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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A/A
Amendment No. 2
Amending Form 8-A Dated August 15, 1988 as amended by
Form 8-A/A Dated January 8, 1996
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
WENDY'S INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Ohio 31-0785108
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
P.O. Box 256
4288 West Dublin-Granville Road
Dublin, Ohio 43017-0256
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class registered each class is registered
- ------------------------------ ------------------------
Preferred Stock Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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This Form 8-A/A amends and supplements the Form 8-A filed by
Wendy's International, Inc. (the "Company") on August 15, 1988, as previously
amended by the Form 8-A/A dated January 8, 1996, with respect to Preferred
Stock Purchase Rights (the "Form 8-A").
Item 1. Description of Securities to be Registered.
Item 1 of the Form 8-A is amended by substituting the
following:
On August 4, 1988, the Board of Directors of Wendy's
International, Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of common stock, without par value (the
"Common Stock" or "Common Shares"), of the Company to stockholders of record at
the close of business on September 2, 1988.
On December 29, 1995, the Company entered into an amendment
to the Rights Agreement, dated as of August 10, 1988 between the Company and
American Stock Transfer and Trust Company (the "Rights Agent") (as successor to
Morgan Shareholder Services Trust Company) to reduce the beneficial ownership
percentage threshold from 20% or more of the shares of Common Stock of the
Company then outstanding to 15% or more of the shares of Common Stock of the
Company then outstanding.
On October 30, 1997, the Board of Directors of the Company
adopted amendments to the Rights Agreement (the "Prior Rights Agreement") dated
as of August 10, 1988, as amended on December 29, 1995, between the Company and
American Stock Transfer and Trust Company pursuant to which the Preferred Stock
Purchase Rights registered under this Form 8-A were issued. The amendments are
incorporated in an Amended and Restated Rights Agreement (the "Rights
Agreement") dated as of December 8, 1997, between the Company and the Rights
Agent, which supersedes the Prior Rights Agreement. A copy of the Rights
Agreement is attached as an exhibit hereto and is hereby incorporated by
reference. The following summary of the Rights is qualified in its entirety by
reference to the Rights Agreement.
As of the date of this Form 8-A/A, there is associated with
each outstanding Common Share one Right which, except as set forth below, when
exercisable, entitles the registered holder to purchase from the Company one
ten-thousandth of a share of a series of preferred stock, designated as Series
A Preferred Stock, par value $1 per share (the "Preferred Stock"), at a price
of $100 per one ten-thousandth of a share (the "Purchase Price"), subject to
adjustment. The terms of the Preferred Stock are summarized below and are set
forth in a Form of Certificate of Amendment to the Articles of Incorporation of
the Company.
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Until the earliest to occur of (i) a public announcement
that, without the prior consent of the Board of Directors of the Company, a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire beneficial ownership of securities
having 15% or more of the voting power of all outstanding voting securities of
the Company (the "Stock Acquisition Date") or (ii) ten business days (unless
such date is extended by the Board of Directors) following the commencement of
(or a public announcement of an intention to make) a tender offer or exchange
offer which would result in any person or group and related persons becoming an
Acquiring Person, without the prior consent of the Board of Directors of the
Company or (iii) twenty business days prior to the date on which a Transaction
(as such term is hereinafter defined) is reasonably expected to become
effective or be consummated (the earliest of such dates being called the
"Distribution Date"), the Rights will be attached to all Common Share
certificates and will be evidenced, with respect to any of the Common Share
certificates outstanding as of December 8, 1997, by such Common Share
certificate. The Rights Agreement provides that, until the Distribution Date,
the Rights will be transferred with and only with Common Share Certificates.
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 the 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, even without such a notation, 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 ("Rights
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date, and the separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on the earliest of (i) August 10, 2008, (ii)
consummation of a merger transaction with a person or group who acquired Common
Shares pursuant to a Permitted Offer (as defined below), and is offering in the
merger the same price per share and form of consideration paid in the Permitted
Offer, or (iii) redemption by the Company as described below.
In the event that an Acquiring Person becomes such other than
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the Company to be
both adequate and otherwise in the best interests of the Company and its
stockholders (a "Permitted Offer"), proper provision shall be made so that each
holder of a Right will for a 60 day period after the later of the date of such
event and the effectiveness of an appropriate registration statement (or such
other longer period set by the Board of Directors) have the right to receive
upon exercise that number
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of shares of Common Stock having a market value of two times the exercise price
of the Right, to the extent available, and then (after all authorized and
unreserved shares of Common Stock have been issued) a common stock equivalent
(such as Preferred Stock or another equity security with at least the same
economic value as the Common Stock) having a market value of two times the
exercise price of the Right, with Common Stock to the extent available being
issued first (such right being called the "Subscription Right"). In the event
that, at any time following the Stock Acquisition Date or, if a Transaction is
proposed, the Distribution Date, the Company is involved in a merger or other
business combination transaction in which the Common Stock is exchanged or
changed, or 50% or more of the Company's assets or earning power are sold (in
one transaction or a series of transactions), proper provision shall be made so
that each holder of a Right shall 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 (or, in the event
there is more than one acquiring company, the acquiring company receiving the
greatest portion of the assets or earning power transferred) which at the time
of such transaction would have a market value of two times the exercise price
of the Rights (such right being called the "Merger Right"). The holder of a
Right will continue to have the Merger Right whether or not such holder
exercises the Subscription Right. Upon the occurrence of any of the events
giving rise to the exercisability of the Subscription Right or the Merger
Right, any Rights that are or were at any time owned by an Acquiring Person
shall become null and void.
The Purchase Price payable, the number of Rights, and the
number of shares of Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Preferred Stock, (ii) upon the grant to
holders of the Preferred Stock of certain rights or warrants to subscribe for
Preferred Stock, certain convertible securities or securities having the same
or more favorable rights, privileges and preferences as the Preferred Stock at
less than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness,
cash (excluding regular quarterly cash dividends out of earnings or retained
earnings), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractions of shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
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The number of outstanding Rights associated with each share
of Common Stock and the voting and economic rights of each ten-thousandth of a
share of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights, the Company
may redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"), which redemption shall be effective upon the action
of the Board of Directors. Additionally, following the Stock Acquisition Date
and the expiration of the period during which the Subscription Right is
exercisable, the Company may redeem the then outstanding Rights in whole, but
not in part, at the Redemption Price provided that such redemption is
incidental to a merger or other business combination transaction or series of
transactions involving the Company in which all holders of Common Shares are
treated alike but not involving an Acquiring Person or Transaction Person (as
hereinafter defined) (or any person who was an Acquiring Person or Transaction
Person (as hereinafter defined)) or its affiliates or associates. Upon the
effective date of the 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.
In the event that a majority of the Board of Directors of the
Company in office following a meeting of stockholders or stockholder action by
written consent are not nominated by the Board of Directors serving immediately
prior to such meeting or action, then for 365 days following such meeting or
action the Rights may not be redeemed or amended if such redemption or
amendment is reasonably likely to facilitate a combination or sale of assets or
earning power (a "Transaction") with a person who (A) either (i) is or will
become an Acquiring Person or (ii) is a party involved in a merger or
consolidation with, or sale of assets by, the Company or affiliate or associate
thereof if the Transaction were to be consummated and (B) who has directly or
indirectly proposed or nominated a member of the Board who is in office at the
time the Transaction is being considered (a "Transaction Person"). The Rights
may not be redeemed or amended thereafter if during such 365 day period the
Company enters into any agreement reasonably likely to facilitate a Transaction
with a Transaction Person and the redemption is reasonably likely to facilitate
a Transaction with a Transaction Person.
The Preferred Stock purchasable upon exercise of the Rights
will be non-redeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock). Each
share of Preferred Stock will have a preferential quarterly dividend in an
amount equal to 10,000 times the dividend declared on each share of Common
Stock, but in no event less than $100.00. In the event
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of liquidation, the holders of Preferred Stock will receive a preferred
liquidation payment equal to the greater of 10,000 times $25 or 10,000 times
the payment made per each share of Common Stock. Each share of Preferred Stock
will have one vote, voting together with the shares of Common Stock. In the
event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each share of Preferred Stock will be entitled to
receive 10,000 times the amount and type of consideration received per share of
Common Stock. The rights of the Preferred Stock as to dividends, liquidation
and voting, and in the event of mergers and consolidations, are protected by
customary anti-dilution provisions. Fractional shares of Preferred Stock will
be issuable; however, the Company may elect to distribute depositary receipts
in lieu of such fractional shares. In lieu of fractional shares other than
fractions that are multiples of one one-hundredth of a share, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
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.
Except as set forth above, the terms of the Rights may be
amended by the Board of Directors of the Company, (i) prior to the Distribution
Date in any manner, and (ii) on or after the Distribution Date or cure any
ambiguity, to correct or supplement any provision of the Rights Agreement which
may be defective or inconsistent with any other provisions, or in any manner
not adversely affecting the interests of the holders of the Rights (including
the interests of any Acquiring Person), or, subject to certain limitations, to
shorten or lengthen any time period under the Rights Agreement.
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company without conditioning the offer on the Rights being redeemed or a
substantial number of Rights being acquired. However, the Rights generally
should not interfere with any merger or other business combination approved by
the Board of Directors because the Rights are redeemable under certain
circumstances.
Attached hereto as Exhibit 1 and incorporated herein by
reference are a copy of the form of Amended and Restated Rights Agreement
between the Company and American Stock Transfer and Trust Company, as Rights
Agent, specifying the terms of the Rights, and the exhibits thereto, as
follows: Exhibit A -- Certificate of Amendment to the Articles of Incorporation
of the Company establishing the Preferred Stock; Exhibit B -- The Form of
Rights Certificate; and Exhibit C -- the Summary of Rights to Purchase
Preferred Stock. The foregoing description of the Rights is qualified by
reference to the Amended and Restated Rights Agreement.
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Item 2. Exhibits.
1. Form of Amended and Restated Rights Agreement, dated
as of December 8, 1997, between Wendy's
International, Inc. and American Stock Transfer and
Trust Company, as Rights Agent, which includes, as
Exhibit A thereto, the Form of Certificate of
Amendment to the Articles of Incorporation of
Wendy's International, Inc. establishing the
Preferred Stock, as Exhibit B thereto, the form of
Rights Certificate and as Exhibit C thereto, the
Summary of Rights to Purchase Preferred Stock.
Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until after a Stock
Acquisition Date (as defined in the Rights
Agreement) or ten days (or such later date as the
Board of Directors of the Company may determine)
after a person commences or announces its intention
to commence an offer if, upon consummation thereof,
such person would become an Acquiring Person (as
defined in the Rights Agreement) or prior to certain
transactions involving the Company.
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, thereto duly
authorized.
Wendy's International, Inc.
By: /s/ FREDERICK R. REED
---------------------------
Name: Frederick R. Reed
Title: Chief Financial Officer,
General Counsel & Secretary
Date: December 8, 1997
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page
- ------- ----------- ----
<S> <C> <C>
1 Form of Amended and Restated Rights Agreement, dated as of 9
December 8, 1997, between Wendy's International, Inc. and
American Stock Transfer and Trust Company, as Rights Agent,
which includes, as Exhibit A thereto, the Form of Certificate
of Amendment to the Articles of Incorporation of Wendy's
International, Inc. establishing the Preferred Stock, as
Exhibit B thereto, the form of Rights Certificate, and, as
Exhibit C thereto, the form of Summary of Rights. Pursuant to
the Rights Agreement, Rights Certificates will not be mailed
until after a Stock Acquisition Date (as defined in the
Rights Agreements) or 10 days (or such later date as the
Board of Directors of the Company may determine) after a
person announces or commences consummation thereof, such
person would become an Acquiring Person (as defined in the
Rights Agreement) or prior to certain transactions involving
the Company.
</TABLE>
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EXHIBIT 1
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WENDY'S INTERNATIONAL, INC.
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY
Rights Agent
--------------------------------------
Amended and Restated Rights Agreement
Dated as of December 8, 1997
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Section Page
1. Certain Definitions..................................................2
2. Appointment of Rights Agent..........................................5
3. Issue of Rights Certificates.........................................6
4. Form of Rights Certificates..........................................8
5. Countersignature and Registration....................................9
6. Transfer, Split Up, Combination and Exchange Certificates: Mutilated,
Destroyed, Lost or Stolen Rights Certificates.......................10
7. Exercise of Rights: Purchase Price: Expiration-Date of Rights.......11
8. Cancellation and Destruction of Rights Certificates.................15
9. Reservation and Availability of Preferred Stock.....................15
10. Preferred Stock Record Date.........................................17
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights..............................................................17
12. Certificate of Adjusted Purchase Price or Number of Shares..........31
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power...............................................................32
14. Additional Covenants................................................36
15. Fractional Rights and Fractional Shares.............................37
16. Rights of Action....................................................39
17. Agreement of Rights Holders.........................................39
18. Rights Certificate Holder Not a Shareholder.........................40
19. Concerning the Rights Agent.........................................41
(i)
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Section Page
20. Merger or Consolidation or Change of Name of Rights Agent...........42
21. Duties of Rights Agent..............................................43
22. Change of Rights Agent..............................................46
23. Issuance of New Rights Certificates.................................47
24. Redemption and Termination..........................................48
25. Notice of Certain Events............................................50
26. Notices.............................................................52
27. Supplements and Amendments..........................................52
28. Determination and Actions by the Board of Directors, etc............54
29. Successors..........................................................55
30. Benefits of this Agreement..........................................55
31. Severability........................................................55
32. Governing Law.......................................................55
33. Counterparts........................................................55
34. Descriptive Headings................................................56
Exhibit A -- Form of Certificate of Amendment to the Articles of Incorporation
of the Company.......................................... A-1
Exhibit B -- Form of Rights Certificate.............................. B-1
Exhibit C -- Form of Summary of Rights............................... C-1
(ii)
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AMENDED AND RESTATED RIGHTS AGREEMENT
This Amended and Restated Rights Agreement, dated as of
December 8, 1997, between Wendy's International, Inc., an Ohio corporation (the
"Company"), and American Stock Transfer and Trust Company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on August 4, 1988, the Board of Directors of the
Company authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each Common Share, without par value, of the Company
(the "Common Stock") outstanding on September 2, 1988 (the "Record Date"), and
contemplated the issuance of one Right (subject to adjustment as provided
herein) (i) for each share of Common Stock of the Company issued between the
Record Date and the earliest of the Distribution Date and the Expiration Date
(as such terms are hereinafter defined) and (ii) for each share of Common Stock
reserved for issuance upon conversion of the Company's then outstanding 7-1/4%
Convertible Subordinated Debentures due 2010 and issued upon conversion of the
Convertible Debentures at any time after the Record Date (whether before or
after the later of the Stock Acquisition Date and the Distribution Date (as
such terms are hereinafter defined)), each Right representing the right to
purchase one ten-thousandth of one Series A Preferred Share of the Company
having the rights, powers and preferences set forth in the Form of Certificate
of Amendment to the Articles of Incorporation of the Company attached hereto as
Exhibit A to the Agreement, dated as of August 10, 1988, as amended on December
29, 1995, between the Company and the Rights Agent (as successor rights agent
to Morgan Shareholder Services Trust Company) (the "Prior Rights Agreement"),
upon the terms and subject to the conditions hereinafter set forth therein (the
"Rights"); and
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WHEREAS, the Board of Directors of the Company has determined
that it is advisable and in the best interests of the Company and its
stockholders to amend and restate in its entirety the Prior Rights Agreement as
set forth herein and the Rights shall henceforth be governed by the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, without the prior approval of the Board of Directors
of the Company, shall be the Beneficial Owner (as such term is hereinafter
defined) of securities representing 15% or more of the shares of Common Stock
then outstanding or who was such a Beneficial Owner at any time after the date
hereof, whether or not such Person continues to be the Beneficial Owner of
securities representing 15% or more of the outstanding shares of Common Stock,
but shall not include (i) the Company, (ii) any subsidiary of the Company (as
such term is hereinafter defined), (iii) any employee benefit plan of the
Company or any of its subsidiaries or (iv) any entity holding securities of the
Company organized, appointed or established by the Company or any of its
subsidiaries for or pursuant to the terms of any such plan or any trustee or
administrator of any such plan.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
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(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly
or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right or
obligation to acquire (whether such right or
obligation is exercisable or effective immediately or
only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or
not in writing) 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 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 (whether or not in
writing); provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this clause (B)
if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy
given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange
Act and (2) is not also then reportable by such person
on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of
such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or
not in
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writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of this
paragraph (c)) or disposing of any securities of the
Company.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the State of New
York 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., New York City time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York City time, on the
next succeeding Business Day.
(f) "Common Stock" shall mean the Common Shares,
without par value, of the Company, except that "Common Stock" when used with
reference to stock issued by any Person other than the Company shall mean the
capital stock with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person or, if such Person is a subsidiary of another Person, of the Person
which ultimately controls such first-mentioned Person and which has issued and
outstanding such capital stock, equity securities or equity interests.
(g) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(h) "Preferred Stock" shall mean the Series A
Preferred Shares, $1.00 par value, of the Company.
(i) "Rights Agreement" shall mean this Agreement,
including as it may hereafter be amended.
(j) "Stock Acquisition Date" shall mean the first date
of public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
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(k) A "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 voting interests is owned, directly or indirectly,
by such Person, or which is otherwise controlled by such Person.
(l) "Transaction" shall mean any merger, consolidation
or sale of assets described in Section 13(a) hereof or any acquisition of
shares of Common Stock of the Company which would result in a Person becoming a
Transaction Person.
(m) "Transaction Person" with respect to a Transaction
shall mean (x) any Person who (i) is or will become an Acquiring Person or a
Principal Party (as such term is defined in Section 13(b) hereof) if the
Transaction were to be consummated and (ii) directly or indirectly proposed or
nominated a director of the Company which director is in office at the time of
consideration of the Transaction (a Person shall be deemed to have indirectly
nominated a director if it has proposed becoming or indicated an intention to
become an Acquiring Person or a Principal Party and a third party proposes,
nominates or appoints a director for the purpose of facilitating a Transaction
with such Person), or (y) an Affiliate or Associate of such a Person.
(n) "Voting Power" shall mean the voting power of all
securities of the Company then outstanding generally entitled to vote for the
election of directors of the Company.
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 (as such term is hereinafter defined) also be the holders of
the Common Stock) 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 the
event the Company appoints one or more Co-Rights
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Agents, the respective duties of the Rights Agents and any Co-Rights Agents
shall be as the Company shall determine.
Section 3. Issue of Rights Certificates.
(a) Until the earliest of (i) the Stock Acquisition
Date, (ii) the tenth Business Day after the date of the commencement of, or
first public announcement of the intent of any Person (other than the Company,
any subsidiary of the Company, or any employee benefit plan of the Company or
any of its subsidiaries or any trustee or administrator of any such plan in its
capacity as such) to commence (which intention to commence remains in effect
for five Business Days after such announcement), a tender or exchange offer
which would result in such Person becoming an Acquiring Person, or (iii) twenty
Business Days prior to the date on which a Transaction is reasonably expected
to become effective or be consummated (including any such date which is after
the date of this Agreement and prior to the issuance of the Rights; the
earliest of such dates being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common Stock shall be
deemed also to be certificates for Rights) and not by separate certificates,
and (y) the Rights (and the right to receive certificates therefor) will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company); provided, however, that if
a tender or exchange offer is terminated prior to the occurrence of the
Distribution Date, then no Distribution Date shall occur as a result of that
tender or exchange offer. As soon as practicable after the Distribution Date,
the Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a certificate for Rights, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one Right for each share of
Common Stock so held. As
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of and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) With respect to certificates for the Common Stock
outstanding as of the date of this Agreement, until the Distribution Date (or
earlier redemption, expiration or termination of the Rights), the Rights will
be evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the Distribution Date (or earlier redemption,
expiration or termination of the Rights), the surrender for transfer of any of
the certificates for the Common Stock outstanding on the Record Date, shall
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. Upon the request of the holder of any shares
of Common Stock or, after the Distribution Date, the holder of any Rights, the
Company shall, at its expense, provide a copy of the Summary of Rights in the
form attached hereto as Exhibit C.
(c) Certificates issued for Common Stock (including,
without limitation, certificates issued upon transfer or exchange of Common
Stock or certificates issued upon conversion of the Company's 5% Convertible
Subordinated Debentures due September 15, 2026 (the "Convertible Debentures")
or the $2.50 Term Convertible Securities, Series A (the "Trust Preferred
Securities") issued by Wendy's Financing I, a statutory business trust created
under the laws of the State of Delaware ("Wendy's Financing")) after the date
of this Agreement, but prior to the earlier of the Distribution Date or the
Expiration Date (as such term is hereinafter defined), shall be deemed also to
be certificates for Rights, and shall have impressed, printed, stamped, written
or otherwise affixed onto them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in an Amended
and Restated Rights Agreement between Wendy's International,
Inc. and American Stock Transfer and Trust Company (the
"Rights Agent") dated as of December 8, 1997 (the "Rights
Agreement"), the terms of which are
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<PAGE> 11
hereby incorporated herein by reference and a copy of which
is on file at the principal offices of Wendy's International,
Inc. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may expire, or may be
evidenced by separate certificates and will no longer be
evidenced by this certificate. Wendy's International, Inc.
will mail to the holder of this certificate a copy of the
Rights Agreement without charge within fifteen days after
receipt of a written request therefor. Under certain
circumstances, Rights issued to Acquiring Persons (as defined
in the Rights Agreement) or certain related persons and any
subsequent holder of such Rights may become null and void
with respect to certain rights set forth in Section 11(a)(ii)
and Section 13(a) of the Rights Agreement.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. If the Company purchases or otherwise acquires shares of Common
Stock prior to the Distribution Date, any Rights associated with such Common
Stock shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Right associated with the shares of Common Stock no
longer outstanding.
(d) Prior to the Expiration Date (as such term is
hereinafter defined) and after the Distribution Date, certificates issued for
Common Stock, upon conversion of the Convertible Debentures of the Company, or
upon conversion of the Trust Preferred Securities of Wendy's Financing shall,
as soon as practicable, be accompanied by one Rights Certificate evidencing one
Right for each share of Common Stock so issued.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase shares and of assignment to be printed on the reverse thereof)
shall each be substantially
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<PAGE> 12
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law 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 11
and Section 23 hereof, the Rights Certificates, whenever distributed, on their
face shall entitle the holders thereof to purchase such number of one
ten-thousandths of a share of Preferred Stock as shall be set forth therein at
the price per one ten-thousandth of a share set forth therein (the "Purchase
Price"), but the number of such shares and the Purchase Price shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 23 hereof that represents Rights beneficially owned by an
Acquiring Person or any Associate or Affiliate thereof and any Rights
Certificate issued at any time upon the transfer of any Rights to such an
Acquiring Person or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate, and any Rights Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain the following legend:
The Rights represented by this Rights Certificate
were issued to a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby are null
and void.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights
Certificate.
Section 5. Countersignature and Registration. The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, President,
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<PAGE> 13
Chief Financial Officer or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights 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 Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights 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 one of its offices, books for registration and transfer
of the Rights Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights Certificates, the number
of Rights evidenced on its face by each of the Rights Certificates and the
certificate number and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates: Mutilated, Destroyed, Lost or Stolen Rights Certificates.
Subject to the provisions of Section 4(b), Section 7(e) and Section 15 hereof,
at any time after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date (as such term is
hereinafter defined), any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights
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<PAGE> 14
Certificate or Rights Certificates, entitling the registered holder to purchase
a like number of shares of Preferred Stock as the Rights Certificate or Rights
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights 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 Rights Certificate or Rights 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 Rights
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 Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and 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 Rights Certificate
if mutilated, the Company will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration-Date of Rights.
(a) The registered holder of any Rights 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 presentation
of the Rights Certificate, with the appropriate 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 ten-thousandth of a share of Preferred Stock (or such other number of
shares or other securities) as to which the Rights are exercised, at or prior
to
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<PAGE> 15
the earlier of (i) the close of business on August 10, 2008 (the "Final
Expiration Date"), or (ii) the time at which the Rights are redeemed as
provided in Section 24 hereof (such earlier time being herein referred to as
the "Expiration Date"). Notwithstanding any other provision of this Agreement,
any Person who prior to the Distribution Date becomes a record holder of shares
of Common Stock (or any Person who after the Record Date (whether before or
after the later of the Stock Acquisition Date and the Distribution Date)
becomes a record holder of shares of Common Stock upon conversion of the
Convertible Debentures of the Company or upon conversion of the Trust Preferred
Securities of Wendy's Financing) may exercise all of the rights of a registered
holder of a Rights Certificate with respect to the Rights associated with such
shares of Common Stock in accordance with and subject to the provisions of this
Agreement, including the provisions of Sections 4(b), 6 and 7(e) hereof, as of
the date such Person becomes a record holder of shares of Common Stock.
(b) Subject to the terms and conditions set forth
herein, when exercisable, each Right shall represent the right to purchase one
ten-thousandth of a share of Preferred Stock. The Purchase Price for each one
ten-thousandth share of Preferred Stock pursuant to the exercise of a Right
shall initially be $100, shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the appropriate 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 (as determined by
the Rights Agent) in cash, or by certified check or money order payable to the
order of the Company, the Rights Agent shall, subject to Section 21(k),
thereupon promptly (i) (A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer agent)
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<PAGE> 16
certificates for the number of shares of Preferred Stock to be purchased, and
the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company, in its sole discretion, shall have
elected to deposit the shares of Preferred Stock issuable upon exercise of the
Rights hereunder into a depositary, requisition from the depositary agent
depositary receipts representing such number of one ten-thousandths of a share
of Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash, if any, to be paid in lieu of
issuance of fractional shares in accordance with Section 15, (iii) promptly
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt promptly deliver such cash to
or upon the order of the registered holder of such Rights Certificate. In the
event that the Company is obligated to issue other securities of the Company,
the Company will make all arrangements necessary so that such other securities
are available for distribution by the Rights Agent, if and when appropriate. In
addition, in the case of an exercise of the Rights by a holder pursuant to
Section 11(a)(ii), the Rights Agent shall return such Rights Certificate to the
registered holder thereof after imprinting, stamping or otherwise indicating
thereon that the rights represented by such Rights Certificate no longer
include the rights provided by Section 11(a)(ii) of the Rights Agreement and if
less than all the Rights represented by such Rights Certificate were so
exercised, the Rights Agent shall indicate on the Rights Certificate the number
of Rights represented thereby which continue to include the rights provided by
Section 11(a)(ii).
(d) In case the registered holder of any Rights
Certificate shall exercise (except pursuant to Section 11(a)(ii)) less than all
the Rights evidenced thereby,
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<PAGE> 17
a new Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the registered
holder of such Rights Certificate or to his duly authorized assigns, subject to
the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the time an Acquiring Person first becomes such, any
Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any Affiliate or Associate thereof) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any Affiliate or Associate thereof) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has a continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in
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<PAGE> 18
this Section 7 unless the certificate contained in the appropriate form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise shall have been properly completed and duly
executed by the registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Rights 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 Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock, or any
authorized and issued shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the occurrence of an
event specified in Section 11, shall so reserve and keep available a sufficient
number of shares of Preferred Stock (and/or other securities) which may be
required to permit the exercise in full of the Rights pursuant to this
Agreement.
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<PAGE> 19
So long as the shares of Preferred Stock (and, after the
occurrence of an event specified in Section 11, any other securities) issuable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock and/or
other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares or other securities (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares or securities.
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 Rights
Certificates or of any certificates for shares of Preferred Stock and/or Common
Stock 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 Rights Certificates to a person other than, or in respect of the
issuance or delivery of the shares of Preferred Stock and/or Common Stock in a
name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for shares of Preferred Stock, and/or Common Stock in a name other
than that of the registered holder upon the exercise of any Rights until such
tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
The Company shall use its best efforts to (i) file, as soon
as practicable following the Distribution Date, a registration statement under
the Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the
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<PAGE> 20
Rights on an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act and the rules and regulations thereunder)
until the date of the expiration of the rights provided by Section 11(a)(ii).
The Company will also take such action as may be appropriate under the blue sky
laws of the various states.
Section 10. Preferred Stock Record Date. Each person in whose
name any certificate for shares of Preferred Stock is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the shares of Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly presented and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of such
presentation and payment is a date upon which the Preferred Stock transfer
books of the Company are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate, as such, shall not be entitled to any rights of
a shareholder of the Company with respect to 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 and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
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<PAGE> 21
(a)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on
the Preferred Stock payable in shares or fractional units of
shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock
into a smaller number of shares or (D) issue any shares of
its capital stock in a reclassification of the Preferred
Stock (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) and in Section 7(e), 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 of units of
one ten-thousandth of a share of Preferred Stock and the
number and kind of shares of capital stock issuable on such
date upon exercise of a Right, shall be proportionately
adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number of
units of one ten-thousandth of a share of Preferred Stock and
the number and kind of shares of capital stock and other
securities which, if such Right had been exercised
immediately prior to such date and at a time when the
Preferred Stock 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 aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one
Right. If an event occurs which would require an adjustment
under both Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in
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<PAGE> 22
addition to, and shall be made prior to any adjustment
required pursuant to Section 11(a)(ii).
(ii) In the event that any Person (other than the
Company, any subsidiary of the Company, any employee benefit
plan of the Company or any of its subsidiaries or any entity
holding securities of the Company organized, appointed or
established by the Company or any of its subsidiaries for or
pursuant to the terms of any such plan or any trustee or
administrator of any such plan acting in such capacity),
alone or together with its Affiliates and Associates, shall
become an Acquiring Person (except pursuant to a tender or
exchange offer for all outstanding shares of Common Stock at
a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the
Company to be both adequate and otherwise in the best
interests of the Company and its shareholders (other than the
Person or an Affiliate or Associate thereof on whose behalf
the offer is being made)(a "Permitted Offer")), then proper
provision shall be made so that each holder of a Right,
except as provided in Section 7(e) hereof, shall, for a
period of 60 days (or such other longer period as may be
established by action or a majority of the Board of
Directors) after the later of the occurrence of any such
event and the effective date of an appropriate registration
statement pursuant to Section 9, have a right to receive,
upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of
shares of Preferred Stock, such number of shares of Common
Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then
number of one ten-thousandths of a share of Preferred Stock
for which a Right is then exercisable and dividing that
product by (y) 50% of the current market price per one share
of Common
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<PAGE> 23
Stock (determined pursuant to Section 11(d)) on the date of
the occurrence of the event set forth in this subparagraph
(ii) (such number of shares being referred to as the "number
of Adjustment Shares"); provided, however, that if the
transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall
apply and no adjustment shall be made pursuant to this
Section 11(a)(ii).
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common
Stock to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) and the
Rights become so exercisable, notwithstanding any other
provision of this Agreement, to the extent necessary and
permitted by applicable law and any agreements in effect on
the date hereof to which it is a party, each Right shall
thereafter represent the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with
the terms of this Agreement, a number of shares, or units of
shares, of (x) Common Stock (up to the maximum number of
shares of Common Stock which may permissibly be issued using
the allocation procedure specified in the second sentence of
Section 11(k)) and (y) preferred stock of the Company,
including, but not limited to Preferred Stock, equal in the
aggregate to the number of Adjustment Shares where the Board
of Directors of the Company shall have deemed such shares or
units, other than the shares of Common Stock, to have at
least the same economic value as the Common Stock (a "common
stock equivalent") (one ten-thousandth of a share of
Preferred Stock shall be deemed to be a common stock
equivalent); provided, however, if there are unavailable
sufficient shares (or fractions of shares) of Common Stock
and/or common stock equivalents, then the Company shall, to
the extent
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<PAGE> 24
permitted by applicable law and any agreements to which it is
a party, take all such action as may be necessary to
authorize additional shares of Common Stock or common stock
equivalents for issuance upon exercise of the Rights,
including the calling of a meeting of shareholders; and
provided, further, that the Company shall issue no common
stock equivalent upon exercise of the Rights until the
Company has first issued all authorized and unreserved shares
of Common Stock; and provided, further, that if the Company
is unable to cause sufficient shares of Common Stock and/or
common stock equivalents to be available for issuance upon
exercise in full of the Rights, then each Right shall
thereafter represent the right to receive the Adjusted Number
of Common Shares upon exercise at the Adjusted Purchase Price
(as such terms are hereinafter defined). As used herein, the
term Adjusted Number of Common Shares shall be equal to that
number of shares (or fractions of shares) of Common Stock
(and/or shares or units of common stock equivalents) equal to
the product of (x) the number of Adjustment Shares and (y) a
fraction, the numerator of which is the number of shares of
Common Stock (and/or shares or units of common stock
equivalents) available for issuance upon exercise of the
Rights and the denominator of which is the aggregate number
of Adjustment Shares otherwise issuable upon exercise in full
of all Rights (assuming there were sufficient shares of
Common Stock available) (such fraction being referred to as
the "Proration Factor"). The Adjusted Purchase Price shall
mean the product of the Purchase Price and the Proration
Factor. The Board of Directors may, but shall not be required
to, establish procedures to allocate the right to receive
Common Stock and common stock equivalents upon exercise of
the Rights among holders of Rights.
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<PAGE> 25
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or shares having the same
or more favorable rights, privileges and preferences as the Preferred Stock
("equivalent preferred stock")) or securities convertible into Preferred Stock
or equivalent preferred stock at a price per share of Preferred Stock or per
share of equivalent preferred stock (or having a conversion price per share, if
a security convertible into Preferred Stock or equivalent preferred stock) less
than the current market price (as defined in Section 11(d)) per share of
Preferred Stock 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 shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number
of additional shares of Preferred Stock and/or equivalent preferred stock 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 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 determined reasonably and with
good faith to the holders of Rights by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent. Shares of Preferred
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<PAGE> 26
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such rights 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) If the Company shall fix a record date for the
making of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable in Preferred
Stock, but including any dividend payable in stock other than Preferred Stock)
or subscription rights or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current
market price (as defined in Section 11(d)) per share of Preferred Stock on such
record date, less the fair market value (as determined reasonably and with good
faith to the holders of Rights by the Board of Directors of the Company, whose
determination shall be described in a statement file with the Rights Agent and
shall be binding on the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants distributable in respect of one share of Preferred Stock and the
denominator of which shall be the current market price per share of the
Preferred Stock; provided, however, that in no event shall the consideration to
be paid upon exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right.
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
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Price shall again be adjusted to be the Purchase Price which would be in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than in Section 11(a)(iii), the "current market price" per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the 30 consecutive Trading 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
Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible into
shares of such Common Stock or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the "current market price" shall be properly adjusted to
take into account ex-dividend trading. 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 shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date
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the shares of Common Stock 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 Common Stock selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined reasonably and
with good faith by the Board of Directors of the Company shall be used and
shall be binding on the Rights Agent. The term, "Trading Day" shall mean a day
on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, a Business Day. If the Common
Stock is not publicly held or not so listed or traded, "current market price"
per share shall mean the fair value per share determined reasonably and with
good faith to the holders of Rights by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current market price" per share (or one ten-thousandth of a
share) of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i)
of this Section 11(d) (other than the last sentence thereof).
If the current market price per share (or one ten-thousandth
of a share) of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not
publicly held or listed or traded in a manner described in
clause (i) of this Section 11(d), the "current market price"
per share of Preferred Stock shall be conclusively deemed to
be an amount equal to 10,000 (as such number may be
appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied
by the current market price per share of the
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Common Stock and the "current market price" per one
ten-thousandth of a share of Preferred Stock shall be equal
to the current market price per share of the Common Stock (as
appropriately adjusted). If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded,
"current market price" per share shall mean the fair value
per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share or one-millionth of a share of Preferred Stock (or any other
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 mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a)
or Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Stock, 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 shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10, 13 and 15 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
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(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
shares of Preferred Stock 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 Section 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 ten-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one
ten-thousandths of a share of Preferred Stock 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 shares of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one ten-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately 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
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the date on which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Rights 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 Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 15 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 Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record
of Rights 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 shares (or fractional units thereof) of
Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value, if any, of the
shares of Preferred Stock, Common Stock or other securities 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 shares of Preferred
Stock, Common Stock or other securities at such adjusted Purchase Price. If
upon any exercise of the Rights, a holder is to receive a
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combination of Common Stock and common stock equivalents, a portion of the
consideration paid upon such exercise, equal to at least the then par value of
a share of Common Stock of the Company, shall be allocated as the payment for
each share of Common Stock of the Company so received.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such record
date the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock 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 to the contrary in this Section 11
notwithstanding, the Board of Directors of 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 Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the current market price, issuance wholly for cash
of shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, stock dividends or issuance
of rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such shareholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate with any other
Person (other than a subsidiary of the Company in a transaction which does not
violate Section 11(o) hereof),
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(ii) merge with or into any other Person (other than a subsidiary of the
Company in a transaction which does not violate Section 11(o) hereof), or (iii)
sell or transfer (or permit any subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its subsidiaries in one or more transactions each of
which does not violate Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or transfer there are any
charter or by-law provisions or any rights, warrants or other instruments or
securities outstanding or agreements in effect or other actions taken, which
would materially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates. The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior
thereto the Company and such other Person shall have executed and delivered to
the Rights Agent a certificate certifying compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any subsidiary to take) any action the purpose of which
is to, or if at the time such action is taken it is reasonably foreseeable that
the effect of such action is to, materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement and prior to the Distribution Date (i) declare or pay a
dividend on the outstanding shares of
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Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, (iii) combine or consolidate the outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of the outstanding Common Stock, then in any such case, the
number of Rights associated with each share of Common Stock then outstanding,
or issued or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event. The adjustments provided for in this
Section 11(p) shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination, consolidation or reclassification
is effected.
(q) The exercise of Rights under Section 11(a)(ii)
shall only result in the loss of rights under Section 11(a)(ii) to the extent
so exercised and shall not otherwise affect the rights represented by the
Rights under this Rights Agreement, including the rights represented by Section
13.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Rights Certificate in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be
deemed
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to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, on or following the Stock
Acquisition Date or, if a Transaction is proposed, the Distribution Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person, (y) any Person shall consolidate with the Company,
or merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger (other than, in the case of either
transaction described in (x) or (y), a merger or consolidation which would
result in all of the Voting Power represented by the securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the surviving
entity) all of the Voting Power represented by the securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation and the holders of such securities not having changed as a result
of such merger or consolidation and in which all holders of shares of Common
Stock are treated alike and following such transaction the holders of Common
Stock immediately prior to the transaction hold in the same proportion relative
to each other the same percentage of the aggregate Voting Power of the entity
surviving the transaction as such holders held immediately prior to such
transaction), or (z) the Company shall sell, mortgage or otherwise transfer (or
one or more of its subsidiaries shall sell, mortgage or otherwise transfer), in
one or more transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its subsidiaries (taken as a
whole) to any other Person, then, and in each such case, proper provision shall
be made so that (i) following the Distribution Date, each holder of a Right,
subject to Section 7(e), shall have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, such number
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of shares of freely tradable Common Stock of the Principal Party (as
hereinafter defined), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of one
ten-thousandths of a share of Preferred Stock for which a Right is then
exercisable (without taking into account any adjustment previously made
pursuant to Section 11(a)(ii) hereof) and dividing that product by (2) 50% of
the current market price per share of the Common Stock of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of
a sufficient number of shares of its Common Stock in accordance with Section 9
hereof) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y)
of the first sentence of this Section 13, the Person that is
the issuer of any securities into which shares of Common
Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to the merger or consolidation
(including, if applicable, the Company, if it is the
surviving corporation); and
(ii) in the case of any transaction described in (z) of
the first sentence in this Section 13, the Person that is the
party receiving the greatest portion
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of the assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any
such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect subsidiary or
Affiliate of another Person, "Principal Party" shall refer to
such other Person; (2) in case such Person is a subsidiary,
directly or indirectly, or Affiliate of more than one Person,
the Common Stocks of two or more of which are and have been
so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the
greatest aggregate market value; and (3) in case such Person
is owned, directly or indirectly, by a joint venture formed
by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1)
and (2) above shall apply to each of the chains of ownership
having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint venturers
and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
each Principal Party and each other Person who may become a Principal Party as
a result of such consolidation, merger, sale or transfer shall have a
sufficient number of shares of its authorized Common Stock which have not been
issued or reserved for issuance in order to permit the exercise in full of the
Rights in accordance with this Section 13 and shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further providing that, as
soon as
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practicable after the date of any consolidation, merger, sale or transfer of
assets mentioned in paragraph (a) of this Section 13, the Principal Party at
its own expense will
(i) prepare and file a registration statement under the
Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, will use
its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and
will use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration
Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may
be necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all material respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. The rights under this Section 13
shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) and shall survive any exercise thereunder.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if: (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a Permitted Offer (or a wholly owned subsidiary of any such Person
or Persons); (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of Common Stock whose shares were purchased pursuant to such Permitted
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<PAGE> 39
Offer; and (iii) the form of consideration being offered to the remaining
holders of Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon consummation of any
such transaction contemplated by this subsection (d), all Rights hereunder
shall expire.
(e) The Company shall not consummate any such
consolidation, merger, sale or transfer which shall be a Transaction unless
prior thereto certificates evidencing the Rights have been distributed in
accordance with Section 3(a) to holders of shares of Common Stock twenty
business days prior to the date on which the Transaction becomes effective or
is consummated.
Section 14. Additional Covenants.
(a) After the Stock Acquisition Date, the Company
covenants and agrees that it shall not (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer to, in one or more transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its subsidiaries taken as a whole, any other Person if at the time
of or after such consolidation, merger or sale there are any charter or by-law
provisions of the Company or any other Person or any rights, warrants or other
instruments of the Company or any other Person outstanding or any other action
taken which would diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. The Company shall not consummate any such
consolidation, merger or sale unless prior thereto the Company and such other
Person shall have executed and delivered to the Rights Agent a supplemental
agreement evidencing compliance with this subsection.
(b) The Company covenants and agrees that, after the
Stock Acquisition Date, it will not, except as permitted by Section 24 hereof,
take any action the purpose or effect of which is to diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
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Section 15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p), or to distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights 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 15(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 of the Rights for any day shall be the last sale price, 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 reasonably
and with good faith to the holders of Rights by the Board of Directors of the
Company shall be used and shall be binding on the Rights Agent.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are integral
multiples of one ten-thousandth of a share of Preferred Stock) upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
ten-thousandth of a share of Preferred Stock). Fractions of shares of Preferred
Stock in integral multiples of one ten-thousandth of a share of Preferred Stock
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
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<PAGE> 41
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 shares of Preferred Stock
represented by such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not integral multiples of one ten-thousandth of a
share of Preferred Stock, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
ten-thousandth of a share of Preferred Stock. For purposes of this Section
15(b), the current market value of one ten-thousandth of a share of Preferred
Stock shall be one ten-thousandth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of one of the
transactions or events specified in Section 11 giving rise to the right to
receive common stock equivalents (other than Preferred Stock) or other
securities upon the exercise of a Right, the Company shall not be required to
issue fractions of shares or units of such common stock equivalents or other
securities upon exercise of the Rights or to distribute certificates which
evidence fractional shares of such common stock equivalents or other
securities. In lieu of fractional shares or units of such common stock
equivalents or other securities, the Company may pay to the registered holders
of Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of a
share or unit of such common stock equivalent or other securities. For purposes
of this Section 15(c), the current market value shall be determined in the
manner set forth in Section 11(d) hereof for the Trading Day immediately prior
to the date of such exercise and, if such common stock equivalent is not
traded, each such common stock equivalent shall have the value of one
ten-thousandth of a share of Preferred Stock.
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(d) Except as otherwise expressly provided herein, the
holder of a Right by the acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise of a
Right.
Section 16. Rights of Action. All rights of action in respect
of this Agreement (other than rights of action given to the Rights Agent under
Section 19 hereof) are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common Stock), 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 Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement. Holders of Rights shall be
entitled to recover the reasonable costs and expenses, including attorneys'
fees, incurred by them in any action to enforce the provisions of this
Agreement in which they successfully prosecute their claims.
Section 17. Agreement of Rights 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 Common Stock;
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(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer;
(c) subject to Section 6 and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Stock 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; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company shall not have sought or otherwise cooperated in
obtaining such order, decree or ruling and must use its best efforts to have
any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 18. Rights Certificate Holder Not a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Preferred
Stock, Common Stock or any other securities of the Company which may at any
time be issuable on the exercise of the
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Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions thereof.
Section 19. Concerning the Rights Agent. The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other reasonable
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 (including reasonable attorney's
fees and expenses) of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnity provided for in this Section
19 shall survive the expiration of the Rights and the termination of this
Agreement.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it, after proper inquiry or
examination, to be
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genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of Name of
Rights Agent. Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
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 Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights
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Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 21. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring
Person) be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board,
the President, the Chief Financial Officer, any Executive Vice President, the
Treasurer, the Secretary or any Assistant 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 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 Rights Certificates (except as to the fact that it has countersigned
the Rights Certificates) or be required to
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verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any Rights becoming
null and void pursuant to Section 7(e) hereof or for any breach by the Company
of any covenant or condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after actual notice of any such
adjustment); nor shall it be responsible for any determination by the Board of
Directors of the Company of the current market value of the Rights or Preferred
Stock or Common Stock pursuant to the provisions of Section 15 hereof; nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of Preferred Stock or
other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock (or fractional
shares thereof) or other securities will, when so issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
and certificates
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delivered pursuant to any provision hereof from the Chairman of the Board, the
President, the Chief Financial Officer, any Executive Vice President, the
Secretary, any Assistant Secretary or the Treasurer of the Company, and is
authorized to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company or to
the holders of the Rights resulting from any such act, omission, 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) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or
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form of election to purchase, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise
of transfer without first consulting with the Company.
Section 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and, subsequent to the Distribution Date, to holders of the
Rights 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 Stock and Preferred Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of the
Rights 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 Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the
State of New York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of New York), in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state
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authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an affiliate of a
corporation described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and
Preferred Stock, and, if such appointment occurs after the Distribution Date,
mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 22,
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 23. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the number
or kind or class of shares or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
shall with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities, notes or debentures issued
by the Company prior to the Distribution Date, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) the Company shall not be obligated to
issue
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any such Right Certificate if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate shall be issued, and (ii) no Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 24. Redemption and Termination.
(a) (i) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (x) the time that any person
becomes an Acquiring Person or (y) 5:00 P.M., New York City time, on the Final
Expiration Date, redeem all but not less than all of 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"). In addition, the Board of Directors of the Company may, at
its option redeem all, but not less than all, of the then outstanding Rights of
the Redemption Price within 10 days after any Person becomes an Acquiring
Person if (A) the Acquiring Person notifies the Board of Directors that such
Person became an Acquiring Person inadvertently and (B) during such 10 day
period, and at the time of redemption, the Acquiring Person is no longer the
Beneficial Owner of 15% or more of the then outstanding shares of Common Stock.
(ii) In addition, a majority of the Board of
Directors of the Company may, at its option, redeem all but not less than all
of the then outstanding Rights at the Redemption Price at any time following
the occurrence of a Stock Acquisition Date and the expiration of the period
during which the rights of holders of Rights pursuant to Section 11(a)(ii)
hereof may be exercised as a result of the occurrence of such Stock Acquisition
Date, but prior to any event described in clause (x), (y) or (z) of Section
13(a) hereof either (x) in connection with any such event specified in Section
13(a) in which all holders of Common Stock are treated alike and not involving
an Acquiring Person or a
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Transaction Person or an Affiliate or Associate of an Acquiring Person or
Transaction Person or any other Person in which such Acquiring Person,
Transaction Person, Affiliate or Associate has any interest, or any other
Person acting directly or indirectly on behalf of or in association or in
concert with any such Acquiring Person, Transaction Person, Affiliate or
Associate (other than involvement by an Acquiring Person, Transaction Person,
Associate, Affiliate or such other Person solely as a holder of shares of
Common Stock (of the Company) being treated like all other such holders), or
(y) following the occurrence of an event set forth in, and the expiration of
any period during which the holder of Rights may exercise the rights under,
Section 11(a)(ii) if and for as long as the Acquiring Person is not thereafter
the Beneficial Owner of securities representing 15% or more of the outstanding
shares of the Voting Power, and at the time of redemption there are no other
persons who are Acquiring Persons.
(iii) Notwithstanding anything to the contrary in
this Agreement, including, without limitation, the provisions of Section
23(a)(i) and (ii), in the event that a majority of the Board of Directors of
the Company is comprised of (i) persons elected at a meeting or by written
consent of stockholders who were not nominated by the Board of Directors in
office immediately prior to such meeting or action by written consent, and/or
(ii) successors of such persons elected to the Board of Directors for the
purpose of either facilitating a Transaction with a Transaction Person or
circumventing directly or indirectly the provisions of this Section 23(a)(iii),
then (I) the Rights shall not be redeemable for a period of 365 days following
the effectiveness of such election if such redemption is reasonably likely to
have the purpose or effect of facilitating a Transaction with a Transaction
Person and (II) the Rights shall not be redeemable following such 365-day
period if (x) such redemption is reasonably likely to have the purpose of
facilitating a Transaction with a Transaction Person and (y) during such
365-day period, the Company enters into any agreement, arrangement or
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understanding with any Transaction Person which is reasonably likely to have
the purpose or effect of facilitating a Transaction with any Transaction
Person.
(b) Immediately upon the date for redemption set forth
(or determined in the manner specified) in a resolution of the Board of
Directors of the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent 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. Within ten days after the action of the Board of Directors
ordering any such redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to the Rights Agent and to all such holders 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 Stock. 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.
The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights and (ii) mailing payment of
the Redemption Price to the registered holders of the Rights at their last
addresses as they appear on the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the Transfer Agent of the
Common Stock, and upon such action, all outstanding Rights Certificates shall
be null and void without any further action by the Company.
Section 25. Notice of Certain Events. In case the Company at
any time on or after the Distribution Date shall propose (a) to pay any
dividend payable in stock of any class to the holders of Preferred Stock or to
make any other distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or
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retained earnings of the Company) or (b) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (c) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (d) 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 more than 50% of the assets or earning power of the Company
and its subsidiaries (taken as a whole) to, any other Person, or (e) to effect
the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights 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 dividend,
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
shares of Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (a) or (b) above
at least 20 days prior to the record date for determining holders of the shares
of Preferred Stock for purposes of such action, and in the case of any such
other action, at least 20 days prior to the date to the taking of such proposed
action or the date of participation therein by the holders of the shares of
Preferred Stock whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) of
this Agreement shall occur, then, in any such case, the Company shall as soon
as practicable thereafter give to each holder of a Rights Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
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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
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Wendy's International, Inc.
P.O. Box 256
4288 West Dublin-Granville Road
Dublin, Ohio 43107-0256
Attention: General Counsel
Subject to the provisions of Section 22, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights 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:
American Stock Transfer and Trust Company
6201 15th Avenue
Brooklyn, New York 11209
Attention: Legal Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company may from time to time supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of certificates representing Common Stock and the Rights. From and after the
Distribution Date, the Company may
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from time to time supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person, Transaction Person or an Affiliate or Associate of an
Acquiring Person or a Transaction Person); provided, however, that this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with
the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment, provided that such supplement or amendment does not adversely affect
the rights or obligations of the Rights Agent under Section 19 or Section 21 of
this Agreement and such amendment or supplement shall be effective regardless
of whether or when executed by the Rights Agent. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident with
the interests of the holders of shares of Common Stock. Notwithstanding
anything contained in this Rights Agreement to the contrary, in the event that
a majority of the Board of Directors of the Company is comprised of (i) persons
elected at a meeting or by written consent of stockholders who were not
nominated by the Board of Directors in office immediately prior to such meeting
or written consent, and/or (ii) successors of such persons elected to the Board
of Directors for the purpose of either facilitating a Transaction with a
Transaction Person or circumventing directly or indirectly the provisions of
this
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Section 27, then (I) for a period of 365 days following the effectiveness of
such action, this Rights Agreement shall not be amended or supplemented in any
manner reasonably likely to have the purpose or effect of facilitating a
Transaction with a Transaction Person and (II) no amendments or supplements may
be made following such 365-day period if (x) such amendment or supplement is
reasonably likely to have the purpose of facilitating a Transaction with a
Transaction Person and (y) during such 365-day period, the Company enters into
any agreement, arrangement or understanding with any Transaction Person which
is reasonably likely to have the purpose or effect of facilitating a
Transaction with any Transaction Person.
Section 28. Determination and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock or other securities outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock or any other securities
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act as in effect on the date of this Agreement. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board, or the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement and whether any proposed amendment adversely affects the
interests of the holders of Rights). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by
the Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights
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Agent, the holders of the Rights Certificates and all other parties, and (y)
not subject the Board to any liability to the holders of the Rights
Certificates or holders of shares of Common Stock.
Section 29. 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 30. 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 Rights
Certificates (and, prior to the Distribution Date, the Common Stock) 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 Rights Certificates (and, prior to the
Distribution Date, the Common Stock).
Section 31. 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 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Ohio 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 to be performed entirely within such State except for Sections
19, 20, 21 and 22 hereof which for all purposes shall be governed by and
construed in accordance with the laws of the State of New York.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to
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<PAGE> 59
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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<PAGE> 60
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: WENDY'S INTERNATIONAL, INC.
[Seal]
/s/ FREDERICK R. REED By /s/ GORDON F. TETER
- ----------------------------------- ------------------------------
Name: Frederick R. Reed Name: Gordon F. Teter
Title: Chief Financial Officer, Title: Chairman of the Board, Chief
General Counsel & Secretary Executive Officer & President
Attest: AMERICAN STOCK TRANSFER AND
TRUST COMPANY
[Seal]
/s/ SUSAN SILBER By /s/ HERBERT J. LEMMER
- ----------------------------------- ------------------------------
Name: Susan Silber Name: Herbert J. Lemmer
Title: Assistant Secretary Title: Vice President
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<PAGE> 61
Exhibit A
FORM OF CERTIFICATE OF AMENDMENT TO
THE ARTICLES OF INCORPORATION OF
WENDY'S INTERNATIONAL, INC.
Robert L. Barney, Chairman of the Board and Chief Executive
Officer and Lawrence E. Schauf, Secretary, of Wendy's International, Inc., an
Ohio corporation for profit with its principal place business at Dublin, Ohio,
do hereby certify that at a meeting of the Board of Directors held pursuant to
notice on the 4th day of August, 1988, the following resolution was adopted
pursuant to Section 1701.70(B)(1) of the Ohio Revised Code:
RESOLVED, that, pursuant to the authority vested in the Board
of Directors of the corporation in accordance with the provisions of Chapter
1701 of the Ohio Revised Code, as amended, and by Article IV of the
corporation's Articles of Incorporation, such Article IV is amended to add a
new section providing for a series of Voting Preferred Shares and that the
designation and authorized number of shares, and the relative rights,
preferences and limitations of, such series are as follows:
Of the 250,000 preferred shares of the corporation, 150,000
shall constitute a series of Voting Preferred Stock an shall have, subject and
in addition to the other provisions of this Article IV, the following relative
rights, preferences an limitations.
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Preferred Shares" $1.00 par value (the "Series
A Preferred Stock"). The number of shares of Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than that of the shares then outstanding plus the number of shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock in preference to the holders of shares of
Common Stock, without par value (the
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<PAGE> 62
"Common Stock"), of the Corporation and any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of January, April, July, and October in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Preferred Stock in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $100.00, or (b)
subject to the provision for adjustment hereinafter set forth, 10,000 times the
aggregate per share amount of all cash dividends, and 10,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. In the event the Corporation shall at any
time after August 4, 1988 (the "Rights Declaration Date") (i) declare a
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $100.00 per share on the Series
A Preferred Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date
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<PAGE> 63
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1 vote on all matters submitted to a vote of the shareholders of the
Corporation.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a
vote of shareholders of the Corporation.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends
or upon liquidation,
A-3
<PAGE> 64
dissolution or winding up) with the Series A Preferred Stock provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock or any shares of stock
ranking on a parity with the Series A Preferred Stock except in accordance with
a purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preference of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received per share, the
greater of 10,000 times $25 or 10,000 times the payment made per share of
Common Stock, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional distributions
shall be made to the holders of shares of Series A Preferred Stock unless,
prior thereto, the holders of shares of Common Stock shall have received an
amount per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series A Liquidation Preference by (ii) 10,000 (as
appropriately adjusted as set forth in subparagraph C below to reflect such
events as stock splits, stock
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<PAGE> 65
dividends and recapitalizations with respect to the Common Stock) (such number
in clause (ii), the "Adjustment Number"). Following the payment of the full
amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Preferred Stock and Common Stock,
respectively, holders of Series A Preferred Stock and holders of shares of
Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Series A Preferred Stock then such remaining assets
shall be distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event there are not
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of
Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then any such
case the shares of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 10,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the
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<PAGE> 66
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that are
outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Fractional Shares. Series A Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in proportion
to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Stock.
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this _______ day of August, 1988.
________________________________
Chairman of the Board and
Chief Executive Officer
Attest:
__________________________
Secretary
A-6
<PAGE> 67
Exhibit B
[Form of Rights Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER AUGUST 10, 2008 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY
THIS CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE AMENDED AND RESTATED RIGHTS
AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY ARE NULL AND VOID.] *
Rights Certificate
Wendy's International, Inc.
This certifies that , or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Amended and Restated Rights Agreement dated as of December 8, 1997 (the
"Rights Agreement") between Wendy's International, Inc., an Ohio corporation
(the "Company"), and American Stock Transfer and Trust Company, (the "Rights
Agent"), to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 p.m. (New
York City time) on August 10, 2008 at the principal office of the Rights Agent
in New York, New York, one ten-thousandth of a fully paid, non-assessable share
- -------------------
* The portion of the legend in brackets shall be inserted only if applicable.
B-1
<PAGE> 68
of Series A Preferred Shares (the "Preferred Stock") of the Company, at a
purchase price of $100 per one ten-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
appropriate Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of December 8, 1997, based on
the Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and
the number of shares of Preferred Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Rights 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 Rights
Certificates. Copies of the Rights Agreement are on file at the principal
office of the Company, and the Company will mail to the holder a copy of the
Rights Agreement within five days of a written request therefor.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office of the Rights Agent, may
be exercised for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised (other than
pursuant to Section 11(a)(ii) of the Rights Agreement) in part, the holder
shall be entitled to receive upon surrender hereof another Rights Certificate
or Rights Certificates for the
B-2
<PAGE> 69
number of whole Rights not exercised. If this Rights Certificate shall be
exercised in whole or in part pursuant to Section 11(a)(ii) of the Rights
Agreement, the holder shall be entitled to receive this Rights Certificate duly
marked to indicate that such exercise has occurred as set forth in the Rights
Agreement.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right. Subject to the provisions of the Rights
Agreement, the Company at its option, may elect to mail payment of the
redemption price to the registered holder of the Right at the time of
redemption, in which event this certificate may become void without any further
action by the Company.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one ten-thousandth of a share of Preferred
Stock, 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 Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of shares of Preferred Stock or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything
contained in the Right Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
B-3
<PAGE> 70
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper office of the
Company and its corporate seal. Dated as of _______________.
ATTEST: WENDY'S INTERNATIONAL, INC.
_________________________________ By _________________________________
Name: Name:
Title: Title:
Countersigned:
_________________________________
Authorized Signature
B-4
<PAGE> 71
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ____________________________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________ Attorney, to
transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ______________, 19___
__________________________
Signature
Signature Guaranteed:
B-5
<PAGE> 72
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [
] are not being sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an affiliate or Associate of an Acquiring Person.
Dated:________________, 19___ _________________________________
Signature
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
B-6
<PAGE> 73
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To WENDY'S INTERNATIONAL, INC.:
The undersigned hereby irrevocably elects to exercise
________ Rights represented by this Rights Certificate to purchase the shares
of Common Stock (or such other securities of the Company) issuable upon the
exercise of the Rights and requests that certificates for such shares be issued
the name of:
_______________________________________________________________________________
(Please insert social security or other identifying number)
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
The Rights Certificate indicating the balance, if any, of
such Rights which may still be exercised pursuant to each of Section 11(a)(ii)
and Section 13 of the Rights Agreement shall be returned to the undersigned
unless such person requests that the Rights Certificate be registered in the
name of and delivered to:
_______________________________________________________________________________
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
_______________________________________________________________________________
Dated: ______________ 19___
_____________________________
Signature
Signature Guaranteed:
B-7
<PAGE> 74
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(3) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement).
Dated:________________, 19___ _________________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
B-8
<PAGE> 75
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To WENDY'S INTERNATIONAL, INC.:
The undersigned hereby irrevocably elects to exercise ________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock (or such other securities of the Company or any other Person)
issuable upon the exercise of the Rights and requests that certificates for such
shares be issued the name of:
_______________________________________________________________________________
(Please insert social security or other identifying number)
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
The Rights Certificate indicating the balance, if any, of
such Rights which may still be exercised pursuant to each of Section 11(a)(ii)
and Section 13 of the Rights Agreement shall be returned to the undersigned
unless such person requests that the Rights Certificate be registered in the
name of and delivered to:
______________________________________________________________________________
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
_______________________________________________________________________________
Dated: ______________ 19___
_____________________________
Signature
Signature Guaranteed:
B-9
<PAGE> 76
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights, evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement).
Dated:________________, 19___ _________________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
B-10
<PAGE> 77
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On August 4, 1988, the Board of Directors of Wendy's
International, Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of common stock, without par value (the
"Common Stock" or "Common Shares"), of the Company to stockholders of record at
the close of business on September 2, 1988 (the "Record Date"). On October 30,
1997, the Board of Directors of the Company adopted amendments to the Rights
Agreement (the "Prior Rights Agreement") dated as of August 10, 1988, as
amended on December 29, 1995, between the Company and American Stock Transfer
and Trust Company (the "Rights Agent") (as successor rights agent to Morgan
Shareholder Services Trust Company) pursuant to which the Preferred Stock
Purchase Rights were issued. The amendments are set forth in an Amended and
Restated Rights Agreement (the "Rights Agreement") dated as of December 8, 1997
between the Company and the Rights Agent, which supersedes the Prior Rights
Agreement. The following summary of the Rights is qualified in its entirety by
reference to the Rights Agreement.
As of the date of this Summary, there is associated with each
outstanding Common Share one Right which, except as set forth below, when
exercisable, entitles the registered holder to purchase from the Company one
ten-thousandth of a share of a series of preferred stock, designated as Series
A Preferred Stock, par value $1 per share (the "Preferred Stock"), at a price
of $100 per one ten-thousandth of a share (the "Purchase Price"), subject to
adjustment. The terms of the Preferred Stock are summarized below and are set
forth in a Form of Certificate of Amendment to the Articles of Incorporation of
the Company.
Until the earliest to occur of (i) a public announcement
that, without the prior consent of the Board of Directors of the Company, a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire beneficial ownership of securities
having 15% or more of the voting power of all outstanding voting securities of
the Company (the "Stock Acquisition Date") or (ii) ten business days (unless
such date is extended by the Board of Directors) following the commencement of
(or a public announcement of an intention to make) a tender offer or exchange
offer which would result in any person or group and related persons becoming an
Acquiring Person, without the prior consent of the Board of Directors of the
Company or (iii) twenty business days prior to the date on which a Transaction
(as such term is hereinafter defined) is reasonably expected to become
effective or be consummated (the
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earliest of such dates being called the "Distribution Date"), the Rights will
be attached to all Common Share certificates and will be evidenced by such
Common Share certificate. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with Common
Share certificates. 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 the 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, even without such
a notation, 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 ("Rights
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date, and the separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on the earliest of (i) August 10, 2008, (ii)
consummation of a merger transaction with a person or group who acquired Common
Shares pursuant to a Permitted Offer (as defined below), and who is offering in
the merger the same price per share and form of consideration paid in the
Permitted Offer, or (iii) redemption by the Company as described below.
In the event that an Acquiring Person becomes such other than
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the Company to be
both adequate and otherwise in the best interests of the Company and its
stockholders (a "Permitted Offer"), proper provision shall be made so that each
holder of a Right will for a 60 day period after the later of the date of such
event and the effectiveness of an appropriate registration statement (or such
other longer period set by the Board of Directors) have the right to receive
upon exercise that number of shares of Common Stock having a market value of
two times the exercise price of the Right, to the extent available, and then
(after all authorized and unreserved shares of Common Stock have been issued) a
common stock equivalent (such as Preferred Stock or another equity security
with at least the same economic value as the Common Stock) having a market
value of two times the exercise price of the Right, with Common Stock to the
extent available being issued first (such right being called the "Subscription
Right"). In the event that, at any time following the Stock Acquisition Date
or, if a Transaction is proposed, the Distribution Date, the Company is
involved in a merger or other business combination transaction in which the
Common Stock is exchanged or changed, or 50% or more of the Company's assets or
earning power are sold (in one transaction or a series of transactions), proper
provision shall be made so that each holder of a Right shall thereafter have
the right to receive, upon the exercise thereof at the then
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current exercise price of the Right, that number of shares of common stock of
the acquiring company (or, in the event there is more than one acquiring
company, the acquiring company receiving the greatest portion of the assets or
earning power transferred) which at the time of such transaction would have a
market value of two times the exercise price of the Rights (such right being
called the "Merger Right"). The holder of a Right will continue to have the
Merger Right whether or not such holder exercises the Subscription Right. Upon
the occurrence of any of the events giving rise to the exercisability of the
Subscription Right or the Merger Right, any Rights that are or were at any time
owned by an Acquiring Person shall become null and void.
The Purchase Price payable, the number of Rights, and the
number of shares of Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of the Preferred Stock, (ii) upon the grant to
holders of the Preferred Stock of certain rights or warrants to subscribe for
Preferred Stock, certain convertible securities or securities having the same
or more favorable rights, privileges and preferences as the Preferred Stock at
less than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred Stock of evidences of indebtedness,
cash (excluding regular quarterly cash dividends out of earnings or retained
earnings), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractions of shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
The number of outstanding Rights associated with each share
of Common Stock and the voting and economic rights of each ten-thousandth of a
share of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights, the Company
may redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"), which redemption shall be effective upon the action
of the Board of Directors. Additionally, following the Stock Acquisition Date
and the expiration of the period during which the Subscription Right is
exercisable, the Company may redeem the then
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outstanding Rights in whole, but not in part, at the Redemption Price provided
that such redemption is incidental to a merger or other business combination
transaction or series of transactions involving the Company in which all
holders of Common Shares are treated alike but not involving an Acquiring
Person or Transaction Person (as hereinafter defined) (or any person who was an
Acquiring Person or Transaction Person (as hereinafter defined)) or its
affiliates or associates. Upon the effective date of the 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.
In the event that a majority of the Board of Directors of the
Company in office following a meeting of stockholders or stockholder action by
written consent are not nominated by the Board of Directors serving immediately
prior to such meeting or action, then for 365 days following such meeting or
action the Rights may not be redeemed or amended if such redemption or
amendment is reasonably likely to facilitate a combination or sale of assets or
earning power (a "Transaction") with a person who (A) either (i) is or will
become an Acquiring Person or (ii) is a party involved in a merger or
consolidation with, or sale of assets by, the Company or affiliate or associate
thereof if the Transaction were to be consummated and (B) who has directly or
indirectly proposed or nominated a member of the Board who is in office at the
time the Transaction is being considered (a "Transaction Person"). The Rights
may not be redeemed or amended thereafter if during such 365 day period the
Company enters into any agreement reasonably likely to facilitate a Transaction
with a Transaction Person and the redemption is reasonably likely to facilitate
a Transaction with a Transaction Person.
The Preferred Stock purchasable upon exercise of the Rights
will be non-redeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock). Each
share of Preferred Stock will have a preferential quarterly dividend in an
amount equal to 10,000 times the dividend declared on each share of Common
Stock, but in no event less than $100.00. In the event of liquidation, the
holders of Preferred Stock will receive a preferred liquidation payment equal
to the greater of 10,000 times $25 or 10,000 times the payment made per each
share of Common Stock. Each share of Preferred Stock will have one vote, voting
together with the shares of Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 10,000
times the amount and type of consideration received per share of Common Stock.
The rights of the Preferred Stock as to dividends, liquidation and voting, and
in the event of mergers and consolidations, are protected by customary
anti-dilution provisions. Fractional shares of Preferred Stock will be
issuable; however, the Company may elect to distribute depositary receipts in
lieu of such fractional shares. In lieu of fractional shares other than
fractions that are multiples of one ten-thousandth of a share, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
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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.
Except as set forth above, the terms of the Rights may be
amended by the Board of Directors of the Company, (i) prior to the Distribution
Date in any manner, and (ii) on or after the Distribution Date or cure any
ambiguity, to correct or supplement any provision of the Rights Agreement which
may be defective or inconsistent with any other provisions, or in any manner
not adversely affecting the interests of the holders of the Rights (including
the interests of any Acquiring Person), or, subject to certain limitations, to
shorten or lengthen any time period under the Rights Agreement.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to Form 8-A/A amending a
Registration Statement on Form 8-A. 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 incorporated herein by reference.
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