SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
WALGREEN CO.
(Exact name of registrant as specified in its charter)
Illinois 36-1924025
(State of incorporation) (IRS Employer Identification No.)
200 Wilmot Road
Deerfield, Illinois 60015
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Share Purchase Rights Chicago Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
1
Item 1. Description of Securities To Be Registered.
On July 10, 1996, the Board of Directors of Wal-
green Co. (the "Company") declared a dividend of one pre-
ferred share purchase right (a "Right") for each outstanding
share of common stock, par value $.3125 per share (the "Com-
mon Shares"), of the Company. The dividend is payable on
August 21, 1996 (the "Record Date") to the stockholders of
record on that date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a
share of Junior Participating Preferred Stock, Series A, par
value $.25 per share (the "Preferred Shares"), of the Com-
pany at a price of $150 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the
Company and Harris Trust and Savings Bank, as Rights Agent
(the "Rights Agent").
The Rights replace preferred share purchase rights
which are currently attached to Common Shares (the "Old
Rights"), which expire on August 21, 1996. The Old Rights
were issued pursuant to a Rights Agreement, dated as of July
9, 1986, and amended as of October 18, 1988, between the
Company and the Rights Agent (the "Old Rights Plan").
Subsequent to August 21, 1996, the Old Rights Plan will be
of no effect, and no rights will be outstanding under it.
Until the earlier to occur of (i) 10 days
following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person")
have acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such
later date as may be determined by action of the Board of
Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person
or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate with a copy of a
2
summary of rights (the "Summary of Rights") attached
thereto.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), 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 issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incor-
porating the Rights Agreement by reference. Until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even
without such notation or a copy of the Summary of Rights
being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by
such certificate. 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 such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribu-
tion Date. The Rights will expire on August 21, 2006 (the
"Final Expiration Date"), unless the Final Expiration Date
is extended or unless the Rights are earlier redeemed or ex-
changed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Pre-
ferred Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time
to time to prevent dilution.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend
payment of $.0625 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per
Common Share. In the event of liquidation, the holders of
the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $25 per share but will
be entitled to an aggregate payment of 100 times the payment
made per Common Share. Each Preferred Share will have 1
vote, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction
3
in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 100 times the amount received
per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares'
dividend and liquidation rights, the value of the one one-
hundredth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right,
that number of shares of common stock of the acquiring
company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares,
the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Com-
pany, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the
4
market price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to the acquisition by a person
or group of affiliated or associated persons of beneficial
ownership of 15% or more of the outstanding Common Shares,
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 with such condi-
tions 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.
The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the
holders of the Rights, including an amendment to lower
certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage
of the outstanding Common Shares then known to the Company
to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that
from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person
no such amendment may adversely affect the interests of the
holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to re-
ceive dividends.
The Rights have certain anti-takeover effects.
The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company on terms not
approved by the Company's Board of Directors. The Rights
should not interfere with any merger or other business
combination approved by the Board of Directors since the
Rights may be redeemed by the Company at the Redemption
Price prior to the time that a person or group has acquired
beneficial ownership of 15% or more of the Common Shares.
The Rights Agreement and the press release an-
nouncing the declaration of the Rights are attached hereto
as exhibits and are incorporated herein by reference. The
5
foregoing description of the Rights is qualified in its
entirety by reference to such exhibits.
Item 2. Exhibits.
1. Rights Agreement, dated as of July 10,
1996, between Walgreen Co. and Harris
Trust and Savings Bank, including the
form of Right Certificate as Exhibit A
and the Summary of Rights to Purchase
Preferred Shares as Exhibit B.
2. Press Release, dated July 10, 1996 (in-
corporated by reference to Exhibit 2 to the
Company's Current Report on Form 8-K, filed July
11, 1996 (File No. 1-604))
6
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: July 11, 1996
WALGREEN CO.
By Julian A. Oettinger_______
Julian A. Oettinger
Vice President, Secretary
and General Counsel
7
EXHIBIT LIST
Page No.
1. Rights Agreement, dated as of July 10,
1996, between Walgreen Co. and Harris
Trust and Savings Bank, including the
form of Right Certificate as Exhibit A
and the Summary of Rights to Purchase
Preferred Shares as Exhibit B.
2. Press Release, dated July 10, 1996 (in-
corporated by reference to Exhibit 2 to
the Company's Current Report on Form
8-K, filed July 11, 1996 (File No. 1-
604))
8
___________________________________________________________________
RIGHTS AGREEMENT
__________
WALGREEN CO.
and
HARRIS TRUST AND SAVINGS BANK,
Rights Agent
_____________
Dated as of July 10, 1996
___________________________________________________________________
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 7
Section 3. Issue of Right Certificates 7
Section 4. Form of Right Certificates 10
Section 5. Countersignature and Registration 11
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates 12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 14
Section 8. Cancellation and Destruction of
Right Certificates 16
Section 9. Availability of Preferred Shares 17
Section 10. Preferred Shares Record Date 18
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights 19
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares 33
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 33
Section 14. Fractional Rights and Fractional Shares 36
Section 15. Rights of Action 38
Section 16. Agreement of Right Holders 39
Section 17. Right Certificate Holder Not Deemed a
Stockholder 40
Section 18. Concerning the Rights Agent 41
Section 19. Merger or Consolidation or Change of
Name of Rights Agent 42
Section 20. Duties of Rights Agent 43
Section 21. Change of Rights Agent 48
Section 22. Issuance of New Right Certificates 50
Section 23. Redemption 50
Section 24. Exchange 51
Section 25. Notice of Certain Events 54
Section 26. Notices 56
Section 27. Supplements and Amendments 57
Section 28. Successors 58
Section 29. Benefits of this Agreement 58
Section 30. Severability 58
Section 31. Governing Law 59
Section 32. Counterparts 59
Section 33. Descriptive Headings 59
Signatures 60
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Preferred
Shares
Agreement, dated as of July 10, 1996, between Wal-
green Co., an Illinois corporation (the "Company"), and Harris
Trust and Savings Bank, an Illinois banking corporation (the
"Rights Agent").
The Board of Directors of the Company has authorized
and declared a dividend of one preferred share purchase right
(a "Right") for each Common Share (as hereinafter defined) of
the Company outstanding on August 21, 1996 (the "Record
Date"), each Right representing the right to purchase one one-
hundredth of a Preferred Share (as hereinafter defined), upon
the terms and subject to the conditions herein set forth, and
has further authorized and directed the issuance of one Right
with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final
Expiration Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings indi-
cated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together with
all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 15% or more of the Common
Shares of the Company then outstanding, but shall not include
the Company, any Subsidiary (as such term is hereinafter de-
fined) 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. Notwithstanding the foregoing, no Person shall become
an "Acquiring Person" as the result of an acquisition of
Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of
15% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the
Company, then such Person shall be deemed to be an "Acquiring
Person". Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person", as
defined pursuant to the foregoing provisions of this paragraph
(a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares
so that such Person would no longer be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the re-
spective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), as in effect on
the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner"
of and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Af-
filiates or Associates beneficially owns, directly or in-
directly;
(ii) which such Person or any of such Person's Af-
filiates 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, ar-
rangement or understanding (other than customary agree-
ments 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 these 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 indi-
rectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agree-
ment, 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 Ben-
eficial Ownership to the contrary, the phrase "then outstand-
ing," when used with reference to a Person's Beneficial Owner-
ship 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 out-
standing which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
Illinois are authorized or obligated by law or executive order
to close.
(e) "Close of business" on any given date shall
mean 5:00 P.M., Chicago time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00
P.M., Chicago time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value
$.3125 per share, of the Company. "Common Shares" when used
with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(i) "Person" shall mean any individual, firm,
corporation or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(j) "Preferred Shares" shall mean shares of Junior
Participating Preferred Stock, Series A, par value $.25 per
share, of the Company having the rights and preferences set
forth in the statement of resolutions with respect to such
series of preferred stock of the Company.
(k) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.
(l) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(m) "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.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for
the Company and the holders of the Rights (who, in accordance
with Section 3 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. In no event shall the Rights Agent be liable for,
or have any duty to supervise, any co-Rights Agent.
Section 3. Issue of Right Certificates. (a) Until
the earlier of (i) the tenth day after the Shares Acquisition
Date or (ii) the tenth business day (or such later date as may
be determined by action of the Board of Directors prior to
such time as any Person becomes an Acquiring Person) after the
date of the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of
any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such
plan) to commence, a tender or exchange offer the consummation
of which would result in any Person becoming the Beneficial
Owner of Common Shares aggregating 15% or more of the then
outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of
the Rights; the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be
Right Certificates) and not by separate Right Certificates,
and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common
Shares. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-
class, insured, 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, in substantially the form of
Exhibit A hereto (a "Right Certificate"), evidencing one Right
for each Common Share so held. As of the Distribution Date,
the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preferred Shares, in substantially the form
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. With
respect to certificates for Common Shares outstanding as of
the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of
the holders thereof together with a copy of the Summary of
Rights attached thereto. 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 on the Record Date, with or without a copy
of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of this paragraph (c))
after the Record Date but prior to the earliest of the Distri-
bution Date, the Redemption Date or the Final Expiration Date
shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a
Rights Agreement between Walgreen Co. and Harris
Trust and Savings Bank, dated as of July 10, 1996
(the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy
of which is on file at the principal executive
offices of Walgreen Co. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Walgreen Co. will mail to the holder
of this certificate a copy of the Rights Agreement
without charge after receipt of a written request
therefor. Under certain circumstances, as set forth
in the Rights Agreement, Rights issued to any Person
who becomes an Acquiring Person (as defined in the
Rights Agreement) 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 with the Common Shares
represented thereby. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights as-
sociated with the Common Shares which are no longer outstand-
ing.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof)
shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such leg-
ends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the pro-
visions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of 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 shall entitle the holders
thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per
one one-hundredth of a Preferred Share set forth therein (the
"Purchase Price"), but the number of such one one-hundredths
of a Preferred Share and the Purchase Price shall be subject
to adjustment as provided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer,
either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless counter-
signed. 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 Com-
pany by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Com-
pany 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, 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 Ex-
change of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Sec-
tion 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 ex-
changed pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to pur-
chase a like number of one one-hundredths of a Preferred Share
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 of the
Rights Agent. 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) 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 of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on August
21, 2006 (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 one one-hundredth
of a Preferred Share purchasable pursuant to the exercise of a
Right shall initially be $150, and shall be subject to adjust-
ment from time to time as provided in Section 11 or 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 represent-
ing exercisable Rights, with the form of election to purchase
duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check or money order payable to the
order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent
depositary receipts representing such number of one one-
hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby directs the
depositary agent to comply with such request, (ii) when ap-
propriate, 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 certifi-
cates or depositary receipts, cause the same to be delivered
to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be
designated by such holder and (iv) when 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 Cer-
tificate 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.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the pur-
pose 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 can-
celled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the
provisions of this 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 cancelled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such
cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Availability of Preferred Shares. The
Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its treasury,
the number of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding Rights in
accordance with Section 7. The Company covenants and agrees
that it will take all such action as may be necessary to
ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully
paid and nonassessable shares.
The Company further 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
Preferred 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 depositary receipts for the
Preferred Shares in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares upon the exercise of
any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each
person in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares transfer books of the
Company are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any
rights of a holder of Preferred Shares for which the Rights
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 of
Shares or Number of Rights. The Purchase Price, the number of
Preferred Shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide
the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred 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 Right be less than the aggre-
gate par value of the shares of capital stock of the Company
issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person, each holder of a
Right shall thereafter have a right to receive, upon exercise
thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Company as shall
equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the then current per share
market price of the Company's Common Shares (determined
pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall
become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by
the Rights.
From and after the occurrence of such event, 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 void and any holder of such Rights
shall thereafter have no right to exercise such Rights under
any provision of this 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 an Acquiring Person
whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but un-
issued to permit the exercise in full of the Rights in accord-
ance with the foregoing subparagraph (ii), the Company shall
take all such action as may be necessary to authorize addi-
tional Common Shares for issuance upon exercise of the Rights.
In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Preferred
Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number
or fraction is equal to the current per share market price of
one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or
having a conversion price per share, if a security convertible
into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred
Shares (as defined in Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number
of Preferred Shares and/or equivalent preferred shares so to
be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at
such current market price and the denominator of which shall
be the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise
of one Right. 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. Preferred Shares owned by or
held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such ad-
justment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of the Preferred
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 quarterly cash
dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then
current per share market price of the Preferred 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) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market
price of the Preferred Shares; provided, however, that in no
event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares
of capital stock of the Company to be issued upon exercise of
one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereun-
der, the "current per share market price" of any security (a
"Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trad-
ing Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that
the current per share market price of the Security is deter-
mined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Se-
curity payable in shares of such Security or securities con-
vertible into such shares, or (B) any subdivision, combination
or reclassification of such Security and prior to the expira-
tion of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivi-
sion, combination or reclassification, then, and in each such
case, the current per share market price shall be
appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Security is not listed
or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Security is listed
or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Security is
not quoted by any such organization, the average of the clos-
ing bid and asked prices as furnished by a professional market
maker making a market in the Security selected by the Board of
Directors of the Company. The term "Trading Day" shall mean a
day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open
for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares
shall be determined in accordance with the method set forth in
Section 11(d)(i). If the Preferred Shares are not publicly
traded, the "current per share market price" of the Preferred
Shares shall be conclusively deemed to be the current per
share market price of the Common Shares as determined pursuant
to Section 11(d)(i) (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof), multiplied by one hundred. If neither
the Common Shares nor the Preferred Shares are 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) 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, how-
ever, 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 calcula-
tions under this Section 11 shall be made to the nearest cent
or to the nearest one one-millionth of a Preferred Share or
one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred
Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-
hundredths of a share covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjust-
ment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement.
If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section
14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, ex-
ecuted and countersigned in the manner provided for herein and
shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a Pre-
ferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may con-
tinue to express the Purchase Price and the number of one one-
hundredths of a Preferred Share which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth
of the then par value, if any, of the Preferred Shares
issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall re-
quire that an adjustment in the Purchase Price be made effec-
tive as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record
date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver
to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of
the Preferred Shares, issuance wholly for cash of any
Preferred Shares at less than the current market price, issu-
ance wholly for cash of Preferred Shares or securities which
by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in
Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(n) In the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then
in any such case (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchas-
able immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is
the number of Common Shares outstanding immediately after such
event, and (B) each Common Share outstanding immediately after
such event shall have issued with respect to it that number of
Rights which each Common Share outstanding immediately prior
to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as pro-
vided in Section 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 or the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment therein
contained and shall not be obligated or responsible for
calculating any adjustment, nor shall it be deemed to have
knowledge of such adjustment unless and until it shall have
received such certificate from the Company.
Section 13. Consolidation, Merger or Sale or Trans-
fer of Assets or Earning Power. In the event, directly or in-
directly, at any time after a Person has become an Acquiring
Person, (a) the Company shall consolidate with, or merge with
and into, any other Person, (b) any Person shall consolidate
with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of
such merger and, in connection with such merger, all or part
of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company)
or cash or any other property, or (c) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than
the Company or one or more of its wholly-owned Subsidiaries,
then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by
(A) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a 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 other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such issuer; and (iv) such issuer shall take such
steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with Sec-
tion 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. The Company shall not consummate any
such consolidation, merger, sale or transfer unless prior
thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so
providing. The Company shall not enter into any transaction
of the kind referred to in this Section 13 if at the time of
such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits
intended to be afforded by the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional
Shares. (a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right.
For the purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, 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 securi-
ties exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any
such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than frac-
tions which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes
of this Section 14(b), the current market value of a Preferred
Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (ex-
cept as provided above).
Section 15. Rights of Action. All rights of action
in respect of this 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 Agreement.
Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the
Common Shares;
(b) after the Distribution Date, the Right Certifi-
cates 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 Common Shares
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall any-
thing 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 Com-
pany agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it
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 Agreement, including the costs and
expenses of defending against any claim of liability in the
premises. This right of indemnification shall survive the
termination of this Agreement and the removal or resignation
of the Rights Agent. The costs and expenses of enforcing this
right of indemnification shall also be paid by the Company.
The Rights Agent may conclusively rely upon, and
shall be fully protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reli-
ance upon any Right Certificate or certificate for the Pre-
ferred Shares or Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of at-
torney, 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 corpora-
tion succeeding to the stock transfer or corporate trust pow-
ers of the Rights Agent or any successor Rights Agent, shall
be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, that
such corporation would be eligible for appointment as a suc-
cessor Rights Agent under the provisions of Section 21 hereof.
In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, and no im-
plied duties or obligations shall be read into this Agreement
against the Rights Agent, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) Before the Rights Agent acts or refrains from
acting, it may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or de-
sirable 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 conclu-
sively proved and established by, and the Rights Agent shall
be entitled to rely upon, 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 Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any respon-
sibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof
by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be
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 Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such
change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares to
be issued pursuant to this Agreement or any Right Certificate
or as to whether any Preferred Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, ex-
ecute, acknowledge and deliver or cause to be performed, ex-
ecuted, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and di-
rected 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 be-
come pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or ac-
countable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder or in the exercise of its rights if there
shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) The Rights Agent shall not be required to take
notice or be deemed to have notice of any fact, event or
determination (including, without limitation, any dates or
events defined in this Agreement or the designation of any
Person as an Acquiring Person, Affiliate, Associate or
Subsidiary) under this Agreement unless and until the Right
Agent shall be specifically notified in writing by the Company
of such fact, event or determination.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be dis-
charged from its duties under this Agreement upon 30 days' no-
tice in writing mailed to the Company and to each transfer
agent of the Common Shares or Preferred Shares by registered
or certified mail, and, at the expense of the Company, 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 or Preferred 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 ap-
pointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be
a corporation organized and doing business under the laws of
the United States or of the State of Illinois (or of any other
state of the United States so long as such corporation is
authorized to do business as a banking institution in the
State of Illinois, in good standing, having an office in the
State of Illinois, 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 $50
million. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsi-
bilities 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 de-
liver 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 or Preferred 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 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 ad-
justment or change in the Purchase Price and the number or
kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Direc-
tors 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 the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). 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 Di-
rectors of the Company ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23, and without any
further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such re-
demption; 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 provi-
sions 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), together with all
Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Di-
rectors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company 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 promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but un-
issued to permit any exchange of Rights as contemplated in ac-
cordance 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. In the event
the Company shall, after good faith effort, be unable to take
all such action as may be necessary to authorize such addi-
tional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of
a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole Common Share. For the purposes of this paragraph (d),
the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events. (a) In case
the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or
to make any other distribution to the holders of its Preferred
Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred 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, (v) to
effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment of dividends in Common
Shares), 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, which shall
specify the record date for the purposes of such stock divi-
dend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of
the Common Shares and/or Preferred Shares, if any such date is
to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case
of any such other action, at least 10 days prior to the date
of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares
and/or Preferred Shares, whichever shall be the earlier.
(b) In case the event 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) hereof.
Section 26. Notices. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or
by the holder of any Right Certificate to or on the Company
shall be sent by registered or certified mail and shall be
deemed given upon receipt, and notices shall be addressed
(until another address is filed in writing with the Rights
Agent) as follows:
Walgreen Co.
200 Wilmot Road
Deerfield, Illinois 60015
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Harris Trust and Savings Bank
311 West Monroe Street, 14th Floor
Chicago, Illinois 60606
Attention: Corporate Trust
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books
of the Company.
Section 27. Supplements and Amendments. The Company
may from time to time supplement or amend this Agreement with-
out the approval of any holders of Right Certificates in order
to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with
any other provisions herein, or to make any other provisions
with respect to the Rights which the Company may deem
necessary or desirable, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any
Person becomes an Acquiring Person, this Agreement shall not
be amended in any manner which would adversely affect the
interests of 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 Agreement to
lower the thresholds set forth in Sections 1(a) and 3(a) to
not less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding Common Shares then known
by the Company to be beneficially owned by any Person (other
than 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) and (ii) 10%.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in
this 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 Agreement; but
this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date,
the Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,
impaired or invalidated.
Section 31. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Illinois 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 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such coun-
terparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and attested, all as of the
day and year first above written.
WALGREEN CO.
Attest:
By By
Title: Title:
Attest: HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
By By
Title: Title:
Exhibit A
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER , 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUB-
JECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
WALGREEN CO.
This certifies that , or regis-
tered 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 July __, 1996 (the "Rights Agreement"),
between Walgreen Co., an Illinois corporation (the "Company"),
and Harris Trust and Savings Bank (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., Chicago time, on August 21, 2006 at the
principal office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid
non-assessable share of Junior Participating Preferred Stock,
Series A, par value $.25 per share (the "Preferred Shares"),
of the Company, at a purchase price of $150 per one one-
hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of
one one-hundredths of a Preferred Share 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
August 21, 1996, based on the Preferred Shares as constituted
at such date. As provided in the Rights Agreement, the Pur-
chase Price and the number of one one-hundredths of a
Preferred Share 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 Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certifi-
cate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be redeemed
by the Company at a redemption price of $.01 per Right or (ii)
may be exchanged in whole or in part for Preferred Shares or
shares of the Company's Common Stock, par value $.3125 per
share.
No fractional Preferred Shares will be issued upon
the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hun-
dredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be en-
titled to vote or receive dividends or be deemed for any pur-
pose the holder of the Preferred Shares or of any other secu-
rities 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 obliga-
tory for any purpose until it shall have been countersigned by
the Rights Agent.
WITNESS the facsimile signature of the proper offic-
ers of the Company and its corporate seal. Dated as of
, 1996.
ATTEST: WALGREEN CO.
By
Countersigned:
HARRIS TRUST AND SAVINGS BANK
By
Authorized Signature
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 in-
terest therein, and does hereby irrevocably constitute and ap-
point Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 1996
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na-
tional Association of Securities Dealers, Inc., or a com-
mercial bank or trust company having an office or correspon-
dent in the United States.
- ------------------------------------------------------------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
Signature
- -------------------------------------------------------------
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: , INC.
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right
Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
_____________________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the
name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
____________________________________________________________
Dated: , 1996
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na-
tional Association of Securities Dealers, Inc., or a com-
mercial bank or trust company having an office or correspon-
dent in the United States.
Form of Reverse Side of Right Certificate -- continued
- -------------------------------------------------------------
The undersigned hereby certifies that the Rights evi-
denced by this Right Certificate are not beneficially owned by
an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
Signature
- -------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in ev-
ery particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the
Form of Assignment or the Form of Election to Purchase, as the
case may be, is not completed, the Company and the Rights
Agent will deem the beneficial owner of the Rights evidenced
by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment or Election to Purchase will
not be honored.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On July 10, 1996, the Board of Directors of Walgreen Co.
(the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, par
value $.3125 per share (the "Common Shares"), of the Company. The
dividend is payable on August 21, 1996 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of
a share of Junior Participating Preferred Stock, Series A, par
value $.25 per share (the "Preferred Shares"), of the Company at a
price of $150 per one one-hundredth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and Harris Trust and
Savings Bank, as Rights Agent (the "Rights Agent").
The Rights replace preferred share purchase rights which
are currently attached to Common Shares (the "Old Rights"), which
expire on August 21, 1996. The Old Rights were issued pursuant to
a Rights Agreement, dated as of July 9, 1986, and amended as of
October 18, 1988, between the Company and the Rights Agent (the
"Old Rights Plan"). Subsequent to August 21, 1996, the Old Rights
Plan will be of no effect, and no rights will be outstanding under
it.
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired beneficial
ownership of 15% or more of the outstanding Common Shares or (ii)
10 business days (or such later date as may be determined by action
of the Board of Directors prior to such time as any person or group
of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 15% or more of the
outstanding Common Shares (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of
the Record Date, by such Common Share certificate with a copy of a
Summary of Rights attached thereto.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the Rights),
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 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 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. 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
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on August 21, 2006 (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.
The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution.
Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to a
minimum preferential quarterly dividend payment of $.0625 per share
but will be entitled to an aggregate dividend of 100 times the
dividend declared per Common Share. In the event of liquidation,
the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $25 per share but will be
entitled to an aggregate payment of 100 times the payment made per
Common Share. Each Preferred Share will have 1 vote, voting
together with the Common Shares. Finally, in the event of any
merger, consolidation or other transaction in which Common Shares
are exchanged, each Preferred Share will be entitled to receive 100
times the amount received per Common Share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend
and liquidation rights, the value of the one one-hundredth interest
in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share.
In the event that the Company is acquired in a merger or
other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, proper provision will be made
so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise
price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right. In the
event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common
Shares having a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an Ac-
quiring Person and prior to the acquisition by such person or group
of 50% or more of the outstanding Common Shares, the Board of
Directors of the Company may exchange the Rights (other than Rights
owned by such person or group which will have become void), in
whole or in part, at an exchange ratio of one Common Share per
Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
Preferred Shares will be issued (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share, which
may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group
of affiliated or associated persons of beneficial ownership of 15%
or more of the outstanding Common Shares, 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 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.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the
Rights, including an amendment to lower certain thresholds
described above to not less than the greater of (i) the sum of
.001% and the largest percentage of the outstanding Common Shares
then known to the Company to be beneficially owned by any person or
group of affiliated or associated persons and (ii) 10%, except that
from and after such time as any person or group of affiliated or
associated persons becomes an Acquiring Person no such amendment
may adversely affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated July 11, 1996. 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.
