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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Form 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
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GENERAL HOST CORPORATION
(Exact name of Registrant as Specified in its Charter)
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NEW YORK STATE 13-0762080
(State of Incorporation or Organization) (IRS Employer Identification No.)
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METRO CENTER, ONE STATION PLACE, P.O. BOX 10045, STAMFORD, CONNECTICUT 06904
(Address of Principal Executive Offices) Zip Code
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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NAME OF EACH EXCHANGE ON WHICH
TITLE OF EACH CLASS TO BE SO REGISTERED EACH CLASS IS TO BE SO REGISTERED
---------------------------------------- ---------------------------------
<S> <C>
Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
(Title of Class)
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SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
A. (i) On February 22, 1990, the Board of Directors of General Host
Corporation (the "Company") declared a dividend distribution of one Right for
each outstanding share (and shares held in treasury) of the Company's Common
Stock $1.00 par value per share (the "Common Stock"), to shareholders of record
at the close of business on March 7, 1990. Such dividend distribution replaces
the rights distributed pursuant to a previous rights agreement (the "Previous
Rights Agreement), which expired as of the close of business on March 7, 1990.
The Rights were scheduled to expire on March 7, 1995, but on March 1, 1995, the
Company's Board of Directors extended the expiration date for five years, to
March 7, 2000.
(ii) Each Right entitles the registered holder, upon the occurrence of
certain events, to purchase from the Company one share of Common Stock at a
Purchase Price of $60 per Share, subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and Chemical Bank, as Rights Agent. Capitalized terms not
defined in this Registration Statement shall have the respective meanings given
in the Rights Agreement.
B. Initially, the Rights will be represented by the Common Stock
certificates and no separate Rights Certificates will be distributed until the
Distribution Date. Until the Distribution Date, (x) the Rights will be evidenced
by the Common Stock certificates and will be transferred only with such Common
Stock certificates, (y) new Common Stock certificates issued after March 7, 1990
will contain a legend incorporating the new Rights Agreement by reference and
(z) the surrender for transfer of any certificate for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. Stock certificates legended pursuant to the
Previous Rights Agreement shall represent Rights granted pursuant to the present
Rights Agreement.
C. Unless a later date is determined by action of the Board of Directors,
the Distribution Date will occur on the close of business on the tenth business
day after the first to occur of
(i) the commencement of a tender offer or exchange offer that would, if
completed, result in a person or group of affiliated or associated persons
beneficially owning 20% or more of such outstanding shares of Common Stock,
(ii) a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 20% or more of the outstanding shares of
Common Stock,
(iii) the consolidation or merger of any entity with or into the
Company where the Company is the surviving corporation, and the Common Stock
remains unchanged,
(iv) the transfer, by the beneficial owner of 20% or more of the
outstanding shares of Common Stock or by a person who would, as a result of such
transaction, become the beneficial owner of 20% or more of the outstanding
shares of Common Stock, of any assets to the Company in exchange for shares of
equity securities of the Company,
(v) the consolidation or merger of any entity with or into the Company
where the Company is the surviving corporation and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
is changed into or exchanged for securities of any other entity, or cash or
other property,
(vi) the consolidation or merger of the Company with or into another
entity where the Company is not the surviving corporation, or
(vii) the sale of transfer by the Company of assets or earning power
aggregating more than 50% of the assets or earning power of the Company.
D. The Rights are not exercisable until the Distribution Date (unless a
later date is determined by action of the Board of Directors) and will expire at
the close of business on March 7, 2000, unless earlier redeemed by the Company
as described below.
E. As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise provided in
the Rights Agreement or determined by
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the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
F. Unless the transaction is approved in advance by the Board of
Directors, upon the occurrence of any of the events listed as subparagraphs
(ii), (iii) or (iv) in paragraph C above, each holder of a Right (except Rights
voided as set forth in paragraph H below) will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, other
securities of the Company or other consideration) at 50% of the then market
price.
G. Unless the transaction is approved in advance by the Board of
Directors, upon the occurrence of any of the events listed as subparagraphs (v),
(vi) or (vii) in paragraph C above, each holder of a Right (except Rights voided
as set forth in paragraph H below) will thereafter have the right to receive,
upon exercise, common stock of the acquiring company at 50% of the then market
price.
H. So long as permitted by applicable law, upon the occurrence of any of
the events set forth in subparagraphs (ii) through (vii) of paragraph C above,
all Rights beneficially owned by any Acquiring Person will be null and void, and
therefore the Acquiring Person and any transferee of the Acquiring Person will
not be able to purchase shares at a 50% discount.
I. The Purchase Price payable, and the number of shares of Common 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
Common Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends).
J. At any time, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.
K. Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
L. The Board of Directors of the Company may supplement or amend any
provision of the Rights Agreement; provided, however that after the date upon
which the Rights are first exercisable, no supplement or amendment shall be made
which changes the redemption price, the final expiration date of the Rights, the
Purchase Price or the number of shares of Common Stock for which a Right is
exercisable.
M. The Board of Directors of the Company may, at any time, delay the
Distribution Date and/or the date upon which the Rights first become
exercisable.
N. A copy of each of the Rights Agreement and an Amendment thereto is
being filed with the Securities and Exchange Commission as an Exhibit to this
Registration Statement on Form 8-A. A copy of the Rights Agreement is available
free of charge from the Rights Agent. 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.
O. Each share of Common Stock of the Company outstanding and each share
held in treasury at the close of business on March 7, 1990 received one Right.
So long as the Rights are attached to the Common Stock, one additional Right (as
such number may be adjusted pursuant to the provisions of the Rights Agreement)
shall be deemed to be delivered for each share of Common Stock issued by the
Company subsequent to March 7, 1990.
P. The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner which causes the Rights to become discount Rights unless the offer
is approved in advance by the Board of Directors. The Rights, however, should
not affect any prospective offeror willing to make an offer at a fair price and
otherwise in the best interests of the Company and its shareholders as
determined by the Board of Directors, or willing to negotiate with the Board of
Directors. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors since
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the Board of Directors may, at its option, redeem all but not less than all the
then outstanding Rights at the Redemption Price.
Q. In addition, certain provisions of the Company's Certificate of
Incorporation (the "Certificate of Incorporation") may have anti-takeover
effects. The Certificate of Incorporation provides, among other things, for a
classified Board of Directors divided into three classes, cumulative voting for
election of directors, and the approval of the holders of at least 80% of the
Company's outstanding stock entitled to vote to authorize certain business
transactions between the Company and any holder of five percent or more of the
Company's outstanding shares of stock.
R. The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the Form of
Rights Certificate, is attached hereto as Exhibit 1 and is incorporated herein
by reference. Amendment No. 1 to the Rights Agreement dated as of March 1, 1995
is attached hereto as Exhibit 1a and is incorporated herein by reference. The
foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to such Exhibits.
ITEM 2 EXHIBITS.
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1, 2 Rights Agreement, dated as of March 7, 1990 between General Host Corporation and
Manufacturers Hanover Trust Company (now Chemical Bank as successor by merger) which
includes as Exhibit A thereto the Form of Rights Certificate. Pursuant to the Rights
Agreement, Rights Certificates will not be mailed until after the Distribution Date (as
that term is defined in the Rights Agreement).
1a Amendment No. 1 to the Rights Agreement dated as of March 1, 1995.
</TABLE>
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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.
Date: March 23, 1995
GENERAL HOST CORPORATION
By: /s/ James R. Simpson
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EXHIBIT 1
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GENERAL HOST CORPORATION
AND
MANUFACTURERS HANOVER TRUST COMPANY,
RIGHTS AGENT
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RIGHTS AGREEMENT
DATED AS OF MARCH 7, 1990
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INDEX
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PAGE
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Section 1. Certain Definitions............................................................. 1
Section 2. Appointment of Rights Agent..................................................... 5
Section 3. Issue of Rights Certificate..................................................... 5
Section 4. Form of Rights Certificates..................................................... 7
Section 5. Countersignature and Registration............................................... 9
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates................................... 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights................... 11
Section 8. Cancellation and Destruction of Rights Certificates............................. 14
Section 9. Reservation and Availability of Shares of Common Stock.......................... 14
Section 10. Common Stock Record Date........................................................ 16
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights..... 16
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...................... 29
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power............ 29
Section 14. Fractional Rights and Fractional Shares......................................... 34
Section 15. Rights of Action................................................................ 35
Section 16. Agreement of Rights Holders..................................................... 36
Section 17. Rights Certificate Holder Not Deemed a Shareholder.............................. 37
Section 18. Concerning the Rights Agent..................................................... 37
Section 19. Merger or Consolidation or Change of Name of Rights Agent....................... 38
Section 20. Duties of Rights Agent.......................................................... 38
Section 21. Change of Rights Agent.......................................................... 41
Section 22. Issuance of New Rights Certificates............................................. 42
Section 23. Redemption and Termination...................................................... 43
Section 24. Notice of Certain Events........................................................ 44
Section 25. Notices......................................................................... 45
Section 26. Supplements and Amendments...................................................... 46
Section 27. Successors...................................................................... 47
Section 28. Determinations and Actions by the Board of Directors, etc....................... 47
Section 29. Benefits of this Agreement...................................................... 47
Section 30. Severability.................................................................... 48
Section 31. Governing Law................................................................... 48
Section 32. Counterparts.................................................................... 48
Section 33. Descriptive Headings............................................................ 48
Testimonium and Signatures..................................................................... 49
Exhibit A -- Form of Rights Certificate
Exhibit B -- Summary of Rights to Purchase Common Stock
</TABLE>
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 7, 1990 (the "Agreement"), between
GENERAL HOST CORPORATION , a New York corporation (the "Company"), and
MANUFACTURERS HANOVER TRUST COMPANY, a New York corporation (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, the Company is party to a Rights Agreement dated as of February
20, 1985 (the "Previous Rights Agreement"), with the Rights Agent;
WHEREAS, rights granted pursuant to the Previous Rights Agreement not
exercised by the close of business on March 7, 1990 expire pursuant to the terms
of the Previous Rights Agreement;
WHEREAS, on February 22, 1990 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of common stock, par value $1.00 per
share, of the Company (the "Common Stock") outstanding at the close of business
on March 7, 1990 (the "Record Date"), payable at such time, and has authorized
the issuance of one Right (as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(o) hereof) for each share of Common Stock of the
Company issued between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date, each Right initially
representing the right to purchase one share of Common Stock of the Company,
upon the terms and subject to the conditions hereafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
SECTION 1(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, shall be the Beneficial Owner (as such term is hereinafter defined)
of securities of the Company constituting a Substantial Block (as such term is
hereinafter defined), but shall not include the Company, any Subsidiary (as such
term is hereinafter defined) of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, a Person shall not be considered an
"Acquiring Person" if, prior to such Person (together with Affiliates and
Associates of such Person) becoming the Beneficial Owner of securities of the
Company constituting a Substantial Block, the Board of Directors approves the
transaction whereby such Person (together with Affiliates and Associates of such
Person) becomes the Beneficial Owner of securities of the Company constituting a
Substantial Block; provided, however, that if such Person (together with
Affiliates and Associates of such Person) thereafter becomes the Beneficial
Owner of more than 5% of the Common Stock of the Company then outstanding (in
addition to the amount previously approved by the Board of Directors), without
the prior approval of the Board of Directors, such Person shall be an Acquiring
Person.
SECTION 1(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 and in effect
on the date of this Agreement (the "Exchange Act").
SECTION 1(C). A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities:
SECTION 1(C)(I). which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) 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) securities
issuable upon exercise of Rights at any time prior to the occurrence of a
Triggering Event (as such term is hereinafter defined) or (C) securities
issuable upon exercise of Rights from and after the occurrence of a
Triggering Event which Rights were
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acquired by such Person or any of such Person's Affiliates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection with
an adjustment made with respect to any Original Rights;
SECTION 1(C)(II). which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including 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
subparagraph (ii) as a result of an agreement, arrangement or understanding
to vote such security if such agreement, arrangement or understanding: (A)
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 provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
SECTION 1(C)(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
writing), for the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such acquisition.
SECTION 1(D). "Business Day" shall mean any day other than a Saturday,
Sunday or day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
SECTION 1(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.
SECTION 1(F). "Common Stock" shall mean the common stock, par value $1.00
per share, of the Company, except that "Common Stock" when used with reference
to any Person other than the Company shall mean the capital stock of such Person
with the greatest aggregate voting power, or, if such Person has no capital
stock, the equity securities or other equity interest having power to control or
direct the management, of such Person.
SECTION 1(G). "Distribution Date" shall have the meaning given to it in
Section 3(a) hereof.
SECTION 1(H). "Person" shall mean any individual, firm, corporation,
partnership, joint venture, group, association, trust, joint stock company,
unincorporated organization, governmental or political subdivision thereof or
other entity as well as any syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act.
SECTION 1(I). "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(I) hereof.
SECTION 1(J). "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
SECTION 1(K). "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
SECTION 1(L). "Substantial Block" shall mean a number of shares of Common
Stock which equals or exceeds 20% of the number of shares of Common Stock then
outstanding.
SECTION 1(M). "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is beneficially owned, directly
or indirectly, by such Person, or otherwise controlled by such Person.
SECTION 1(N). "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
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appointment. The Company may from time to time appoint such CoRights Agents as
it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
SECTION 3(A). Subject to Section 7(a)(ii), until the close of business on
the tenth Business Day after the first to occur of (i) the Stock Acquisition
Date, (ii) an event described in either Section 11(a)(ii)(I)(A), Section
11(a)(ii)(I)(B) or Section 13(a) or (iii) a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, if upon consummation thereof, such Person would be the Beneficial Owner of
a Substantial Block (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; such tenth Business Day
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 the 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 Rights Certificates, as more fully
set forth below and (y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the Company has notified the Rights
Agent of the occurrence of 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, one or more rights
certificates, in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
11(o) hereof, at the time of distribution of the Rights Certificates, at its
option the Company shall make, and notify the Rights Agent of, the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
SECTION 3(B). As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit B (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Stock outstanding as
of the Record Date (including shares held in the Company's treasury), until the
Distribution Date, 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 earlier of the
Distribution Date or the Expiration Date (as such term is defined in Section 7
hereof), the transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
SECTION 3(C). Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between General Host
Corporation (the "Company") and Manufacturers Hanover Trust Company (the
"Rights Agent") dated as of March 7, 1990, as it may be amended from time
to time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Company. 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 no longer evidenced by this
certificate. The Company will mail or arrange for mailing to the holder of
this certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associates thereof (as such terms are
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defined in the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may become null and void.
Stock certificates legended pursuant to the Previous Rights Agreement shall
represent Rights granted pursuant to this Agreement. Until the earlier of (i)
the Distribution Date or (ii) the Expiration Date, issued Rights shall be
evidenced solely by the certificates representing the shares of Common Stock
with which such Rights are associated and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
SECTION 4. Form of Rights Certificates.
SECTION 4(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 in the form set forth in Exhibit A 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 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 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase upon the exercise of
each of the Rights evidenced thereby such number of shares of Common Stock as
shall be set forth therein at the price set forth therein (such exercise price
per share, the "Purchase Price"), but the number of such shares purchasable upon
the exercise of each Right and the Purchase Price thereon shall be subject to
adjustment as provided herein.
SECTION 4(B). So long as permitted by applicable law, any Rights
Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) 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 or to any Person with whom such Acquiring Person has any 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 of
avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in Section
7(e) of such Agreement.
SECTION 5. Countersignature and Registration.
SECTION 5(A). The Rights Certificates shall be executed on behalf of the
Company by the Chairman of the Board, any Vice Chairman of the Board, President
or any Vice President, or Treasurer, Controller or General Counsel, 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.
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<PAGE> 7
SECTION 5(B). On the Distribution Date, if the Rights Agent is not the
sole transfer agent for the Common Stock, the Company will furnish the Rights
Agent with the name and address of and the number of Rights held by each holder
of the Rights. Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at one of its offices in New York, New York, 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 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.
SECTION 6(A). Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of shares of Common Stock (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided 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. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, 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.
SECTION 6(B). Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in the case of loss, theft or destruction, of
indemnity or security satisfactory to them, and, if requested by the Company,
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.
SECTION 7(A)(I). Subject to Sections 7(a)(ii) and 7(e) hereof, the
registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 23(a) hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the principal office or
offices of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number of
shares (or other securities) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (x) the close of business on
March 7, 1995 (the "Final Expiration Date"), or (y) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier of (x)
and (y) being herein referred to as the "Expiration Date").
SECTION 7(A)(II). Notwithstanding anything to the contrary stated
herein, the Board of Directors shall have the right and ability, in its
sole discretion, to delay the Distribution Date and/or the date on which
the Rights may first be exercised for such period or periods as it, in its
sole discretion, shall determine. In no event may the Rights be exercised
prior to the Distribution Date.
SECTION 7(B). The Purchase Price for each share of Common Stock pursuant
to the exercise of a Right shall initially be $60, and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
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<PAGE> 8
SECTION 7(C). Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per share of Common Stock (or other securities) to be
purchased as set forth below and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
(A) requisition from any transfer agent of the shares of Common Stock of which
the Company has notified the Rights Agent (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the total number
of shares of Common Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Common Stock
issuable upon exercise of the Rights hereunder with a depositary agent and has
so notified the Rights Agent, requisition from the depositary agent depositary
receipts representing such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares of Common 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) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of
the Purchase Price shall be made in cash or by certified bank check or bank
draft payable to the order of the Company. In the event that the Company is
obligated to issue other securities of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
SECTION 7(D). In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining unexercised shall be issued by the
Rights Agent and 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, subject to the provisions of Section 6 and Section 14 hereof.
SECTION 7(E). Notwithstanding anything in this Agreement to the contrary,
so long as permitted by applicable law, from and after the first occurrence of a
Section 11(a)(ii) Event and/or a Section 13 Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) 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 any
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 Rights 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.
SECTION 7(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 this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided 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 7(G). If, upon exercise of a Right, the calculation of the
Purchase Price and/or the number of shares of Common Stock to be issued upon
payment therefor depends upon the current market price per share of Common
Stock, such calculation shall be made with respect to the period through the
date upon which the Rights are duly
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<PAGE> 9
exercised. If at any time after the exercise date, the current market price (as
defined in Section 11(d) hereof) per share of Common Stock is lower than such
current market price at the date of exercise, the former holder of such Right
shall be entitled to an additional number of shares of Common Stock equal to the
difference between (i) the number of shares that would have been exercisable in
respect of such Right based on such lower current market price and (ii) the
number of shares theretofore issued in respect of such Right. Any such
additional number of shares shall be calculated and issued on a quarterly basis,
and the Company shall keep the records of former Rights holders and the Purchase
Prices paid by them as are necessary to effect calculation and delivery of such
shares.
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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. Reservation and Availability of Shares of Common Stock.
SECTION 9(A). The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock or its authorized and issued shares of Common Stock held in its treasury,
the number of shares of Common Stock that, as provided in this Agreement
including Section 11(a)(iii) hereof, will be sufficient to permit the exercise
in full of all outstanding Rights.
SECTION 9(B). So long as the shares of Common Stock issuable and
deliverable 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.
SECTION 9(C). The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the Securities Act of
1933 (the "Securities Act"), with respect to the securities purchasable upon
exercise of the 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 Securities Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration Date. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall notify the Rights Agent and issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as notice to the Rights Agent and a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights and notify the Rights Agent thereof until such time
as a registration statement has been declared effective, notice of which shall
be delivered to the Rights Agent. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained, the exercise thereof shall not be permitted under applicable law
or a registration statement shall not have been declared effective.
SECTION 9(D). The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
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<PAGE> 10
SECTION 9(E). 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 and of any certificates for a number of shares of 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 the issuance or delivery of
shares of Common Stock in respect of 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 a number of shares of 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 Certificates at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
SECTION 10. Common Stock Record Date. Each person in whose name any
certificate for a number of shares of Common Stock is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Common Stock represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be dated, the
next succeeding Business Day on which the Common Stock transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate 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.
SECTION 11(A)(I). In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding shares of Common Stock,
(C) combine the outstanding Common Stock into a smaller number of shares of
Common Stock, or (D) issue any shares of its capital stock in a reclassification
of the Common 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 Section
7(e) hereof, the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Common Stock or capital
stock, as the case may be, issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Common Stock or capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such
date and at a time when the Common Stock transfer books of the Company were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
SECTION 11(A)(II)(I). In the event:
any Person (other than the Company, any Subsidiary of the Company, an
employee benefit plan of the Company or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together with its Affiliates
and Associates, (A) shall consolidate or merge with or into the Company and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and Common Stock shall remain outstanding and unchanged, (B) who is an
Acquiring Person or becomes an Acquiring Person as a result of the transactions
described in this clause, shall, in one transaction or a series of transactions,
transfer any assets to the Company or to any of its Subsidiaries in exchange (in
whole or in part) for shares of Common Stock, for other equity securities of the
Company or any such Subsidiary, or for securities exercisable for or convertible
into shares of equity securities of the Company or any of its Subsidiaries
(whether Common Stock or otherwise) or otherwise obtain from the Company or any
of its
15
<PAGE> 11
Subsidiaries, with or without consideration, any additional shares of such
equity securities or securities exercisable for or convertible into such equity
securities (other than pursuant to a pro rata distribution to all holders of
Common Stock), or (C) shall, at any time after the date of this Agreement,
become an Acquiring Person, unless the event causing such Person to become an
Acquiring Person is a Section 13 Event (in which case the provisions of Section
13 shall apply),
then, promptly following ten (10) Business Days after the date of the first
occurrence of a Section 11(a)(ii) Event, proper provision shall be made so that
each holder of a Right (except as provided below and in Section 7(e) hereof)
shall thereafter have the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, 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 shares of Common Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement unless
and until further adjusted as provided in this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d) hereof) per share of Common
Stock on the date of such first occurrence (such number of shares, the
"Adjustment Shares").
SECTION 11(A)(II)(II). The provisions of this Section 11(a)(ii) shall not
apply to a Section 11(a)(ii) Event if the terms of such transaction treat all
holders of Common Stock equally and the terms of such transaction are approved
by the Board of Directors, prior to the first to occur of such Person or any of
its Affiliates or Associates (X) becoming an Acquiring Person or (Y)
consummating such transaction.
SECTION 11(A)(III). In the event that the number of shares of Common Stock
which are authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess, the "Spread"), and (B) with respect to each Right,
use its best efforts to either (W) make the necessary number of shares of Common
Stock available to permit the exercise in full of the Rights in accordance with
foregoing subparagraph (ii) of this Section 11(a) or (X) make the necessary
number of shares of Common Stock available to deliver the Spread in accordance
with this Section 11(a)(iii) or (Y) make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Purchase Price, shares, or
units of shares, of preferred stock, which the Board of Directors of the Company
has deemed to be substantially the economic equivalent of shares of Common Stock
(such shares of preferred stock, "Common Stock Equivalents"), and having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company, or (Z) to make the
necessary number of shares of Common Stock Equivalents available (which shall
have an aggregate value equal to the Spread, where such aggregate value has been
determined by the Board of Directors of the Company) to deliver the Spread in
accordance with this Section 11(a)(iii); provided, however, subject to the
Company's right to redeem the Rights pursuant to Section 23 herein, if the
Company shall not have made adequate provision to make the necessary number of
shares of Common Stock or Common Stock Equivalents available pursuant to clause
(B) above within thirty (30) days following the first occurrence of a Section
11(a)(ii) Event (such date being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to use its best efforts to
make adequate provisions to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of Common Stock (to
the extent available) which shares have an aggregate value equal to the Spread.
If the Board of Directors of the Company shall determine in good faith that it
is likely that sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, or payment in full of the
Spread, the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than one hundred fifty (150) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder approval
for the authorization of such additional shares (such period, as it may be so
extended, the "Substitution Period"). The Company covenants to use its best
efforts to obtain the necessary shareholder approval and effect the increase in
the number of authorized shares of Common Stock. To the extent that the Company
determines that some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence
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<PAGE> 12
and to determine the value thereof. In the event of any such suspension, the
Company shall notify the Rights Agent and issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
notice to the Rights Agent and a public announcement at such time as the
suspension is no longer in effect. To the extent that at the end of the
Substitution Period the Company is not able to deliver sufficient shares upon
exercise in full of the Rights or to provide payment in full of the Spread, the
obligation to provide payment in full of the Spread shall remain an obligation
of the Company (or in the event of a transaction as a result of which the
Company is not the surviving corporation, the surviving corporation), and the
Company shall use its best efforts to satisfy such obligation as soon as
feasible. Without limiting the generality of the foregoing, until such
obligation is satisfied in full, the Company shall use its best efforts to
obtain shareholder approval at each annual meeting of shareholders for an
increase in the number of authorized shares of Common Stock sufficient to permit
(at the Company's option) either (A) exercise in full of the Rights or (B)
payment in full of the Spread. If a Section 13 Event shall occur while such
obligation is outstanding, the rights of a holder of Rights under Section 13
shall supersede such obligation with respect to the Rights as to which the
Spread has not then been paid. In the event that shares constituting at least
10% of the aggregate Spread owed holders of Rights become available for
issuance, the Company shall make a pro-rata distribution to holders of Rights of
all available shares, as soon as practicable thereafter, but shall not be
required to make more than one such distribution in any twelve-month period. In
the event the Company takes any corporate action intended to, or adopts any plan
for, liquidation or dissolution, the obligation to pay the Spread shall be a
debt of the Company and the holders of Rights entitled to payment of the Spread
shall be creditors of the Company, and no liquidating dividend or other
distribution shall be paid to any holders of capital stock of the Company until
holders of Rights entitled to the Spread are first paid in full in cash. For
purposes of this Section 11(a)(iii), the value of the Common Stock shall be the
current market price per share of the Common Stock on the Section 11(a)(ii)
Trigger Date and the value of any Common Stock Equivalents shall be deemed to
have the same value as the Common Stock on such date. The provisions of this
Section 11(a)(iii) shall also apply to additional shares issuable from time to
time under Section 7(g) hereof, with the Current Value of such shares being the
current market value per share as of the end of the quarter in question. Holders
of Rights entitled to payment of the Spread shall be entitled receive the
benefits of the provisions of Section 11(o) hereof.
SECTION 11(B). In case the Company shall fix a record date for the
issuance of rights, option or warrants to all holders of Common Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Common Stock (or shares having the same
rights, privileges and preferences as the shares of Common Stock ("Equivalent
Common Stock")) or securities convertible into Common Stock or Equivalent Common
Stock at a price per share of Common Stock or per share of Equivalent Common
Stock (or having a conversion price per share, if a security convertible into
Common Stock or Equivalent Common Stock) less than the current market price (as
determined pursuant to Section 11(d) hereof) per share of Common 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 Common Stock outstanding on such record date, plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock and/or Equivalent Common Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Common Stock outstanding on such record
date, plus the number of additional shares of Common Stock and/or Equivalent
Common Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. Shares of
Common 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.
SECTION 11(C). In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, 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 Common Stock,
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<PAGE> 13
but including any dividend payable in stock other than Common Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of Common Stock
on such record date, less the fair market value (as determined in good faith by
the Board of Directors of the Company whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Common Stock and the denominator of which
shall be such current market price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
SECTION 11(D). For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), Section 13 or other provisions
hereof expressly providing otherwise, the "current market price" per share of
Common Stock on any date shall be deemed to be the lesser of (i) the average of
the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, or (ii) if there shall be an Acquiring Person, the lowest price
per share paid by the Acquiring Person at any time after it became an Acquiring
Person, and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per share of Common Stock on any date shall
be deemed to be the lesser of (x) the average of the daily closing prices per
share of such Common Stock for the ten (10) consecutive Trading Days immediately
following such date or (y) if there shall be an Acquiring Person, the lowest
price per share paid by the Acquiring Person at any time after it became an
Acquiring Person; provided, however, that in the event that the current market
price per share 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 (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, 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 appropriately 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 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 in good faith by the Board
of Directors of the Company shall be used. 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 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.
SECTION 11(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 one percent (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
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<PAGE> 14
be made to the nearest cent or to the nearest ten-thousandth of a share of
Common Stock or other share. 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 (3) years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
SECTION 11(F). If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Common Stock shall apply on like terms
to any such other shares.
SECTION 11(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 Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
SECTION 11(H). Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of shares 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.
SECTION 11(I). The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common 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 shares of Common 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 one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall notify the Rights Agent and make a public
announcement of its election to adjust the number of Rights, indicating the
record date of the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (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 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
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.
SECTION 11(J). Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common 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.
SECTION 11(K). Before taking any action that would cause an adjustment
reducing the Purchase Price below the then-stated value, if any, of the number
of shares of Common Stock 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
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<PAGE> 15
Company may validly and legally issue fully paid and nonassessable such number
of shares of Common Stock at such adjusted Purchase Price.
SECTION 11(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 issuance to the holder of any Right exercised after such record date
the number of shares of Common Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
shares of Common 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 (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
SECTION 11(M). Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance wholly for cash
of any shares of Common Stock at less than the current market price, (iii)
issuance wholly for cash of shares of Common Stock or securities which by their
terms are convertible into or exchangeable for shares of Common Stock, (iv)
stock dividends or (v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of its Common Stock
shall not be taxable to such shareholders.
SECTION 11(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), (ii) merge with or into any other Person
(other than a Subsidiary of the Company) 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),
if (x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially 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
shareholders 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; provided however, this Section 11(n) shall not affect the ability of
any subsidiary of the Company to consolidate with, merge with or into, or sell
or transfer assets or earning power to, any other Subsidiary of the Company.
SECTION 11(O). Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of Common Stock into a smaller number of
shares, 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 of the
numerator 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.
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section 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
Common Stock, a copy of such certificate, and (c) promptly after the
Distribution Date, mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25
hereof. The Rights Agent shall be fully authorized to rely on and be protected
in relying on any such certificate and on any adjustment therein contained and
shall be deemed not to have knowledge of any adjustment unless and until it
shall have received such certificate.
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<PAGE> 16
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
SECTION 13(A). In the event that, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company) shall consolidate with, or merge with or into,
the Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise 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 Person or Persons (other than the Company
or any Subsidiary of the Company) then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter 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 of validly authorized and issued, fully paid, nonassessable and freely
tradable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of Common
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such
shares for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement) by
(2) 50% of the current market price per share of the Common Stock of such
Principal Party on the date of consummation of such Section 13 Event; for
purposes of this Section 13(a), the "current market price" per share of Common
Stock on any date shall be deemed to be the lesser of (a) the average of the
daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to the date of the consummation of
the Section 13 Event or (b) the closing price per share of such Common Stock on
the last Trading Day before the consummation of a Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, 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 only to such Principal Party following the first
occurrence of a Section 13 Event; (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 connection with the consummation of any such
transaction 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;
and (v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
SECTION 13(B). "Principal Party" shall mean
SECTION 13(B)(I). in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), (A) 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, or, if there is more
than one such issuer, the issuer of Common Stock that has the highest
aggregate current market price (determined pursuant to Section 13(b)(iii)
below) and (B) if no securities are so issued, the Person that is the other
party to such merger or consolidation or, if there is more than one such
Person, the Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 13(b)(iii) below); and
SECTION 13(B)(II). in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power transferred pursuant to such transaction or
transactions or if the Person receiving the largest portion of the assets
or earning power cannot be determined, whichever Person the Common Stock of
which has the highest aggregate current market price (determined pursuant
to Section 13(b)(iii) hereof);
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<PAGE> 17
SECTION 13(B)(III). for purposes of this Section 13(b), "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 thirty (30) consecutive Trading Days immediately prior to such date;
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 twelve (12)
month period registered under Section 12 of the Exchange Act ("Registered Common
Stock"), or if such Person is not a corporation, and such Person is a direct or
indirect Subsidiary of another Person that has Registered Common Stock
outstanding, "Principal Party" shall refer to such other Person; (2) if the
Common Stock of such Person is not Registered Common Stock or such Person is not
a corporation, and such Person is a direct or indirect Subsidiary of another
Person but is not a direct or indirect Subsidiary of another Person which has
Registered Common Stock outstanding, "Principal Party" shall refer to the
ultimate parent entity of such firstmentioned Person; (3) if the Common Stock of
such Person is not Registered Common Stock or such Person is not a corporation,
and such Person is directly or indirectly controlled by more than one Person,
and one or more of such other Persons has Registered Common Stock outstanding,
"Principal Party" shall refer to whichever of such other persons is the issuer
of the Registered Common Stock having the highest aggregate current market price
(determined pursuant to Section 13(b)(iii) hereof); and (4) if the Common Stock
of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one Person, and none of such other Persons have Registered Common Stock
outstanding, "Principal Party" shall refer to whichever ultimate parent entity
is the corporation having the greatest shareholders equity or, if no such
ultimate parent entity is a corporation, shall refer to whichever ultimate
parent entity is the entity having the greatest net assets.
SECTION 13(C). The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
SECTION 13(C)(I). prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing, (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date and (C) as soon as practicable following the execution of
such agreement, take such action as may be required to ensure that any
acquisition of such Common Stock upon the exercise of the Rights complies
with any applicable state security or "blue sky" laws; and
SECTION 13(C)(II). will deliver to holders of the Rights financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
SECTION 13(D). In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation of By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the current
market price per share (determined pursuant to Section 13(b)(iii) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than the then current market price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provision of Section 13; then in such
event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall
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<PAGE> 18
have been canceled, waived or amended, or that the authorized securities shall
be redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
SECTION 13(E). Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraph
(x), (y) and/or (z) of Section 13(a) if the terms of such transaction treat all
holders of Common Stock equally and are approved by the Board of Directors at
any time prior to the first to occur of (i) the Principal Party (or any of its
Affiliates or Associates) becoming an Acquiring Person or (ii) the consummation
of such transaction. Upon consummation of any such transaction contemplated BY
this Section 13(e), all Rights hereunder shall expire.
SECTION 14. Fractional Rights and Fractional Shares.
SECTION 14(A) The Company shall not be required to issue fractions of
Rights 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 purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported 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 the selected by the Board of Directors of the Company. If on any
such date no such market maker is making a market in the Rights, the fair value
of the Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used. The Company shall promptly notify the Rights Agent
of any such determination of current market value.
SECTION 14(B). The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of fractional shares
of Common Stock, the Company may pay to the registered holders of Rights
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 shares of
Common Stock. For purposes of this Section 14(b), the current market value of a
share of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to Section 13(b)(iii) hereof) for the Trading Day
immediately prior to the date of such exercise.
SECTION 14(C). 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 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action of the Rights Agent or the Company with
respect to each of their rights hereunder against the other, 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.
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<PAGE> 19
SECTION 16. 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:
SECTION 16(A). prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
SECTION 16(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 or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
SECTION 16(C). subject to Section 6(a) 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, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice or knowledge
to the contrary; and
SECTION 16(D). notwithstanding anything in this Agreement to the contrary,
(i) the Rights Agent shall have no liability to the holder of a Right or other
Person (other than the Company) and (ii) the Company shall have no liability to
any holder of 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 must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
SECTION 17. Rights Certificate Holder Not Deemed 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 number of shares of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any 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 24 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 hereof.
SECTION 18. Concerning the Rights Agent.
SECTION 18(A). 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 disbursements incurred in the negotiation,
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
negotiation, acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability in the premises.
SECTION 18(B). The Rights Agent shall be authorized to rely upon and 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 negotiation, execution and
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 to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.
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<PAGE> 20
SECTION 19(A). Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a 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 and in this Agreement.
SECTION 19(B). 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
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
SECTION 20(A). The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
SECTION 20(B). Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") 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 Vice Chairman of the Board, the President, any
Vice President, and by the Treasurer, any Assistant Treasurer, the Controller or
any Assistant Controller, or the General Counsel 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 certificates.
SECTION 20(C). The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
SECTION 20(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 or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
SECTION 20(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 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 Section 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 by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
25
<PAGE> 21
SECTION 20(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.
SECTION 20(G). The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Vice Chairman of the Board, the President or any Vice
President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant
Treasurer, the Controller, any Assistant Controller or the General Counsel of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
SECTION 20(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.
SECTION 20(I). The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
SECTION 20(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 unless it shall first have been indemnified to its satisfaction.
SECTION 20(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 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 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent (of which the Rights Agent has been notified) of the Common
Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (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, by registered or certified mail, and 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 thirty (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 any 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 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 or other financial institution in the State of New York),
in good standing, having a principal office in the State of New York, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. 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
26
<PAGE> 22
transfer agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. However failure to appoint a
successor Rights Agent within the thirty (30) day period or to give any notice
provided for in this Section 21, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
SECTION 22. Issuance of New 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 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. The
Company shall promptly notify the Rights Agent of its decision to issue such
new certificates. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options granted or awarded on or before the Distribution Date, or under any
employee plan or arrangement adopted on or before the Distribution Date, or
upon the exercise, conversion or exchange of securities hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Rights Certificate would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. Redemption and Termination.
SECTION 23(A). The Board of Directors of the Company may, at its option,
at any time prior to the Final Expiration Date, redeem all but not less than all
the then outstanding Rights at a redemption price of $.Ol per Right, as such
amount may be 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").
Without limiting the foregoing, the Company may so elect to redeem if at
least one of the following circumstances shall then apply:
SECTION 23(A)(I). A Person, other than the Acquiring Person whose
acquisitions of Common Stock caused the Stock Acquisition Date to occur, or
a Person whose commencement of a tender or exchange offer has caused the
Distribution Date to occur shall have offered (or agreed with the Company
to offer) to acquire, by purchase, exchange or any form of business
combination, any and all outstanding shares of Common Stock at a price
which is higher than the highest price paid or offered for the Common Stock
by the initial Acquiring Person or such other Person. (If any relevant
price is not payable, or to be paid, entirely in cash, the Board of
Directors of the Company shall determine the total cash value of such
price.)
SECTION 23(A)(II). An Acquiring Person shall have become the
Beneficial owner of more than 90% of the then outstanding Common Stock.
SECTION 23(A)(III). The redemption shall have been approved by the
Board of Directors.
Notwithstanding anything in this Agreement to the contrary, as provided in
Section 7(a)(ii) hereof, the Board of Directors may elect to delay the
Distribution Date and/or the date on which the Rights may first be exercised.
The Company may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the "current market price", as defined in Section 11(d)
hereof, of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
SECTION 23(B). Immediately upon the action 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 for
each Right so held. Promptly after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at each holder's last address as it appears 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. The Rights Agent
may rely on notice as to
27
<PAGE> 23
compliance with the conditions in Section 23(a). 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.
SECTION 23(C). For purposes of this Section 23 and this entire Agreement,
any director of the Company shall be prima facie "interested" in the Acquiring
Person and in any redemption if such director is an Associate, Affiliate,
partner, relative, employee or agent of, or person receiving indemnity
protection from the Acquiring Person.
SECTION 24. Notice of Certain Events.
SECTION 24(A). In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Common Stock or to make any other distribution to the holders of
Common Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company) or (ii) to offer to the holders of Common
Stock rights or warrants to subscribe for or to purchase any additional shares
of Common Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company), 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 transaction or a series of related 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 Persons (other than the Company and/or
any of its Subsidiaries), or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 25 hereof, and to the Rights Agent, 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 Common 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 (i) or (ii) above at least twenty (20) days prior to the record date for
determining holders of the shares of Common Stock for purposes of such action,
and in the case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Common Stock, whichever shall be the earlier.
In case any Section 11(a)(ii) Event shall occur, then, in any such case,
(i) the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, and to the Rights Agent, a notice of the occurrence of such event.
SECTION 25. 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:
General Host Corporation
22 Gate House Road
P.O. Box 10045
Stamford, Connecticut 06904
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any 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:
Manufacturers Hanover Trust Company
450 West 33rd Street
New York, New York 10001
Attention: Vice President, Administration
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<PAGE> 24
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 (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock ) 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 26. Supplements and Amendments. Subject to the third sentence of
this Section 26, the Company and the Rights Agent, from time to time shall, if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of Rights. Upon 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 26, the
Rights Agent shall execute such amendment or supplement; provided, however, the
Rights Agent shall not be obligated to effect any amendment which adversely
affects any of its rights under Section 18 hereof. Notwithstanding anything
contained in this Agreement to the contrary, from and after the date upon which
the Rights are first exercisable, no supplement or amendment shall be made which
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of shares of Common Stock for which a Right is exercisable. Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
SECTION 27. 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 28. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the Company
shall have the exclusive power and authority to administer this 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). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board in good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board of Directors to any liability to the holders of
the Rights.
SECTION 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of 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, registered holders of the Common Stock).
SECTION 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
SECTION 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts made
and to be performed entirely within such state.
SECTION 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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<PAGE> 25
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.
<TABLE>
<S> <C>
Attest: GENERAL HOST CORPORATION
By William F. Downey By Robert M. Lovejoy, Jr.
Name: Name:
Title: Title:
(Corp. Seal)
Attest: MANUFACTURERS HANOVER TRUST COMPANY
By By
Name: Patricia Hoffmann Name: William R. Hogan
Title: Assistant Vice President Title: Vice President
(Corp. Seal)
</TABLE>
30
<PAGE> 26
EXHIBIT 2
EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
CERTIFICATE NO. R ----------------------------------- RIGHTS
NOT EXERCISABLE AFTER MARCH 7, 1995 OR EARLIER IF REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.Ol PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. (THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH RIGHTS AGREEMENT.]
RIGHTS CERTIFICATE
GENERAL HOST CORPORATION
This certifies that , or
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of March 7, 1990
(the "Rights Agreement"), between General Host Corporation, a New York
corporation (the "Company"), and Manufacturers Hanover Trust Company, a New York
corporation (the "Rights Agent"), to purchase from the Company at any time prior
to 5:00 P.M. (New York City time) on March 7, 1995 at the office or offices of
the Rights Agent designated for such purpose, or its successors as Rights Agent,
one share of Common Stock (the "Common Stock") of the Company, at a purchase
price of $60 per share (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related
Certificate 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 per share set forth above, are
the number and Purchase Price as of March 7, 1990, based on the Common Stock as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event and/or a Section 13 Event
(as such terms are defined in the Rights Agreement), if the Rights evidenced by
this Rights Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event or Section 13 Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Common 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, including
Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms 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, which limitations of rights include
the temporary suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights
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<PAGE> 27
Agreement. Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written request to the
Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged 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 Common 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 in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
SUBJECT TO THE PROVISIONS OF THE RIGHTS AGREEMENT, THE RIGHTS EVIDENCED BY
THIS CERTIFICATE MAY BE REDEEMED BY THE COMPANY AT ITS OPTION AT A REDEMPTION
PRICE OF $.01 PER RIGHT.
Upon the exercise of any Right or Rights evidenced hereby, a cash payment
may be made in lieu of issuance of fractional shares of Common Stock, as
provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Common Stock or
of any other securities the Company which may at any time be issued upon
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
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.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of March 7, 1990
<TABLE>
<S> <C>
ATTEST: GENERAL HOST CORPORATION
___________________________________________ By ___________________________
Secretary Title:
Countersigned:
MANUFACTURERS HANOVER TRUST COMPANY
By ________________________________________
Authorized Signature
Date of Countersignature: __________________
</TABLE>
32
<PAGE> 28
[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:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) 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);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidences 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
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate 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.
33
<PAGE> 29
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Rights
Certificate.)
To: GENERAL HOST CORPORATION
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to purchase the shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
------------------------------------ , 19
---------
-------------------------------------------
Signature
Signature Guaranteed:
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) 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 became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
------------------------------------ , 19
---------
-------------------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate 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.
34
<PAGE> 30
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
1. On February 22, 1990, the Board of Directors of General Host
Corporation (the "Company") declared a dividend distribution of one Right for
each outstanding share of the Company's Common Stock, $1.00 par value per share
(the "Common Stock"), to shareholders of record at the close of business on
March 7, 1990. Such dividend distribution replaces the rights distributed
pursuant to a previous rights agreement (the "Previous Rights Agreement"), which
expired as of the close of business on March 7, 1990. Each Right entities the
registered holder, upon the occurrence of certain events, to purchase from the
Company one share of Common Stock at a Purchase Price of $60 per Share, subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Manufacturers Hanover
Trust Company, as Rights Agent. Capitalized terms not defined in this Summary
shall have the respective meanings given in the Rights Agreement.
2. Initially, the Rights will be represented by the Common Stock
certificates and no separate Rights Certificates will be distributed until the
Distribution Date. Until the Distribution Date, (a) the Rights will be evidenced
by the Common Stock certificates and will be transferred only with such Common
Stock certificates, (b) new Common Stock certificates issued after March 7,1990
will contain a legend incorporating the new Rights Agreement by reference and
(c) the surrender for transfer of any certificate for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. Stock certificates legended pursuant to the
Previous Rights Agreement shall represent Rights granted pursuant to the present
Rights Agreement.
3. Unless a later date is determined by action of the Board of
Directors, the Distribution Date will occur on the close of business on the
tenth business day after the first to occur of
(i) the commencement of a tender offer or exchange offer that would,
if completed, result in a person or group of affiliated or associated persons
beneficially owning 20% or more of such outstanding shares of Common Stock,
(ii) a public announcement that a person or group of affiliated or
associated persons has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common Stock,
(iii) the consolidation or merger of any entity with or into the Company
where the Company is the surviving corporation, and the Common Stock remains
unchanged,
(iv) the transfer, by the beneficial owner of 20% or more of the
outstanding shares of Common Stock or by a person who would, as a result of such
transaction, become the beneficial owner of 20% or more of the outstanding
shares of Common Stock, of any assets to the Company in exchange for shares of
equity securities of the Company,
(v) the consolidation or merger of any entity with or into the Company
where the Company is the surviving corporation and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
is changed into or exchanged for securities of any other entity, or cash or
other property,
(vi) the consolidation or merger of the Company with or into another
entity where the Company is not the surviving corporation, or
(vii) the sale or transfer by the Company of assets or earning power
aggregating more than 50% of the assets or earning power of the Company.
4. The Rights are not exercisable until the Distribution Date (unless a
later date is determined by action of the Board of Directors) and will expire at
the close of business on March 7, 1995, unless 00 earlier redeemed by the
Company as described below.
5. As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise provided in
the Rights Agreement or determined by the Board of Directors, only shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
35
<PAGE> 31
6. Unless the transaction is approved in advance by the Board of
Directors, upon the occurrence of any of the events listed as subparagraphs
(ii), (iii) or (iv) in paragraph 3 above, each holder of a Right (except Rights
voided as set forth in paragraph 8 below) will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, other
securities of the Company or other consideration) at 50% of the then market
price.
7. Unless the transaction is approved in advance by the Board of
Directors, upon the occurrence of any of the events listed as subparagraphs (v),
(vi) or (vii) in paragraph 3 above, each holder of a Right (except Rights voided
as set forth in paragraph 8 below) will thereafter have the right to receive,
upon exercise, common stock of the acquiring company at 50% of the then market
price.
8. So long as permitted by applicable law, upon the occurrence of any of
the events set forth in subparagraphs (ii) through (vii) of paragraph 3 above,
all Rights beneficially owned by any Acquiring Person will be null and void, and
therefore the Acquiring Person and any transferee of the Acquiring Person will
not be able to purchase shares at a 50% discount.
9. The Purchase Price payable, and the number of shares of Common 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
Common Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends).
10. At any time, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.
11. Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
12. The Board of Directors of the Company may supplement or amend any
provision of the Rights Agreement; PROVIDED, HOWEVER, that after the date upon
which the Rights are first exercisable, no supplement or amendment shall be made
which changes the redemption price, the final expiration date of the Rights, the
Purchase Price or the number of shares of Common Stock for which a Right is
exercisable.
13. The Board of Directors of the Company may, at any time, delay the
Distribution Date and/or the date upon which the Rights first become
exercisable.
14. A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Rights Agent.
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.
36
<PAGE> 1
EXHIBIT (1)(a)
Amendment No. 1 dated as of March 1, 1995 (this "Amendment") between
General Host Corporation, a New York corporation (the "Company"), and Chemical
Bank, a New York banking corporation, as successor to Manufacturers Hanover
Trust Company, as Right Agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Rights Agent entered into the Rights
Agreement dated as of March 7, 1990 with respect to the distribution of certain
Rights to purchase shares of Common Stock of the Company (the "Agreement", with
all capitalized terms used but not defined herein having the same meanings
ascribed to such terms therein);
WHEREAS, Section 26 of the Agreement provides that the Company and the
Rights Agent may, except in certain specified instances, amend the Agreement
without the approval of any holders of Rights;
WHEREAS, Rights granted pursuant to the Agreement not exercised by the
close of business on March 7, 1995 (the "Final Expiration Date") expire
pursuant to the terms of the Agreement on such date;
WHEREAS, on March 1, 1995, the Board of Directors of the Company
authorized and directed the officers of the Company to enter into an amendment
to the Agreement to provide for the extension of the Final Expiration Date from
March 7, 1995 to March 7, 2000 and certain other matters;
NOW THEREFORE, in consideration of good and valuable consideration, the
parties hereto agree as follows:
Section 1. Amendment to the Agreement.
(a) AMENDMENT TO NAME AND ORGANIZATIONAL FORM OF RIGHTS AGENT. The
Agreement, including all exhibits thereto, is hereby amended by (i) deleting
all references therein to "Manufacturers Hanover Trust Company" and inserting
in lieu thereof "Chemical Bank" and (ii) deleting all references therein to the
organizational form of the Rights Agent as a "New York corporation" and
inserting in lieu thereof "a New York banking corporation."
(b) AMENDMENT TO SECTION 7(A)(I). Section 7(a)(i) of the Agreement is
hereby amended by deleting the reference therein to "March 7, 1995" and
inserting in lieu thereof "March 7, 2000".
<PAGE> 2
(c) AMENDMENT TO SECTION 25. Section 25 of the Agreement is hereby
amended by deleting the address of General Host Corporation set forth therein
and inserting in lieu the following address:
"General Host Corporation
6501 East Nevada
Detroit, Michigan 48234
Attention: Corporate Secretary",
and by deleting the address of the Rights Agent set forth therein and inserting
in lieu thereof the following address:
"Chemical Bank
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: James McNellage,
Assistant Vice President"
(d) AMENDMENT TO FORM OF RIGHTS CERTIFICATE. The form of Rights
Certificate attached to the Agreement as Exhibit A is hereby amended by
deleting all references therein to "March 7, 1995" and inserting in lieu
thereof "March 7, 2000".
Section 2. Miscellaneous.
(a) SEVERABILITY. If any term, provision, covenant or restriction of
this Amendment 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 Amendment shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
(b) GOVERNING LAW. This Amendment shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
governed by and construed in accordance with the laws of such state applicable
to contracts made and to be performed entirely within such state.
(c) COUNTERPARTS. This Amendment may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
(d) DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Amendment are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
- 2 -
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the date and year first above written.
Attest: GENERAL HOST CORPORATION
By: Mark A. Grobbel By: James R. Simpson
-------------------------- -------------------------
Name: Mark A. Grobbel Name: James R. Simpson
Title: Assistant Secretary Title: Vice President &
Controller
(Corp. Seal)
Attest: CHEMICAL BANK
By: James S. McNellage By: Barbara Y. Hall
-------------------------- -------------------------
Name: James S. McNellage Name: Barbara Y. Hall
Title: Assistant Vice President Title: Vice President
(Corp. Seal)
- 3 -
