of 1933, as amended, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and will 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 such Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial statements for
the Principal Party which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers. In the event that the events described in this
Section 13 shall occur at any time after the occurrence of the events
described in Section 11(a)(ii), the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (I) such transaction is consummated with a
Person or Persons who acquired Common Shares pursuant to a Permitted Offer (or
a wholly owned subsidiary of any such Person or Persons), (ii) the price per
share of the Common Shares offered in such transaction is not less than the
price per share of Common Shares whose shares were purchased pursuant to such
tender offer or exchange offer and (iii) the form of consideration being
offered to the remaining holders of shares of Common Shares pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14 - Fractional Rights and Fractional Shares.
-------------- -------------------------------------------
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of such
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, 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 such Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in such 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 such Rights on such date
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,
shall be used.
(b) The Company shall not be required to issue fractions of Common Shares
upon (i) exercise of the Rights or exchange of the Rights for Common Shares
pursuant to Section 24 of this Rights Agreement, or to distribute
certificates, other documents or book-entries that evidence fractional shares
of such securities. Fractions of Common Shares may, at the election of the
Company, be evidenced by depository 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 the rights, privileges and preferences to which they are entitled
as beneficial owners of the Common Shares represented by such depositary
receipts. In lieu of fractional Common Shares or depositary receipts, 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 Common Share. For the
purposes of this Section 14(b), the current market value of a Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) The holder of a Right by the acceptance of such Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15 - Rights of Action. All rights of action in respect of this
-------------- ----------------
Rights Agreement, excepting the rights of action given to the Rights Agent
--
under Section 18 hereof, are vested in the respective registered holders of
--
the Right Certificates (and, prior to the Distribution Date, the registered
--
holders of the Common Shares); and any registered holder of any Right
--
Certificate (or, prior to the Distribution Date, of the Common Shares),
--
without the consent of the Rights Agent or of the holder of any other Right
--
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
--
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and in
this Rights 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 Rights Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Rights Agreement.
Section 16 - Agreement of Right Holders. Every holder of a Right, by
-------------- --------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
----
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated certificates for Common Shares ) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the associated
certificates for Common Shares 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; and
(d) notwithstanding anything in this Rights Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Rights
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; provided, however, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon
as possible.
Section 17 - Right Certificate Holder Not Deemed a Stockholder. No
-------------- -------------------------------------------------
holder, as such, of any Right Certificate shall be entitled to vote, receive
------
dividends or be deemed for any purpose the holder of the Common Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), 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 hereof.
Section 18 - Concerning the Rights Agent. The Company agrees to pay to
-------------- ---------------------------
the Rights Agent reasonable compensation for all services rendered by it
--
hereunder and, from time to time, on demand of the Rights Agent, its
--
reasonable expenses and counsel fees and other disbursements incurred in the
--
administration and execution of this Rights Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Rights Agreement,
including the costs and expenses of defending against any claim of liability
in the premises. The indemnity provided for herein shall survive the
expiration of the Rights and the termination of this Rights Agreement.
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 Rights Agreement in reliance upon any Right
Certificate or certificate for the 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 counsel as set forth in
Section 20 hereof.
Section 19 - Merger or Consolidation or Change of Name of Rights
-------------- ---------------------------------------------------
Agent. 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
stock transfer or all or substantially all of the corporate trust business of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the agency created by
this Rights 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 Rights Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.
Section 20 - Duties of Rights Agent. The Rights Agent undertakes
-------------- ----------------------
the duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company or its own in-house counsel), 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 Rights Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer or the Secretary 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
Rights 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 Rights Agreement or in the
Right Certificates (except its countersignature on such Rights Certificates)
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 Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights 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) hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 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 hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Common Shares to be issued pursuant to this Rights Agreement or any Right
Certificate or as to whether any Common Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
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 by it in
good faith in accordance with instructions of any such officer or for any
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 may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent 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.
Section 21 - Change of Rights Agent. The Rights Agent or any successor
-------------- ----------------------
Rights Agent may resign and be discharged from its duties under this Rights
--
Agreement upon 30 days' notice in writing mailed to the Company and to each
--
transfer agent of the Common Shares by registered or certified mail, and 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 by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If
the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States
or of any state of the United States, in good standing, which 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 which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $25 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
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and mail
a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22 - Issuance of New Right Certificates. Notwithstanding any of
-------------- ----------------------------------
the provisions of this Rights 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 Rights Agreement.
In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date, the Company (a) shall with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) the Company shall not be obligated to issue any
such Right Certificates if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23 - Redemption.
-------------- ----------
(a) The Board of Directors of the Company may, at its option, at any
time prior to such time as any Person becomes an Acquiring Person, redeem all
but not less than all of the then outstanding Rights at an initial redemption
price of $.01 per Right ("Redemption Price"). The Redemption Price shall be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof. The redemption of the Rights by
the Board of Directors may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (b) 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. The Company shall
promptly give public notice of any such redemption; provided, however, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights, the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption 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 other than that specifically set
forth in this Section 23 or in Section 24 hereof, and other than in connection
with the purchase of Common Shares prior to the Distribution Date.
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) hereof) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan or any
trust agreement entered into by the Company to secure benefits payable under
any employee benefit plan of the Company or any Subsidiary of the Company),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of Common Shares representing 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 subsection (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 shall promptly 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 shall promptly 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 and
kind of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights being exchanged (other than Rights
which have become void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of such Rights. (c) In the event that there shall not be
sufficient Common Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exchange of the Rights.
Section 25 - Notice of Certain Events.
-------------- ---------------------------
(a) In case the Company, following the Distribution Date, shall propose
(i) to pay any dividend payable in stock of any class or series to holders of
Common Shares or to make any other distribution to holders of Common Shares
(other than a regular periodic cash dividend), (ii) to offer to holders of
Common Shares rights or warrants to subscribe for or to purchase any
additional Common Shares or any other securities, rights or options, (iii) to
effect any reclassification of Common Shares (other than a reclassification
involving only the subdivision of outstanding Common Shares), (iv) to effect
any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which does not violate Section 11(n) hereof), or (v)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right Certificate,
in accordance with Section 26 hereof, a notice of such proposed action to the
extent feasible, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by holders of Common 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 prior to the record date for determining holders
of Common Shares for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by holders of Common
Shares, whichever shall be the earlier. The failure to give notice required
by this Section 25 or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such action.
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then 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 notice shall describe such event and
the consequences of such event to holders of Rights under Section 11(a)(ii)
Section 26 - Notices. Notices or demands authorized by this Rights
-------------- -------
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:
Agribrands International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights 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:
Continental Stock Transfer & Trust Company
▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Compliance Department
Notices or demands authorized by this Rights 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. Prior to the Distribution
-------------- --------------------------
Date, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Rights Agreement without the
approval of any holders of certificates, other documents or book-entries
representing Common Shares. From and after the Distribution Date, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend
this Rights Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
hereunder or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Rights Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Without limiting the
foregoing, the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Rights Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof from 20% to not less
than the greater of (i) any percentage greater than the largest percentage of
the then outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of
any such plan) together with all Affiliates or Associates of such Person, or
(ii) 10%. Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment, provided that such supplement or amendment does
not adversely affect the rights or obligations of the Rights Agent under
Section 18 or Section 20 of this Rights Agreement. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Shares.
Section 28 - Successors. All the covenants and provisions of this Rights
------------- ----------
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 - Determinations and Actions by the Board of Directors. For
-------------- ----------------------------------------------------
all purposes of this Rights Agreement, any calculation of the number of Common
--
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of
which any Person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Rights Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including a determination to redeem or not redeem the Rights
or to amend the Rights Agreement or a determination that an adjustment to the
Redemption Price or Exchange Ratio is or is not appropriate). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board to any liability
to the holders of the Rights.
Section 30 - Benefits of This Rights Agreement. Nothing in this Rights
-------------- ---------------------------------
Agreement shall be construed to give to any person or corporation other than
--
the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Rights Agreement; but
this Rights Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares).
Section 31 - Severability. If any term, provision, covenant or
-------------- -------------
restriction of this Rights 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 Rights
----
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 32 - Governing Law. This Rights Agreement and each Right
-------------- --------------
Certificate issued hereunder shall be deemed to be a contract made under the
--------
laws of the State of Missouri and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33 - Counterparts. This Rights 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 34 - Descriptive Headings. Descriptive headings of the several
-------------- --------------------
Sections of this Rights Agreement are inserted for convenience only and shall
--
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement
to be duly executed and attested, all as of the day and year first above
written.
Attest: AGRIBRANDS INTERNATIONAL, INC.
Name: Name:
Title: Title:
Attest:
Name:
Name: Title:
Title:
EXHIBIT A
FORM OF RIGHT CERTIFICATE
Certificate No. R-______ ______ Rights
NOT EXERCISABLE AFTER MARCH 31, 2008 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
AGRIBRANDS INTERNATIONAL, INC.
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 March 31, 1998 (the "Rights Agreement"),
between AGRIBRANDS INTERNATIONAL, INC., a Missouri corporation (the "Company")
and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York banking corporation
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 P.M., New York time, on March 31, 2008, at the principal office of the
Rights Agent, or at the office of its successor as Rights Agent, one fully
paid non-assessable share of Agribrands International, Inc. Common Stock, par
value $.01 per share (the "Stock"), at a purchase price of $_____ per share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number
of Rights evidenced by this Right Certificate (and the number of shares of
Stock which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of March
31, 1998, (the "Record Date") based on the shares of Stock of the Company as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of shares of Stock which 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.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of shares of
Stock as the Rights evidenced by the Right Certificate or Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Certificates for
the number of whole Rights not exercised. Subject to the provisions of the
Rights Agreement, the Rights evidenced by this Right Certificate (i) may be
redeemed by the Company at its option at a redemption price of $.01 per Right
or (ii) may be exchanged in whole or in part for shares of Stock.
No fractional shares of Stock will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the shares of Stock or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
Witness the facsimile signature of the proper officers of the Company and its
corporate seal.
Attest: AGRIBRANDS INTERNATIONAL, INC.
Name: Name:
Title: Title:
Dated:
Authorized Officer
[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 must conform in all respects to name of holder as specified on the
face of this Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a member or a participant in the
Securities Transfer Agent Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program.
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: , __
Signature
(Signature must conform in all respects to name
of holder as specified on the face of this Right Certificate)
FORM OF ELECTION TO PURCHASE
--------------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To Agribrands International, Inc.:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the shares of Common Stock
issuable upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
Name:
Address:
Social security
or taxpayer identification
number:
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:
Name:
Address:
Social security
or taxpayer identification
number:
Dated: , ___
Signature
(Signature must conform in all respects to name
of holder as specified on the face of this Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a member or a participant in the
Securities Transfer Agent Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program.
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(3) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , 19___
---
Signature
(Signature must conform in all respects to name
of holder as specified on the face of this Right Certificate)
NOTICE
------
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the form of
Assignment or the form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored as described in Section
7(e) of the Rights Agreement.
Exhibit B
SUMMARY OF RIGHTS TO
PURCHASE COMMON SHARES
Effective as of __________, the Board of Directors of Agribrands
International, Inc. (the "Company") adopted a Rights Agreement (the "Rights
Agreement") and authorized and declared a dividend of one common share
purchase right (a "Right") for each outstanding share of common stock, par
value $.01 per share of the Company (the "Common Shares"). The dividend is
payable on March 31, 1998, to the shareholders of record on that date (the
"Record Date"), and with respect to Common Shares issued thereafter until the
Distribution Date (as hereinafter defined) or the expiration or earlier
redemption or exchange of the Rights. Except as set forth below, each Right
entitles the registered holder to purchase from the Company, at any time after
the Distribution Date one Common Share at a price per share of $_____, subject
to adjustment (the "Purchase Price"). The description and terms of the Rights
are as set forth in the Rights Agreement.
Initially the Rights will be attached to all certificates, other documents or
book-entries representing Common Shares than outstanding, and no separate
Right Certificates will be distributed. The Rights will separate from the
Common Shares upon the earlier to occur of (i) 10 business days after the
public announcement of a person's or group of affiliated or associated
persons' having acquired beneficial ownership of 20% or more of the
outstanding Common Shares (such person or group being hereinafter referred to
as an "Acquiring Person"); or (ii) 10 business days (or such later date as the
Board may determine) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in a person or group's becoming an Acquiring Person (the earlier
of such dates being called the "Distribution Date"). An Acquiring Person does
not include the Company, any subsidiary of the Company, any employee benefit
plan of the Company or any subsidiary of the Company or certain "grandfathered
persons" (being the members of the Company's Board of Directors at the time of
the execution of the Rights Agreement together with their immediate families,
for so long as they remain on the Board of Directors, and provided that, after
they are no longer members of the Board of Directors, they do not acquire any
more Common Shares except in certain limited circumstances).
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with, and only with, the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates, other documents or book-entries representing Common
Shares issued after the Record Date upon transfer or new issuance of Common
Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any certificates, other
documents or book-entries for Common Shares outstanding as of the Record Date,
even without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate, other document or book-entry.
As soon 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 to each initial record holder of certain Common Shares issued after
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 March 31, 2008 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
In the event that any person becomes an Acquiring Person (except pursuant to a
tender or exchange offer which is for all outstanding Common Shares at a price
and on terms which a majority of the members of the Board of Directors who are
not officers of the Company and who are not (or would not be, if the offer
were consummated) Acquiring Persons or affiliates, associates, nominees or
representatives of an Acquiring Person determines to be adequate and in the
best interests of the Company, its stockholders and other relevant
constituencies, other than such Acquiring Person, its affiliates and
associates) determines to be adequate and in the best interests of the
Company, its stockholders and other relevant constituencies, other than such
Acquiring Person, its affiliates and associates (a "Permitted Offer")), each
holder of a Right will thereafter have the right (the "Flip-In Right") to
acquire a Common Share for a purchase price equal to 33 1/3% of the then
current market price. Notwithstanding the foregoing, all Rights that are, or
were, beneficially owned by any Acquiring Person or any affiliate or associate
thereof will be null and void and not exercisable.
In the event that, at any time following the Distribution Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding Common Shares immediately prior to
the consummation of the transaction are not the holders of all of the
surviving corporation's voting power, or (ii) more than 50% of the Company's
assets or earning power is sold or transferred, then each holder of a Right
(except Rights which have previously been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise
and payment of the Purchase Price, common shares of the acquiring company
having a value equal to two times the Purchase Price. If a transaction would
otherwise result in a holder's having a Flip-In as well as a Flip-Over Right,
then only the Flip-Over Right will be exercisable; if a transaction results in
a holder's having a Flip- Over Right subsequent to a transaction resulting in
a holder's having a Flip-In Right, a holder will have Flip-Over Rights only to
the extent such holder's Flip-In Rights have not been exercised.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of 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 Common
Shares, (ii) upon the grant to holders of Common Shares of certain rights or
warrants to subscribe for or purchase Common Shares at a price, or securities
convertible into Common Shares with a conversion price, less than the then
current market price of Common Shares, or (iii) upon the distribution to
holders of Common Shares of evidences of indebtedness or assets (excluding
regular periodic cash dividends paid out of earnings or retained earnings or
dividends payable in Common Shares) or of subscription rights or warrants
(other than those referred to above). However, no adjustment in the Purchase
Price will be required until cumulative adjustments require an adjustment of
at least 1%.
No fractional Common Shares will be issued and in lieu thereof, an adjustment
in cash will be made based on the market price of Common Shares on the last
trading day prior to the date of exercise.
At any time prior to the time a person 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 $.01 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
At any time after any person becomes an Acquiring Person and prior to the
acquisition by such person or group of Common Shares representing 50% or more
of the then outstanding Common Shares, the Board of Directors of the Company
may exchange the Rights (other than Rights which have become null and void),
in whole or in part, at an exchange ratio of one Common Share per Right
(subject to adjustment).
All of the provisions of the Rights Agreement may be amended prior to the
Distribution Date by the Board of Directors of the Company for any reason it
deems appropriate. Prior to the Distribution Date, the Board is also
authorized, as it deems appropriate, to lower the thresholds for distribution
and Flip-In Rights to not less than the greater of (i) any percentage greater
than the largest percentage then held by any shareholder, or (ii) 10%. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board in order to cure any ambiguity, defect or inconsistency, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or, subject to certain
limitations, to shorten or lengthen any time period under the Rights
Agreement.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company, including, without limitation, the right to
vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders of the Company, shareholders may, depending upon
the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 10 filed with the Securities and Exchange Commission. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.