SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
HANNAFORD BROS. CO.
(Exact name of registrant as specified in its charter)
Maine 01-0085930
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
145 Pleasant Hill Road, Scarborough, Maine 04074
(Address of principal executive offices) (Zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
-------------------- ------------------------------
Rights to Purchase New York Stock Exchange
Series A Junior Participating
Preferred Stock
If this Form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box: [X]
If this Form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box: [ ]
Securities Act registration statement
file number to which this form relates: Not Applicable
Securities to be registered pursuant to Section 12(g) of the Act: None
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
HANNAFORD BROS. CO.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On December 16, 1997, the Board of Directors of Hannaford Bros. Co.
(the "Company") declared a dividend distribution of one Preferred Stock
Purchase Right for each outstanding share of common stock, par value $0.75
per share (the "Common Stock"), of the Company. The distribution is payable
to stockholders of record on the record date of February 4, 1998. Each
Right entitles the registered holder to purchase from the Company one
one-hundredth (1/100) of a share of preferred stock of the Company,
designated as Series A Junior Participating Preferred Stock (the "Series A
Preferred Stock") at a price of $60 per one one-hundredth (1/100) of a
share ("Purchase Price"). The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company
and Continental Stock & Transfer Company, as Rights Agent (the "Rights
Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will
automatically trade with the Common Stock.
Until the close of business on the tenth day following the earlier to
occur of (i) a public announcement that a person or group of affiliated or
associated persons ("Acquiring Person"), other than (A) the Company, (B)
any employee benefit plan or employee stock plan of the Company or of any
subsidiary of the Company, (C) any of the Sobey Parties provided that the
Sobey Agreement (as defined in the Rights Agreement) is in effect and their
ownership of shares of Voting Stock (as defined in the Rights Agreement) of
the Company is in accordance with the terms of the Sobey Agreement, in
which case the Sobey Parties shall constitute an Acquiring Person after the
termination of the Sobey Agreement if thereafter they increase their
aggregate percentage beneficial ownership of shares of Voting Stock by more
than 1% of the Voting Stock of the Company then outstanding over the
percentage of Voting Stock owned by them immediately prior to the
termination of the Sobey Agreement (except if at the time immediately prior
to the termination of the Sobey Agreement the Sobey Parties were not the
owners of 20% or more of the shares of Voting Stock then outstanding, in
which case the Sobey Parties will become an Acquiring Person upon the
occurrence of such event), (D) any person whose ownership of 20% or more of
the shares of Voting Stock then outstanding results from the purchase of
shares from the Company or from a purchase arranged by the Company, in
which case such Person shall constitute an Acquiring Person after any such
<PAGE>
purchase if it increases its percentage beneficial ownership of shares of
Voting Stock of the Company by more than 1% of the Voting Stock of the
Company then outstanding over the percentage beneficially owned by it
immediately after giving effect to such purchase, except as the result of
subsequent purchases from or arranged by the Company or (E) any person
whose beneficial ownership of shares of Voting Stock of the Company is
increased to 20% or more of the shares of Voting Stock then outstanding
solely by reason of a repurchase or repurchases by the Company of, or an
exchange offer or offers by the Company for, outstanding shares of Voting
Stock of the Company, in which case such person shall constitute an
Acquiring Person after any such repurchases or exchange offers if such
person increases its percentage beneficial ownership of shares of Voting
Stock by more than 1% of the Voting Stock of the Company then outstanding
over the percentage beneficially owned by it immediately after giving
effect to such repurchase or exchange offer, except as a result of any
subsequent repurchases or exchange offers by the Company, has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the
shares of Voting Stock then outstanding or (ii) the commencement of, or
public announcement of an intention to make, a tender or exchange offer
(other than a tender or exchange offer by the Company, or any employee
benefit plan of the Company or of any subsidiary of the Company) whose
consummation would result in the ownership of 30% or more of the shares of
Voting Stock then outstanding, even if no purchases actually occur pursuant
to such offer (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common
Stock certificates outstanding as of February 4, 1998, by such Common Stock
certificate with a copy of this Summary of Rights attached thereto. The
Rights Agreement provides that, until the Distribution Date, the Rights
will be represented by and transferred with, and only with, the Common
Stock. Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Stock certificates issued after February 4, 1998
will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any of the Common Stock certificates
outstanding as of February 4, 1998 with or without a copy of this Summary
of Rights attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon
as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the Distribution
Date and such separate certificates alone will evidence the Rights from and
after the Distribution Date.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on February 4, 2001, unless earlier
redeemed by the Company as described below.
<PAGE>
The Series A Preferred Stock is nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of
preferred stock, subordinate to any other series of the Company's preferred
stock. Series A Preferred Stock may not be issued except upon exercise of
Rights. Each share of Series A Preferred Stock will be entitled to receive
when, as and if declared, a quarterly dividend in an amount equal to the
greater of $13.50 per share or 100 times the cash dividends declared on the
Company's Common Stock. In addition, the Series A Preferred Stock is
entitled to 100 times any non-cash dividends or other non-cash
distributions (other than dividends payable in equity securities) declared
on the Common Stock, in like kind. In the event of the liquidation of the
Company, the holders of the Series A Preferred Stock will be entitled to
receive a liquidation payment per share in an amount equal to the greater
of $6,000 or 100 times the payment made per share of Common Stock. Each
share of Series A Preferred Stock will have 100 votes, voting together with
the Common Stock. In the event of any merger, consolidation or other
transaction in which common shares are exchanged, each share of Series A
Preferred Stock will be entitled to receive 100 times the amount received
per share of Common Stock. The rights of the Series A Preferred Stock as to
dividends, liquidation and voting are protected by antidilution provisions.
The number of shares of Series A Preferred Stock issuable upon
exercise of the Rights are subject to certain adjustments from time to time
in the event of a stock dividend on, or a subdivision or combination of,
the Common Stock. The Purchase Price is subject to adjustment in the event
of extraordinary distributions of cash or other property to holders of
Common Stock.
Unless the Rights are earlier redeemed, in the event that, after the
Rights have become exercisable, the Company were to be acquired in a merger
or other business combination (in which any shares of the Common Stock are
changed into or exchanged for other securities or assets) or more than 50%
of the assets or earning power of the Company and its subsidiaries (taken
as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be
made so that each holder of record of a Right will from and after such date
have the right to receive, upon payment of the Purchase Price, that number
of shares of common stock of the acquiring company having a market value at
the time of such transaction equal to two times the Purchase Price. In
addition, unless the Rights are earlier redeemed, in the event that the
Company were to be the surviving corporation in a merger or other business
combination with an Acquiring Person and the Common Stock remained
outstanding (none of which shares were changed into or exchanged for other
securities or assets), or in the event that an Acquiring Person engages in
one of a number of other self-dealing transactions specified in the Rights
Agreement, or in the event that any person (other than any person excluded
from the definition of Acquiring Person) shall beneficially own 30% or more
<PAGE>
of the Company's Voting Stock, which shares shall be acquired through a
transaction or series of transactions which shall not have been approved by
a majority of the Independent Directors, the Rights Agreement provides that
proper provisions will be made so that each holder of record of a Right,
other than the Acquiring Person (whose Rights will thereupon become null
and void), will thereafter have the right to receive, upon payment of the
Purchase Price, that number of shares of the Series A Preferred Stock
having a market value at the time of the transaction equal to two times the
Purchase Price.
Fractions of shares of Series A Preferred Stock may, at the election
of the Company, be evidenced by depositary receipts. The Company may also
issue cash in lieu of fractional shares which are not integral multiples of
one-hundredth of a share.
At any time on or prior to the close of business on the tenth day
after a public announcement that a person has become an Acquiring Person,
the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). Immediately upon the action of the
Board of Directors of the Company authorizing redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire
the Company on terms not approved by the Board of Directors, unless the
offer is conditioned on a substantial number of Rights being acquired.
However, the Rights should not interfere with any merger or other business
combination approved by the Board of Directors, since the Rights may be
redeemed by the Company as described above. Thus, the Rights are intended
to encourage persons who may seek to acquire control of the Company to
negotiate the terms of the acquisition with the Board of Directors.
However, the Rights could have the effect of discouraging a third party
from making a partial tender offer for the Company's voting stock, or
otherwise attempting to obtain a substantial equity position in the
Company.
The foregoing summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, a copy of which is filed as Exhibit 4.1 hereto.
<PAGE>
Item 2. Exhibits.
4.1 Rights Agreement, dated as of December 16, 1997, between
the Company and Continental Stock Transfer & Trust Company
(including the form of Rights Certificate)
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.
HANNAFORD BROS. CO.
By: /s/ Charles H. Crockett
---------------------------
Charles H. Crockett
Assistant Secretary
Date: January 28, 1998
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
4.1 Rights Agreement, dated as of December 16, 1997, between
the Company and Continental Stock Transfer & Trust Company
(including the form of Rights Certificate)
Exhibit 4.1
HANNAFORD BROS. CO.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
as Rights Agent
Rights Agreement
Dated as of December 16, 1997
<PAGE>
RIGHTS AGREEMENT
Rights Agreement, dated as of December 16, 1997 (the "Agreement"), by
and between HANNAFORD BROS. CO., a Maine corporation (the "Company"), and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York banking organization
(the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on December 16, 1997, the Board of Directors of the Company
authorized the issuance of, and declared a dividend payable in, one right
(a "Right") for each share of Common Stock, $0.75 par value per share, of
the Company outstanding as of the close of business on February 4, 1998
(the "Record Date"), each such Right representing the right to purchase one
one-hundredth of a share of Series A Junior Participating Preferred Stock
of the Company ("Preferred Stock") having the rights and preferences set
forth in the form of Certificate of Designations attached hereto as Exhibit
C authorized by the Board of Directors on December 16, 1997, upon the terms
and subject to the conditions hereinafter set forth; and
WHEREAS, each share of Common Stock which may be issued between the
Record Date and the earlier to occur of the Expiration Date or the Final
Expiration Date (as such terms are hereinafter defined) will be issued with
an attached Right;
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 shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates
(as such term is hereinafter defined) and Associates (as such term
is hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 20% or more of the
shares of Voting Stock (as such term is hereinafter defined) of
the Company then outstanding; provided, however, that an Acquiring
Person shall not include (i) an Exempt Person (as such term is
hereinafter defined), (ii) any of the Sobey Parties (as such term
is hereinafter defined), provided that the Sobey Agreement (as
such term is hereinafter defined) is in effect and their ownership
of shares of Voting Stock is in accordance with the terms of the
Sobey Agreement, in which case any Sobey Party shall constitute an
Acquiring Person after the termination of the Sobey Agreement if
thereafter such Sobey Party increases its Beneficial Ownership of
shares of Voting Stock of the Company over the percentage of
<PAGE>
Voting Stock Beneficially Owned by it immediately prior to the
termination of the Sobey Agreement and the Sobey Parties increase
their aggregate percentage Beneficial Ownership of shares of Voting
Stock, by more than 1% of the Voting Stock of the Company then
outstanding, over the percentage of Voting Stock Beneficially Owned by
them immediately prior to the termination of the Sobey Agreement,
except if at the time immediately prior to the termination of the
Sobey Agreement such Sobey Party was not the Beneficial Owner of 20%
or more of the shares of Voting Stock then outstanding, in which case
such Sobey Party shall become an Acquiring Party upon the occurrence
of such event, (iii) any Person whose Beneficial ownership of 20% or
more of the shares of Voting Stock of the Company then outstanding
results from the purchase of shares of Voting Stock from the Company
or from a purchase arranged by the Company, in which case such Person
shall constitute an Acquiring Person after any such purchase if it
increases its percentage Beneficial Ownership of shares of Voting
Stock of the Company, by more than 1% of the Voting Stock of the
Company then outstanding, over the percentage Beneficially Owned by it
immediately after giving effect to such purchase, except as the result
of subsequent purchases from or arranged by the Company or (iv) any
Person whose Beneficial Ownership of shares of Voting Stock of the
Company is increased to 20% or more of the shares of Voting Stock of
the Company then outstanding solely by reason of a repurchase or
repurchases by the Company of, or an exchange offer or offers by the
Company for, outstanding shares of Voting Stock of the Company, in
which case such Person shall constitute an Acquiring Person after any
such repurchases or exchange offers if such Person increases its
percentage Beneficial Ownership of shares of Voting Stock of the
Company, by more than 1% of the Voting Stock of the Company then
outstanding, over the percentage Beneficially Owned by it immediately
after giving effect to such repurchase or exchange offer, except as a
result of any subsequent repurchases or exchange offers by the
Company.
(b) An "Affiliate" of a specified Person (as such term is
hereinafter defined) shall mean a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or
is under common control with, the specified Person; provided, however,
that an Exempt Person shall not be deemed to be an Affiliate of any
Person that is not an Exempt Person.
(c) "Associate" of a Person shall mean (i) with respect to a
corporation, any officer or director thereof or of any Subsidiary (as
such term is hereinafter defined) thereof, or any Beneficial Owner (as
such term is hereinafter defined) of 10% or more of any class of
equity securities thereof, (ii) with respect to an association, any
officer or director thereof or of a Subsidiary thereof, (iii) with
<PAGE>
respect to a partnership, any general partner thereof or any limited
partner thereof who is, directly or indirectly, the Beneficial Owner
of at least a 10% ownership interest therein, (iv) with respect to a
business trust, any officer or trustee thereof or of any Subsidiary
thereof, (v) with respect to any other trust or an estate, any
trustee, executor or similar fiduciary or any Person who has a 20% or
greater interest as a beneficiary in the income from or principal of
such trust or estate, (vi) with respect to a natural person, any
relative or spouse of such person, or any relative of such spouse, who
has the same home as such person, and (vii) any Affiliate of such
Person; provided, however, that for the purposes of this Agreement,
no Person that is excluded from the definition of Acquiring Person
shall be deemed to be an Associate of any other Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities:
(i) which such Person or any of such Person's
Affiliates beneficially owns, directly or indirectly, for
purposes of Section 13(d) of the Exchange Act and Regulation
13D-G thereunder (or any comparable or successor law or
regulation); and
(ii) which such Person or any of such Person's
Affiliates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or
the fulfillment of one or more conditions or both) pursuant to
any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, other rights
(other than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own", securities
tendered pursuant to a tender or exchange offer made by such
Person or any of such person's Affiliates until such tendered
securities are accepted for purchase or exchange or (B) the
right to vote, alone or in concert with others, 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
securities if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or
consent given in response to a proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules
and regulations under the Exchange Act and (2) is not at the
time reportable by such Person on a Schedule 13D report under
the Exchange Act (or any comparable or successor report),
other than by reference to a proxy or consent solicitation
being conducted by such Person; or
<PAGE>
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's
Affiliates has any agreement, arrangement or understanding (whether
or not in writing) for the purpose of acquiring, holding, voting
(except as described in clause B of subparagraph (ii) of this
paragraph (d)) or disposing of any securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(f) "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.
(g) "Common Stock" shall mean the Common Stock (presently $0.75 par
value) of the Company. "Common Stock" when used with reference to the
Principal Party (as such term is hereinafter defined) shall mean the
capital stock or other equity security with the greatest voting power
of the Principal Party and, when used with reference to any Person
other than the Company or the Principal Party, shall mean the capital
stock or other equity security with the greatest voting power of such
Person or, if such Person is a Subsidiary of or is controlled by
another Person, the Person which ultimately controls such
first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in Section
3(b) hereof.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(j) "Exempt Person" shall mean the Company, any employee benefit
plan or employee stock plan of the Company or of any Subsidiary of the
Company or any trust or other entity organized, appointed, established
or holding Voting Stock for or pursuant to the terms of any such plan.
(k) "Exercise Price" shall have the meaning set forth in Sections 4
and 7(b) hereof.
(l) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(m) "Fair Market Value" of any property shall mean the fair market
value of such property as determined in accordance with Section 11(b)
hereof.
<PAGE>
(n) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(o) "Independent Director" shall mean any member of the Board
of Directors, while such person is a member of the Board of Directors,
who (i) is not an Acquiring Person, an Affiliate of an Acquiring
Person, an Associate of an Acquiring Person or an Affiliate thereof,
or a representative of an Acquiring Person or any Affiliate or
Associate thereof on, or a nominee of an Acquiring Person or any
Affiliate or Associate thereof for, the Board of Directors and (ii)
who is not an officer or employee of the Company or any Subsidiary,
and who either (i) was a member of the Board of Directors prior to the
Stock Acquisition Date or (ii) subsequently became a member of the
Board of Directors and whose nomination for election or election to
the Board of Directors was recommended or approved by a majority of
the Independent Directors in office at the time of his nomination or
election.
(p) "Person" shall mean any individual, firm, corporation or other
entity.
(q) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(r) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(s) "Right Certificate" shall have the meaning set forth in Section
3(d) hereof.
(t) "Sobey Agreement" shall mean that certain Amended and
Restated Agreement, dated as of February 4, 1988, between the Company
and designated Sobey Parties, as amended through the date hereof,
together with any subsequent amendments or modifications thereto.
(u) "Sobey Parties" shall have the meaning ascribed to it in
the Sobey Agreement and shall also include the Affiliates of each
Sobey Party and the voting trusts established pursuant to the Voting
Trust Agreements (as such term is defined in the Sobey Agreement).
(v) "Stock Acquisition Date" shall mean the first date by
which both (i) an Acquiring Person has become such and (ii) a public
announcement of such fact has been made by either the Company or such
Acquiring Person.
<PAGE>
(w) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having
voting power sufficient to elect a majority of the board of directors
or other persons performing similar functions are beneficially owned,
directly or indirectly, by such Person or by any corporation or other
entity that is otherwise controlled by such Person.
(x) "Summary of Rights" shall have the meaning set forth in
Section 3(a) hereof.
(y) "Trading Day" shall have the meaning set forth in Section
11(b) hereof.
(z) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or
regulatory authority in respect of any transfer of any security,
instrument or right, including Rights, shares of Voting Stock and
shares of Preferred Stock.
(aa) "Voting Stock" shall mean (i) the Common Stock of the
Company and (ii) any other shares of capital stock of the Company
entitled to vote generally in the election of directors of the
Company or entitled to vote together with the Common Stock in
respect of any merger, consolidation, sale of all or substantially
all of the Company's assets or the liquidation, dissolution or
winding up of the Company.
Any determination required to be made by the Board of Directors of the
Company for purposes of applying the definitions contained in this Section
1 shall be made by the Board of Directors in its good faith judgment, which
determination shall be binding on the Rights Agent and the holders of the
Rights.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. With the consent of the Rights Agent, the
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) On the Record Date (or as soon as practicable thereafter), the
Company or the Rights Agent shall send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit A (the "Summary of
Rights"), by first class mail, postage prepaid, 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.
<PAGE>
(b) Until the close of business on the day which is the earlier of (i)
the tenth day after the Stock Acquisition Date or (ii) the tenth Business
Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than an Exempt
Person) of, or the first public announcement of the intent of any Person
(other than an Exempt Person) to commence, a tender or exchange offer upon
the successful consummation of which such Person, together with its
Affiliates and Associates, would be the Beneficial Owner of 30% or more of
the then outstanding shares of Voting Stock of the Company (irrespective of
whether any shares are actually purchased pursuant to any such offer) (the
earlier of such dates being herein referred to as the "Distribution Date"),
(x) the Rights shall be evidenced (subject to the provisions of Section
3(a)) by the certificates for Common Stock registered in the name of the
holders of the Common Stock (which certificates for Common Stock shall also
constitute certificates for Rights) and not by separate Right certificates
and the record holders of such certificates for Common Stock shall be the
record holders of the Rights represented thereby, and (y) each Right shall
be transferable only simultaneously and together with the transfer of a
share of Common Stock (subject to adjustment as hereinafter provided).
Until the Distribution Date (or, if earlier, the Expiration Date or Final
Expiration Date), the surrender for transfer of any certificate for Common
Stock shall constitute the surrender for transfer of the Right or Rights
associated with the Common Stock evidenced thereby, whether or not a copy
of the Summary of Rights is transferred simultaneously with such share
certificate.
(c) Certificates for Common Stock issued after the Record Date but prior
to the earliest of the Distribution Date, the Expiration Date, or the Final
Expiration Date shall have impressed, printed, written or stamped thereon
or otherwise affixed thereto the following legend:
This certificate also evidences and entitles the
holder hereof to the same number of Rights as the number of
shares of Common Stock represented by this certificate, such
Rights being on the terms provided under the Rights Agreement
between Hannaford Bros. Co. and Continental Stock Transfer &
Trust Company (the "Rights Agent"), dated as of December 16,
1997 (as the same may be modified or amended, the "Rights
Agreement"), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal
executive offices of Hannaford Bros. Co. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights shall be evidenced by separate certificates and shall
no longer be evidenced by this certificate. Hannaford Bros.
Co. shall mail to the registered holder of this certificate a
copy of the Rights Agreement without charge within five days
<PAGE>
after receipt of a written request therefor. Under certain
circumstances as provided in the Rights Agreement, Rights
issued to or owned by Acquiring Persons or their Affiliates or
Associates (as defined in the Rights Agreement) and any
subsequent holder of such Rights shall be null and
void and may not be transferred to any person.
(d) As soon as practicable after the Distribution Date, the Company or
the Rights Agent shall send, by first class mail, postage prepaid, to each
record holder of the Common Stock as of the close of business on the
Distribution Date, as shown by the records of the Company, at the address
of such holder shown on such records, a certificate in the form provided by
Section 4 hereof (a "Right Certificate"), evidencing one Right for each
share of Common Stock so held. As of and after the Distribution Date, the
Rights shall be evidenced solely by Right Certificates and may be
transferred by the transfer of the Right Certificate as permitted hereby,
separately and apart from any transfer of one or more shares of Common
Stock.
Section 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the forms of election to purchase shares,
certificate and assignment to be printed on the reverse thereof), when, as
and if issued, shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as may be required to
comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Common Stock
or the Rights may from time to time be listed or as the Company may deem
appropriate to conform to usage or otherwise and as are not inconsistent
with the provisions of this Rights Agreement. Subject to the provisions of
Section 22 hereof, Right Certificates evidencing Rights whenever issued,
(i) shall be dated as of the date of issuance of the Rights they represent
and (ii) subject to adjustment from time to time as provided herein, on
their face shall entitle the holders thereof to purchase such number of
shares (including fractional shares which are integral multiples of
one-hundredth of a share) of Preferred Stock as shall be set forth therein
at the price payable upon exercise of a Right provided by Section 7(b)
hereof as the same may from time to time be adjusted as provided herein
(the "Exercise Price").
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) Each Right Certificate shall be executed on behalf of the Company by
its Chairman of the Board, President or any Senior Vice President or Vice
President, either manually or by facsimile signature, and have affixed
<PAGE>
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. Each Right Certificate shall be countersigned by
the Rights Agent either manually or by facsimile signature and shall not be
valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any Right Certificate shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery of the certificate by the Company, such Right
Certificate, nevertheless, may be countersigned by the Rights Agent and
issued and delivered with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer of the
Company. Any Right Certificate may be signed on behalf of the Company by
any person who, on the date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at an office designated for such purpose in New York, New York,
and in such other locations as may be required by law, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of
the Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 14(b) hereof, at any time after
the close of business on the Distribution Date, and at or prior to the
close of business on the earlier of the Expiration Date or the Final
Expiration Date, any Right Certificate, may be (i) transferred or (ii)
split up, combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of shares of
Preferred Stock as the Right Certificate or Rights Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer any Right Certificate shall surrender the Right Certificate at the
office of the Rights Agent designated for such purpose with the form of
certificate and assignment on the reverse side thereof duly endorsed (or
enclosed with such Right Certificate a written instrument of transfer in
form satisfactory to the Company and the Rights Agent), duly executed by
the registered holder thereof or his attorney duly authorized in writing,
and with such signature duly guaranteed. Any registered holder desiring to
split up, combine or exchange any Right Certificate shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right
Certificate to be split up, combined or exchanged at the office of the
<PAGE>
Rights Agent designated for such purpose. Thereupon, the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any Transfer Tax that may be
imposed in connection with any transfer, split up, combination or exchange
of any Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them and,
if requested by the Company, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, or upon surrender to
the Rights Agent and cancellation of the Right Certificate if mutilated,
the Company shall issue and deliver a new Right Certificate of like tenor
to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date. The Rights may be exercised, in
whole or in part, at any time commencing with the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase
and certificate on the reverse side thereof duly executed (with signatures
duly guaranteed), to the Rights Agent at the office of the Rights Agent
designated for such purpose in New York, New York, together with payment of
the Exercise Price with respect to each Right exercised, subject to
adjustment as hereinafter provided, at or prior to the Close of Business on
the earlier of (i) February 4, 2001 (the "Final Expiration Date") or (ii)
the date on which the Rights are redeemed as provided in Section 23 hereof
(such carrier date being herein referred to as the "Expiration Date").
(b) The Exercise Price of $60.00 shall initially be for each one
one-hundredth (1/100) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of shares of
Preferred Stock or other securities to be acquired upon exercise of a Right
shall be subject to adjustment from time to time as provided in Sections 11
and 13 hereof. The Exercise Price shall be payable in lawful money of the
United States of America, in accordance with paragraph (c)below.
(c) Upon receipt of a Right Certificate with the certificate and form of
election to purchase duly executed, accompanied by payment by check or
money order payable to the order of the Company or the Rights Agent of the
Exercise Price or so much thereof as is necessary for the purchase of
shares or other securities to be purchased upon exercise of the Rights and
<PAGE>
an amount equal to any applicable Transfer Tax, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Preferred
Stock of the Company one or more certificates representing the number of
shares of Preferred Stock to be so purchased, and the Company hereby
authorizes and directs such transfer agent to comply with all such
requests, (ii) as provided in Section 14(b), at the election of the
Company, cause depositary receipts to be issued in lieu of fractional
shares of Preferred Stock, (iii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with Section 14(b) hereof and (iv) after receipt of
such Preferred Stock certificates and/or depositary receipts or cash
payments, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder, and, when appropriate, after
receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate; provided, however, that in the case of a
purchase of securities, other than preferred Stock, pursuant to Section 13
hereof, the Rights Agent shall promptly take the appropriate actions
corresponding in such case to that referred to in the foregoing clauses (i)
through (iv) of this Section 7(c). Notwithstanding the foregoing provisions
of this Section 7(c), the Company may suspend the issuance of shares of
Preferred Stock upon exercise of a Right for a reasonable period, not in
excess of 90 days, during which the Company seeks to register under the
Securities Act of 1933, as amended, and any applicable securities law of
any other jurisdiction the shares of Preferred Stock to be issued pursuant
to the Rights; provided, however, that nothing contained in this Section
7(c) shall relieve the Company of its obligations under Section 9(c)
hereof.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right
Certificate or his assign, subject to the provisions of Section 14(b)
hereof.
(e) Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that are beneficially owned
by (x) such Acquiring Person (or any Associate or Affiliate of such
Acquiring Person), (y) a transferee of such Acquiring Person (or any such
Associate or Affiliate) who becomes a transferee after the invalidation
time or (z) a transferee of such Acquiring Person (or any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
invalidation time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any Person with whom it
has any continuing agreement, arrangement or understanding regarding the
<PAGE>
transferred Rights or (II) a transfer which the Board of Directors has
determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this Section 7(e), and
subsequent transferees of such Persons referred to in clause (y) and (z)
above, shall be void without any further action and any holder of such
Rights shall thereafter have no rights whatsoever with respect to such
Rights under any provision of this Rights Agreement. The Company shall use
all reasonable efforts to ensure that the provisions of this Section 7(e)
are complied with, but shall have no liability to any holder of Right
Certificates or any other Person as a result of its failure to make any
determination with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. No Right Certificate shall be
issued pursuant to Section 3 hereof that represents Rights beneficially
owned by an Acquiring Person whose Rights would be void pursuant to the
provisions of this Section 7(e) or any Associate or Affiliate thereof; no
Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant to the
provisions of this Section 7(e) or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be void pursuant to the provisions of this
Section 7(e) shall be cancelled.
(f) The Company shall not effect any amendment to the Certificate Of
Designations for the Preferred Stock which would materially affect the
rights, privileges or powers of the Preferred Stock, without the prior
approval of the holders of two-thirds or more of the then outstanding
shares of Preferred Stock.
(g) 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 following the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION, RETIREMENT AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered
to the Company or to any of its agents, be delivered to the Rights Agent
for cancellation or in cancelled form, or, if surrendered to the Rights
Agent, shall be cancelled by it, and no Right Certificates shall be issued
in lieu thereof except as expressly permitted by any of the provisions of
<PAGE>
this Rights Agreement. The Company shall deliver to the Rights Agent for
retirement, and the Rights Agent shall retire, any Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Right Certificates to
the Company, or shall, at the written request of the Company, destroy such
cancelled Right Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of preferred
stock or out of authorized and issued shares of Preferred Stock held in its
treasury, such number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding
Rights. The Company shall take such action as may be required for it to
comply with the foregoing sentence of this Section 9(a).
(b) The Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares of Preferred Stock issued
or reserved for issuance in accordance with this Rights Agreement be
listed, upon official notice of issuance, upon the principal national
securities exchange, if any, upon which the Common Stock is listed or, if
the principal market for the Common Stock is not on any national securities
exchange, to be eligible for quotation in the National Association of
Securities Dealers' Automated Quotation System or any successor thereto or
other comparable quotation system.
(c) The Company covenants and agrees that it will take all such action as
may be necessary to insure that all shares of Preferred Stock delivered
upon exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Exercise Price in respect
thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state Transfer Taxes which may be
payable in respect of the issuance or delivery of the Right Certificates or
of any shares of Preferred Stock issued or delivered 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 a Right
Certificate to a Person other than, or the issuance or delivery of
certificates for Preferred Stock upon exercise of Rights in a name other
than that of, the registered holder of the Right Certificate, and the
Company shall not be required to issue or deliver a Right Certificate or
certificate for Preferred Stock to a Person other than such registered
<PAGE>
holder until any such Transfer Tax shall have been paid (any such Transfer
Tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction
that no such Transfer Tax is due.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record
of the Preferred Stock represented thereby on, and such certificate shall
be dated as of, the date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Exercise Price (and any
applicable Transfer Taxes) was made; provided, however, that, if the date
of such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall
be dated as of, the next succeeding Business Day on which the Preferred
Stock transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate, as such, shall
not be entitled to any rights of a stockholder 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 EXERCISE PRICE OR NUMBER OF SHARES. The
Exercise Price, the number of shares which may be purchased upon exercise
of a Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Rights Agreement (A) declare or pay any dividend on Common
Stock payable in shares of Common Stock, (B) subdivide or split the
outstanding shares of Common Stock into a greater number of shares or
(C) combine or consolidate the outstanding shares of Common Stock into
a smaller number of shares or effect a reverse split of the outstanding
shares of Common Stock, then and in each such event the number of
shares of Preferred Stock issuable upon the exercise of a Right after
the record date for such event (if one shall have been established or, if
not, after the date of such event) shall be the number of shares of
Preferred Stock issuable immediately prior to such event multiplied by
a fraction the numerator of which is the number of Rights outstanding
immediately prior to such event and the denominator of which is the
number of Rights outstanding immediately after such event and the
Exercise Price after such event shall be the Exercise Price in effect
immediately prior to such event multiplied by such fraction. If an
<PAGE>
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).
(ii) In the event that
(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement, shall,
directly or indirectly, (1) consolidate with or merge with and into
the Company or any of its Subsidiaries or otherwise combine with the
Company or any of its Subsidiaries and the Company or such Subsidiary
shall be the continuing or surviving corporation of such
consolidation, merger or combination and the Common Stock of the
Company shall remain outstanding and no shares thereof shall be
changed into or exchanged for stock or other securities of the Company
or of any other Person or cash or any other property, or (2) in one or
more transactions, other than in connection with the exercise of a
Right or Rights and other than in connection with the exchange
or conversion of securities exchangeable for or convertible into
securities of the Company or of any Subsidiary of the Company,
transfer any assets or property to the Company or any of its
Subsidiaries in exchange (in whole or in part) for any shares of any
class of capital stock of the Company or any of its Subsidiaries or
any securities exchangeable for or convertible into shares of any
class of capital stock of the Company or any Subsidiary of the
Company, or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of
any class of capital stock of the Company or any of its Subsidiaries
or any securities exchangeable for or convertible into shares of any
class of capital stock of the Company or any Subsidiary of the Company
(other than as part of a pro rata distribution by the Company or such
Subsidiary to all holders of such shares), or (3) sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise dispose of,
to, from, or with, as the case may be, the Company or any of its
Subsidiaries, assets (including securities) on terms and conditions
less favorable to the Company or such Subsidiary than the Company or
such Subsidiary would be able to obtain in arm's length negotiation
with an unaffiliated third party, or (4) receive any compensation from
the Company or any of the Company's Subsidiaries for services, other
than compensation for employment as a regular employee or fees for
serving as a director at rates in accordance with the Company's (or
its Subsidiary's) past practices, or (5) receive the benefit (except
proportionately as a stockholder) of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries; or
<PAGE>
(B) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock
split), or any recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of
its Subsidiaries (whether or not with or into or otherwise involving
an Acquiring Person or any Affiliate or Associate of such Acquiring
Person) which has the effect, directly or indirectly, of increasing by
more than 1% the proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its Subsidiaries
or securities exercisable for or convertible into equity securities of
the Company or any of its Subsidiaries which is directly or indirectly
Beneficially Owned by any Acquiring Person or any Affiliate and/or
Associate of any Acquiring Person; or
(C) any Person (other than an Exempt Person or any other Person
excluded from the definition of Acquiring Person), alone or together
with its Affiliates and Associates, is or shall become the Beneficial
Owner of thirty percent (30%) or more of the shares of Voting Stock
then outstanding, except pursuant to an offer for all outstanding
shares of Voting Stock at a price and upon such terms and conditions
as a majority of the Independent Directors determine to be in the best
interests of the Company and its shareholders or except pursuant to a
transaction approved in advance by a majority of the Independent
Directors;
then, on the first occurrence of any such event referred to in
Sections 11(a)(ii)(A), (B) or (C) hereof, proper provisions shall be
made so that each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have a right to receive for each Right,
upon exercise thereof in accordance with the terms of this Rights
Agreement and payment of the Exercise Price, the greater of (1) the
number of shares of Preferred Stock for which such Right was
exercisable immediately prior to such event or (2) such number of
shares of Preferred Stock as, based on the Fair Market Value of the
Preferred Stock (determined pursuant to Section 11(b) hereof) on the
date of the occurrence of such event, have a value equal to twice
the Exercise Price; provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject
to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant
to this Section 11(a)(ii).
(iii) In the event that the Company does not have available sufficient
authorized but unissued Preferred Stock to permit the adjustments
required pursuant to the foregoing subparagraph (i) or the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii),
<PAGE>
the Company shall take all such action as may be necessary to authorize
and reserve for issuance such number of additional shares of Preferred
Stock as may from time to time be required to be issued upon the
exercise in full of all Rights from time to time outstanding and, if
necessary, shall use its best efforts to obtain stockholder approval
thereof. Notwithstanding the foregoing provisions of this Section
11(a)(iii), in lieu of issuing shares of Preferred Stock in accordance
with Section 11(a)(ii) hereof, if a majority of the Independent
Directors determines that such action is necessary or appropriate and
not contrary to the interests of holders of Rights, they may elect to
cause the Company to issue or pay, and, if sufficient shares of
Preferred Stock cannot be issued for such purpose in accordance with the
provisions hereof, the Company shall issue or pay upon the exercise of
the Rights, cash, property, debt securities, shares of Preferred Stock
or Common Stock, or any combination thereof, having an aggregate Fair
Market Value equal to the Fair Market Value of the shares of Preferred
Stock which otherwise would have been issuable pursuant to Section
11(a)(ii). Any such election by a majority of the Independent Directors
of the Company must be made and publicly announced within 30 days of the
date on which any event described in subparagraph (A), (B) or (C) of
Section 11(a)(ii) first occurred following the Stock Acquisition Date.
(b) For the purpose of this Rights Agreement, the "Fair Market
Value" of any share of Preferred Stock, Common Stock or any other stock
or any Right or other security or any other property on any date shall
be determined as provided in this Section 11(b). In the case of a
publicly-traded stock or other security, the Fair Market Value on any
date shall be deemed to be the average of the daily closing prices per
share of such stock or per unit of such other security for the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event
that the Fair Market Value per share of any share of Common Stock is
determined during a period which includes any date that is within 30
Trading Days after (i) the ex-dividend date for a dividend or
distribution on such stock payable in shares of Common Stock or
securities convertible into shares of Common Stock, or (ii) the
effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of such stock, then, and in
each such case, the Fair Market Value shall be appropriately adjusted by
the Board of Directors of the Company to take into account ex-dividend
or post-effective date trading. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular
way (in either case, as reported in the applicable transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange), or, if the securities are not listed or
<PAGE>
admitted to trading on the New York Stock Exchange, as reported in the
applicable transaction reporting system with respect to securities
listed on the principal national securities exchange on which such
security is listed or admitted to trading; or, if 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 no bids for such security are
quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market
in such security selected by the Board of Directors of the Company. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which such security is listed or admitted to
trading is open for the transaction of business or, if such security is
not listed or admitted to trading on any national securities exchange, a
Business Day. If a security is not publicly held or not so listed or
traded, "Fair Market Value" shall mean the fair value per share of stock
or per other unit of such other security, as determined by an
independent investment banking firm experienced in the valuation of
securities selected in good faith by the Board of Directors of the
Company, or, if no such investment banking firm is, in the good faith
judgment of the Board of Directors, available to make such
determination, in good faith by the Board of Directors of the Company;
provided, however, that for purposes of making the adjustment provided
for by Section 11(a)(ii) hereof, the Fair Market Value of a share of
Preferred Stock shall not be less than 100% of the product of the Fair
Market Value of a share of Common Stock multiplied by the higher of the
then Dividend Multiple or Vote Multiple applicable to the Preferred
Stock (as defined in the Certificate of Designations relating to the
Preferred Stock) and shall not exceed 105% of the product of the then
Fair Market Value of a share of Common Stock multiplied by the higher of
the then Dividend Multiple or Vote Multiple applicable to the Preferred
Stock. In the case of property other than securities, the "Fair Market
Value" thereof shall be determined in good faith by the Board of
Directors of the Company based upon such appraisals or valuation reports
of such independent experts as the Board of Directors of the Company
shall in good faith determine to be appropriate in accordance with good
business practices and the interests of the holders of Rights. Any such
determination of Fair Market Value shall be described in a statement
filed with the Rights Agent and shall be binding upon the Rights Agent.
(c) All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one-thousandth of a share, as the
case may be.
<PAGE>
(d) Irrespective of any adjustment or change in the Exercise Price or
the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price and the number of shares to be
issued upon exercise of the Rights as in the initial Right Certificates
issued hereunder but, nevertheless, shall represent the Rights as so
adjusted.
(e) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock upon
exercise of the Rights below the then par value, if any, of the shares
of Preferred Stock, the Company shall use its best efforts to take any
corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
non-assessable shares of such Preferred Stock at such adjusted purchase
price per share.
(f) Anything in this Section 11 to the contrary notwithstanding, in
the event of any reclassification of stock of the Company or any
recapitalization, reorganization or partial liquidation of the Company
or similar transaction, the Company shall be entitled to make such
further adjustments in the number of shares of Preferred Stock which may
be acquired upon exercise of the Rights, and such adjustments in the
purchase price per share therefor, in addition to those adjustments
expressly required by the other paragraphs of this Section 11, as the
Board of Directors of the Company shall determine to be necessary or
appropriate in order for the holders of the Rights in such event to be
treated equitably and in accordance with the purpose and intent of this
Rights Agreement or in order that any such event shall not, but for such
adjustment, in the opinion of counsel to the Company, result in the
stockholders of the Company being subject to any United States federal
income tax liability by reason thereof.
(g) In the event the Company shall at any time after the Record Date
make any distribution on the shares of Common Stock of the Company,
whether by way of a dividend or a reclassification of stock, a
recapitalization, reorganization or partial liquidation of the Company
or otherwise, in cash or any debt security, debt instrument, real or
personal property or any other property (other than any shares of Common
Stock or other capital stock of the Company and other than any right or
warrant to acquire any such shares, including any debt security
convertible into or exchangeable for any such share, at less than the
Fair Market Value of such shares) and the amount of such cash dividend
or the Fair Market Value of such debt security, debt instrument or
property exceeds 150% of the aggregate amount of the cash dividends
declared or paid on the Common Stock of the Company in the 15-month
<PAGE>
period immediately preceding such distribution, then and in each such
event, unless such distribution is part of or is made in connection with
a transaction to which Section 11(a)(ii) or Section 13 hereof applies,
the Exercise Price shall be reduced by an amount equal to the cash or
the Fair Market Value of such distribution, as the case may be, per
share of Common Stock of the Company. For purposes hereof, the Fair
Market Value of any property distributed to the holders of shares of
Common Stock of the Company shall be the fair market value of such
property as determined by an independent investment banking firm
experienced in the valuation of securities or the other property so
distributed, as the case may be, selected in good faith by the Board of
Directors of the Company, or, if no such investment banking firm is in
the good faith judgment of the Board of Directors available to make such
determination, in good faith by the Board of Directors of the Company,
whose determination shall be final and binding on the Company, the
Rights Agent and the holders of Rights.
Section 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Sections 11 and 13
or 23(c), the Company shall (a) promptly prepare a certificate setting
forth such adjustment, and a brief statement of the facts giving rise to
such adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Preferred Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25. Notwithstanding the foregoing sentence, the
failure of the Company to make such certification or give such notice shall
not affect the validity of or the force or effect of the requirement for
such adjustment. Any adjustment to be made pursuant to Sections 11, 13 or
23(c) of this Rights Agreement shall be effective as of the date of the
event giving rise to such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any adjustment
unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, at any time on or after the Distribution Date, (x)
the Company shall, directly or indirectly, consolidate with, or merge with
and into, any other Person or Persons and the Company shall not be the
surviving or continuing corporation of such consolidation or merger, or (y)
any Person or Persons shall, directly or indirectly, consolidate with, or
merge with and into, the Company, and the Company shall be the continuing
or surviving corporation of such consolidation or merger and, in connection
with such consolidation or merger, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or other
<PAGE>
securities of any other Person or of the Company or cash or any other
property, or (z) the Company or one or more of its Subsidiaries shall,
directly or indirectly, sell or otherwise transfer to any other Person or
any Affiliate or Associate of such Person, in one or more transactions, or
the Company or one or more of its Subsidiaries shall sell or otherwise
transfer to any Persons in one or a series of related transactions, assets
or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole), then, on
the first occurrence of any such event, proper provision shall be made so
that (i) each holder of record of a Right shall thereafter have the right
to receive, upon the exercise thereof and payment of the Exercise Price in
accordance with the terms of this Rights Agreement, such number of shares
of validly issued, fully paid and non-assessable Common Stock of the
Principal Party (as defined herein) as shall, based on the Fair Market
Value of the Common Stock of the Principal Party on the date of
consummation of such consolidation, merger, sale or transfer, equal twice
the Exercise Price; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Rights Agreement; (iii) the term "Company" for all purposes of this Rights
Agreement shall thereafter be deemed to refer to such Principal Party; and
(iv) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its Common Stock in
accordance with the provisions of Section 9 hereof applicable to the
reservation of Preferred Stock) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder
of a Right shall thereupon be entitled to receive, upon exercise of a Right
and payment of the Exercise Price, such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had
it, at the time of such transaction, owned the shares of Common Stock of
the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of the first
sentence of Section 13 (a) hereof: (A) the Person that is the issuer of the
securities into which shares of Common Stock of the Company are converted
<PAGE>
in such merger or consolidation, or, if there is more than one such issuer,
the issuer the Common Stock of which has the greatest market value or (B)
if no securities are so issued, (x) the Person that is the other party to
the merger or consolidation and that survives such merger or consolidation,
or, if there is more than one such Person, the Person the Common Stock of
which has the greatest aggregate market value or (y) if the Person that is
the other party to the merger or consolidation does not survive the merger
or consolidation, the Person that does survive the merger or consolidation
(including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in 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 so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of
such Persons as is the issuer of Common Stock having the greatest market
value of shares outstanding; provided, however, that in any such case, if
the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other Person, or if such Person
is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stock of all of which are and have been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Stock having the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger or sale or
transfer of assets or earning power referred to in Section 13 (a) unless
prior thereto the Company and the Principal Party involved therein shall
have executed and delivered to the Rights Agent an agreement confirming
that the Principal Party shall, upon consummation of such consolidation,
merger or sale or transfer of assets or earning power, assume this Rights
Agreement in accordance with Sections 13 (a) and (b) hereof and that all
rights of first refusal or preemptive rights in respect of the issuance of
shares of Common Stock of the Principal Party upon exercise of outstanding
Rights have been waived and that such transaction shall not result in a
default by the Principal Party under this Rights Agreement, and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale or transfer of assets or earning power referred to in
Section 13 (a) hereof, the Principal Party will
(i) prepare and file a registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate
<PAGE>
form, use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and use its best efforts
to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities Act)
until the date of expiration of the Rights, and similarly comply with
applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the Rights
and the securities purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements for quotation
on NASDAQ; and
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been
exercised shall, subject to the provisions of Section 7(e) hereof,
thereafter be exercisable in the manner described in Section 13(a) (without
taking into account any prior adjustment required by Section 11(a)(ii)).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights (i.e.,
Rights to acquire less than one one-hundredth of a share of Preferred
Stock), unless such fractional Rights result from a transaction referred to
in Section 11(a)(i) hereof. If the Company shall determine not to issue
such fractional Rights, then, in lieu of such fractional Rights, there
shall be paid to the holders of record of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the Fair Market Value of a
whole Right.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of
one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which
are integral multiples of one-hundredth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Company may, at its election,
issue depositary receipts evidencing fractions of shares pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such
depositary receipts shall have all of the rights, privileges and
preferences to which they would be entitled as owners of the Preferred
<PAGE>
Stock. With respect to fractional shares that are not integral multiples of
one-hundredth of a share, if the Company does not issue such fractional
shares or depositary receipts in lieu thereof, there shall be paid to the
holders of record of Right Certificates at the time such Right Certificates
are exercised as herein provided an amount in cash equal to the same
fraction of the Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right expressly waives
his right to receive any fractional Right or any fractional shares (other
than fractions which are integral multiples of one-hundredth of a share)
upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Rights Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the holders of
record of the Common Stock); and any holder of record of any Right
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 Right
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 Right Certificate in the manner provided in such Right Certificate and
in this Rights Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any
breach of this Rights Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual
or threatened violations of, the obligations of any Person subject to this
Rights Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Each holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates
for Common Stock registered in the name of the holders of the Common
Stock (which certificates for Common Stock shall also constitute
certificates for Rights) and not by separate Right Certificates, and each
Right shall be transferable only simultaneously and together with the
transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office
of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
<PAGE>
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the associated Common
Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of Preferred
Stock or any other securities which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder
of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 24
hereof), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall have
been exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(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 other
disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done by the Rights Agent in
connection with the acceptance and administration of this Rights Agreement,
including the cost and expenses of defending against any claim of liability
relating to the Rights or this Rights Agreement.
(b) The Rights Agent shall be protected against, and shall incur no
liability for or in respect of, any action taken, suffered or omitted by it
in connection with its administration of this Rights Agreement in reliance
upon any Right Certificate or certificate for Preferred 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.
<PAGE>
Section 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF, THE RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created
by this Rights Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under
its prior name and deliver Right Certificates so countersigned; in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its
prior name or in its changed name; in all such cases such Right
Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), 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.
<PAGE>
(b) Whenever in the performance of its duties under this Rights Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proven or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, the President or any Senior Vice President or Vice President and by
the Treasurer or any Assistant Treasurer, the Secretary or any Assistant
Secretary or the Clerk of the Company and delivered to the Rights Agent.
Any such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of
this Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under
the provisions of Section 11, 13 or 23(c) 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 Right Certificates after
receipt of a certificate describing any such adjustment furnished in
accordance with Section 12 hereof); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock to be issued pursuant to this
Rights Agreement or any Right Certificate or as to whether any shares of
Preferred Stock will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of the Rights Agreement.
<PAGE>
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President or any Senior Vice
President or Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer or the Clerk of the Company, and
to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for
any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in
such application (which date shall not be less than five Business Days
after the date any such officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective
date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action
to be taken or omitted.
(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 the Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
<PAGE>
(k) The Rights Agent agrees to meet at all times while it serves as
rights agent hereunder the financial requirements of Rule 496 of the New
York Stock Exchange Rules.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor
Rights Agents (with or without cause) upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock and the Preferred Stock by
registered or certified 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. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal
of a Rights Agent be effective until a successor Rights Agent shall have
been appointed and have accepted such appointment. If the Company shall
fail to make such appointment within a period of 30 days after such removal
or after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the incumbent Rights Agent or the holder
of record of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be
(a) a corporation organized and doing business under the laws of the United
States or of any state thereof, in good standing, having an office in the
City of New York, which is authorized under such laws to exercise corporate
trust or shareholder services powers and is subject to supervision or
examination in the conduct of its corporate trust or shareholder services
business by federal or state authorities and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000; (b) an Affiliate controlled by a corporation described in
clause (a) of this sentence; or (c) a corporation which meets the financial
requirements of Rule 496 of the New York Stock Exchange Rules. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed, but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and Preferred Stock, and mail a notice
thereof in writing by mail to the registered holders of the Right
<PAGE>
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the
Rights Agent, the Company shall have the authority to act as the Rights
Agent until a successor Rights Agent shall have assumed the duties of the
Rights Agent hereunder.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Rights Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Exercise Price per share and the number or
kind or class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with the
provisions of this Rights Agreement.
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its option, redeem all
but not less than all the then outstanding Rights, at any time prior to the
close of business on the earlier of (i) the tenth day following the Stock
Acquisition Date or (ii) the Final Expiration Date, at a redemption price
of $.01 per Right, subject to adjustments as provided in subsection (c)
below (the "Redemption Price").
(b) The right to exercise the Rights will terminate at the effective time
of the action of the Board of Directors ordering the redemption of the
Rights and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 days after such effective time, the
Company shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each notice of redemption will state the method by which the
payment of the Redemption Price will be made.
(c) In the event the Company shall at any time after the date of this
Rights Agreement (A) pay any dividend on Common Stock in shares of Common
Stock, (B) subdivide or split the outstanding shares of Common Stock into a
greater number of shares or (C) combine or consolidate the outstanding
shares of Common Stock into a smaller number of shares or effect a reverse
<PAGE>
split of the outstanding shares of Common Stock, then and in each such
event the Redemption Price shall be appropriately adjusted to reflect the
foregoing.
Section 24. NOTICE OF PROPOSED ACTIONS.
(a) In case the Company, after the Distribution Date, shall propose (i)
to effect any of the transactions referred to in Section 11(a)(i) or to pay
any dividend to the holders of record of its Common Stock payable in stock
of any class or to make any other distribution to the holders of record of
its Common Stock (other than a regular periodic cash dividend at a rate not
in excess of 125% of the rate of the last cash dividend theretofore paid),
or (ii) to offer to the holders of record of its Common Stock options,
warrants, or other rights to subscribe for or to purchase shares of Common
Stock (including any security convertible into or exchangeable for Common
Stock) or shares of stock of any class or any other securities, options,
warrants, convertible or exchangeable securities or other rights, or (iii)
to effect any reclassification of its Preferred Stock or Common Stock or
any recapitalization or reorganization of the Company, or (iv) to effect
any consolidation or merger with or into, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person or Persons, 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 record of a Right Certificate, in
accordance with Section 25, notice of such proposed action, which shall
specify the record date for the purposes of such transaction referred to in
Section 11(a)(i) or such dividend or distribution, or the date on which
such reclassification, recapitalization, reorganization, consolidation,
merger, sale or transfer of assets, liquidation, dissolution, or winding up
is to take place and the record date for determining participation therein
by the holders of record of Common Stock or Preferred Stock, if any such
date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of record of the Preferred Stock for
purposes of such action, and in the case of any such other action, at least
10 days prior to the date of the taking of such proposed action or the date
or participation therein by the holders of record of Common Stock or
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section 24 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon
any such action.
<PAGE>
(b) In case any of the transactions referred to in either Section
11(a)(ii) or Section 13 of this Rights Agreement are proposed, then, in any
such case, the Company shall give to each holder of Rights, in accordance
with Section 25 hereof, notice of the proposal of such transaction at least
10 days prior to consummating such transaction, which notice shall specify
the proposed event and the consequences of the event to holders of Rights
under Section 11(a)(ii) or Section 13 hereof, as the case may be, and, upon
consummating such transaction, shall similarly give notice thereof to each
holder of Rights.
Section 25. NOTICES. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of
record of any Right Certificate or Right 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:
Hannaford Bros. Co.
145 Pleasant Hill Road
Scarborough, Maine 04074
Attn: Treasurer
Subject to the provisions of Section 21, any notice or demand authorized by
this Rights Agreement to be given or made by the Company or by the holder
of record of any Right Certificate or Right to or on the Rights Agent shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Continental Stock Transfer & Trust Company
Two Broadway
New York, New York 10004
Attn: Steven Nelson
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to the holder of record of any
Right Certificate or Right 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. For as long as the Rights are
then redeemable and except as provided in the last sentence of this Section
26, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of
this Agreement without the approval of any holders of the Rights. At any
time when the Rights are not then redeemable and except as provided in the
last sentence of this Section 26, the Company may, and the Rights Agent
<PAGE>
shall if the Company so directs, supplement or amend this Rights Agreement
without the approval of any holders of Right Certificates (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein or
(iii) to change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable, provided that no such
supplement or amendment pursuant to this clause (iii) shall materially
adversely affect the interest of the holders of Right Certificates. Upon
the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute such
supplement or amendment. This Agreement may be amended or supplemented at
any time with the approval of a majority of the registered holders of the
Right Certificates (and, prior to the Distribution Date, the Common Stock).
Notwithstanding anything contained in this Rights Agreement to the
contrary, no supplement or amendment shall be made which changes the
Redemption Price or the Final Expiration Date and supplements or amendments
may be made after the time that any Person becomes an Acquiring Person only
if at the time of the action of the Board of Directors approving such
supplement or amendment there are then in office not less than two
Independent Directors and such supplement or amendment is approved by a
majority of the Independent Directors then in office.
Section 27. SUCCESSORS. All of the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 28. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this Rights
Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any
legal or equitable right, remedy or claim under this Rights Agreement; but
this Rights Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of record of the Right
Certificates (and, prior to the Distribution Date, the Common Stock).
Section 29. MAINE CONTRACT. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Maine and for all purposes shall be governed by
and construed and enforced in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such
state.
<PAGE>
Section 30. COUNTERPARTS. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 31. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 32. SEVERABILITY. If any term, provision, covenant or restriction
of this Rights Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Rights Agreement
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement
to be duly executed, all as of the day and year first above written.
HANNAFORD BROS. CO.
By:/s/Garrett D. Bowne, IV
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By:/s/Steven G. Nelson
<PAGE>
EXHIBIT A
HANNAFORD BROS. CO.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On December 16, 1997, the Board of Directors of Hannaford
Bros. Co. (the "Company") declared a dividend distribution of one Preferred
Stock Purchase Right for each outstanding share of common stock, par value
$0.75 per share (the "Common Stock"), of the Company. The distribution is
payable to stockholders of record on the record date of February 4, 1998.
Each Right entitles the registered holder to purchase from the Company one
one-hundredth (1/100) of a share of preferred stock of the Company,
designated as Series A Junior Participating Preferred Stock (the "Series A
Preferred Stock") at a price of $60 per one one-hundredth (1/100) of a
share ("Purchase Price"). The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the Company
and Continental Stock & Transfer Company, as Rights Agent (the "Rights
Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will
automatically trade with the Common Stock.
Until the close of business on the tenth day following the earlier to
occur of (i) a public announcement that a person or group of affiliated or
associated persons ("Acquiring Person"), other than (A) the Company, (B)
any employee benefit plan or employee stock plan of the Company or of any
subsidiary of the Company, (C) any of the Sobey Parties provided that the
Sobey Agreement (as defined in the Rights Agreement) is in effect and their
ownership of shares of Voting Stock (as defined in the Rights Agreement) of
the Company is in accordance with the terms of the Sobey Agreement, in
which case the Sobey Parties shall constitute an Acquiring Person after the
termination of the Sobey Agreement if thereafter they increase their
aggregate percentage beneficial ownership of shares of Voting Stock by more
than 1% of the Voting Stock of the Company then outstanding over the
percentage of Voting Stock owned by them immediately prior to the
termination of the Sobey Agreement (except if at the time immediately prior
to the termination of the Sobey Agreement the Sobey Parties were not the
owners of 20% or more of the shares of Voting Stock then outstanding, in
which case the Sobey Parties will become an Acquiring Person upon the
occurrence of such event), (D) any person whose ownership of 20% or more of
the shares of Voting Stock then outstanding results from the purchase of
shares from the Company or from a purchase arranged by the Company, in
which case such Person shall constitute an Acquiring Person after any such
<PAGE>
purchase if it increases its percentage beneficial ownership of shares of
Voting Stock of the Company by more than 1% of the Voting Stock of the
Company then outstanding over the percentage beneficially owned by it
immediately after giving effect to such purchase, except as the result of
subsequent purchases from or arranged by the Company or (E) any person
whose beneficial ownership of shares of Voting Stock of the Company is
increased to 20% or more of the shares of Voting Stock then outstanding
solely by reason of a repurchase or repurchases by the Company of, or an
exchange offer or offers by the Company for, outstanding shares of Voting
Stock of the Company, in which case such person shall constitute an
Acquiring Person after any such repurchases or exchange offers if such
person increases its percentage beneficial ownership of shares of Voting
Stock by more than 1% of the Voting Stock of the Company then outstanding
over the percentage beneficially owned by it immediately after giving
effect to such repurchase or exchange offer, except as a result of any
subsequent repurchases or exchange offers by the Company, has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the
shares of Voting Stock then outstanding or (ii) the commencement of, or
public announcement of an intention to make, a tender or exchange offer
(other than a tender or exchange offer by the Company, or any employee
benefit plan of the Company or of any subsidiary of the Company) whose
consummation would result in the ownership of 30% or more of the shares of
Voting Stock then outstanding, even if no purchases actually occur pursuant
to such offer (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the Common
Stock certificates outstanding as of February 4, 1998, by such Common Stock
certificate with a copy of this Summary of Rights attached thereto. The
Rights Agreement provides that, until the Distribution Date, the Rights
will be represented by and transferred with, and only with, the Common
Stock. Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Stock certificates issued after February 4, 1998
will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any of the Common Stock certificates
outstanding as of February 4, 1998 with or without a copy of this Summary
of Rights attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon
as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the Distribution
Date and such separate certificates alone will evidence the Rights from and
after the Distribution Date.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on February 4, 2001, unless earlier
redeemed by the Company as described below.
<PAGE>
The Series A Preferred Stock is nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of
preferred stock, subordinate to any other series of the Company's preferred
stock. Series A Preferred Stock may not be issued except upon exercise of
Rights. Each share of Series A Preferred Stock will be entitled to receive
when, as and if declared, a quarterly dividend in an amount equal to the
greater of $13.50 per share or 100 times the cash dividends declared on the
Company's Common Stock. In addition, the Series A Preferred Stock is
entitled to 100 times any non-cash dividends or other non-cash
distributions (other than dividends payable in equity securities) declared
on the Common Stock, in like kind. In the event of the liquidation of the
Company, the holders of the Series A Preferred Stock will be entitled to
receive a liquidation payment per share in an amount equal to the greater
of $6,000 or 100 times the payment made per share of Common Stock. Each
share of Series A Preferred Stock will have 100 votes, voting together with
the Common Stock. In the event of any merger, consolidation or other
transaction in which common shares are exchanged, each share of Series A
Preferred Stock will be entitled to receive 100 times the amount received
per share of Common Stock. The rights of the Series A Preferred Stock as to
dividends, liquidation and voting are protected by antidilution provisions.
The number of shares of Series A Preferred Stock issuable upon
exercise of the Rights are subject to certain adjustments from time to time
in the event of a stock dividend on, or a subdivision or combination of,
the Common Stock. The Purchase Price is subject to adjustment in the event
of extraordinary distributions of cash or other property to holders of
Common Stock.
Unless the Rights are earlier redeemed, in the event that, after the
Rights have become exercisable, the Company were to be acquired in a merger
or other business combination (in which any shares of the Common Stock are
changed into or exchanged for other securities or assets) or more than 50%
of the assets or earning power of the Company and its subsidiaries (taken
as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be
made so that each holder of record of a Right will from and after such date
have the right to receive, upon payment of the Purchase Price, that number
of shares of common stock of the acquiring company having a market value at
the time of such transaction equal to two times the Purchase Price. In
addition, unless the Rights are earlier redeemed, in the event that the
Company were to be the surviving corporation in a merger or other business
combination with an Acquiring Person and the Common Stock remained
outstanding (none of which shares were changed into or exchanged for other
securities or assets), or in the event that an Acquiring Person engages in
one of a number of other self-dealing transactions specified in the Rights
Agreement, or in the event that any person (other than any person excluded
from the definition of Acquiring Person) shall beneficially own 30% or more
<PAGE>
of the Company's Voting Stock, which shares shall be acquired through a
transaction or series of transactions which shall not have been approved by
a majority of the Independent Directors, the Rights Agreement provides that
proper provisions will be made so that each holder of record of a Right,
other than the Acquiring Person (whose Rights will thereupon become null
and void), will thereafter have the right to receive, upon payment of the
Purchase Price, that number of shares of the Series A Preferred Stock
having a market value at the time of the transaction equal to two times the
Purchase Price.
Fractions of shares of Series A Preferred Stock may, at the election
of the Company, be evidenced by depositary receipts. The Company may also
issue cash in lieu of fractional shares which are not integral multiples
of one-hundredth of a share.
At any time on or prior to the close of business on the tenth day
after a public announcement that a person has become an Acquiring Person,
the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). Immediately upon the action of the
Board of Directors of the Company authorizing redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated January 28, 1998. A copy of the Rights Agreement is available free
of charge from the Company. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement which is incorporated in this summary description
herein by reference.
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. W- ______Rights
NOT EXERCISABLE AFTER FEBRUARY 4, 2001 OR EARLIER IF REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $.01 PER
RIGHT ON THE TERMS SET FORTH OR REFERRED TO IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE
RIGHTS AGREEMENT, RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED
TO ANY PERSON.
Right Certificate
HANNAFORD BROS. CO.
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 December 16, 1997 (the "Rights
Agreement") between Hannaford Bros. Co., a Maine corporation ("Company"),
and Continental Stock Transfer & Trust Company (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (New York
City time) on February 4, 2001 at the office of the Rights Agent designated
for such purpose, or its successors as Rights Agent, in New York, New York,
one one-hundredth (1/100) of a fully paid nonassessable share of the Series
A Junior Participating Preferred Stock (the "Preferred Stock") of the
Company at a purchase price of $60.00 as the same may from time to time be
adjusted in accordance with the Rights Agreement (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Preferred Stock which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events and, upon the happening
of certain events, securities other than shares of Preferred Stock, or
other property, may be acquired upon exercise of the Rights evidenced by
this Right Certificate, as provided by the Rights Agreement.
<PAGE>
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are 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 of the
Rights Agent, the Company and the holders of record of the Right
Certificates. Copies of the Rights Agreement are on file at the principal
executive office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder of record to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by
the Right Certificate or Right 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 Right Certificate or Right Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
or under certain other circumstances at a redemption price of $.01 per
Right.
No fractional shares of Preferred Stock (other than fractions which
are integral multiples of one-hundredth of a share) are required to be
issued upon the exercise of any Right or Rights evidenced hereby, and in
lieu thereof a cash payment may be made, as provided in the Rights
Agreement. As provided in the Rights Agreement, fractions of shares of
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action
or to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided in the Rights
Agreement.
<PAGE>
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of -------------, --.
ATTEST: HANNAFORD BROS. CO.
___________________________ By: __________________________
Secretary Title:
Countersigned:
[-------------------------]
By ________________________
Authorized Signature
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED __________________________________________
hereby sells, assigns and transfers unto _________________________________
__________________________________________________________________________
(Please print name and address of transferee)
__________________________________________________________________________
Rights evidenced by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
________________ Attorney to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution.
Dated: _________________, __
__________________
Signature
Signature Guaranteed:
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person
or an Associate or an Affiliate thereof (as such terms are defined in the
Rights Agreement between Hannaford Bros. Co. and Continental Stock Transfer
& Trust Company, as Rights Agent dated as of December 16, 1997); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement between Hannaford Bros. Co. and Continental Stock Transfer &
Trust Company, as Rights Agent dated as of December 16, 1997).
Dated: _____________, 19__ __________________
Signature
<PAGE>
NOTICE
------
The signatures to the foregoing Assignment and certificate must
correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if registered holder
desires to exercise the Right Certificate.)
To HANNAFORD BROS. Co.:
The undersigned hereby irrevocably elects to exercise
_____________________ Rights represented by this Right Certificate to
purchase the shares of Preferred Stock issuable upon the exercise of such
Rights and requests that certificates for such share(s) be issued in the
name:
Please insert social security
or other identifying number ________________________
__________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number __________________________
___________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
Dated: _______________________ , __
_________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
<PAGE>
EXHIBIT C
HANNAFORD BROS. CO.
SECRETARY'S CERTIFICATE
I, _____________________, Secretary of HANNAFORD BROS. CO., certify
that the Board of Directors of HANNAFORD BROS. CO. duly adopted the
following resolutions at a meeting duly held on December 16, 1997, at which
a quorum of the members of the Board was present and voting:
RESOLVED, that there be, and hereby is, declared out of the surplus of
the Company, a dividend of one right ("Right") per share on the outstanding
Common Stock, par value $0.75 per share of the Company ("Common Stock"),
payable to stockholders of record of the Common Stock at the close of
business on February 4, 1998, each Right representing the right to purchase
one one-hundredth (1/100) of a share of Series A Junior Participating
Preferred Stock, having the voting powers, preferences, and relative,
participating, optional, or other special rights, and the qualifications,
limitations, or restrictions set forth below ("Series A Preferred Stock"),
upon the terms and conditions set forth in the Rights Agreement described
in the second succeeding resolution, and that the officers of the Company
be, and they hereby are, authorized and directed to cause such dividend to
be paid in accordance with the following resolutions;
RESOLVED, that for purposes of making an appropriate charge to
surplus, the Treasurer of the Company be, and he hereby is, directed to
make a charge of $.01 per Right issued pursuant to these resolutions;
RESOLVED, that the form, terms, and provisions of the proposed Rights
Agreement ("Rights Agreement") between the Company and Continental Stock
Transfer & Trust Company, as rights agent ("Rights Agent"), substantially
in the form submitted to the meeting, be, and they hereby are, in all
respects approved; that the appointment in the Rights Agreement of
Continental Stock Transfer & Trust Company as Rights Agent be, and it
hereby is, approved; and that the Chairman of the Board, the President and
any Senior Vice President or Vice President of the Company be, and each of
them hereby is, authorized to execute and deliver, in the name and on
behalf of the Company, a Rights Agreement in substantially said form, with
the blanks therein appropriately filled in and with such changes therein in
form and substance as such executing officer, as evidenced by such
officer's execution thereof, shall approve;
RESOLVED, that the exercise price of a Right shall be $60, subject to
adjustment as provided in the Rights Agreement, and that, in the event of
redemption as described in the Rights Agreement, the redemption price
<PAGE>
therefor shall be $.01 per Right and that, unless redeemed prior thereto,
the Rights shall expire on February 4, 2001;
RESOLVED, that as soon as practicable after February 4, 1998, the
officers of the Company be, and each of them hereby is, authorized to
deliver to all stockholders of record of the Company on February 4, 1998 a
copy of a Summary of Rights to Purchase Series A Junior Participating
Preferred Stock ("Summary of Rights"), substantially in the form submitted
to the meeting as Exhibit A to the Rights Agreement, with such changes
therein as such officers, as evidenced by such officers' delivery thereof,
shall approve;
RESOLVED, that in accordance with, and as provided in, the Rights
Agreement, prior to the earliest of the Distribution Date, the Expiration
Date, or the Final Expiration Date, as such terms are defined in the Rights
Agreement, the Rights, unless represented by a Certificate for Common Stock
bearing the legend referred to in the following resolution, will be
evidenced solely by the certificates for Common Stock registered in the
names of the holders thereof together with a copy of the Summary of Rights
and not by separate right certificates; that until the earliest of the
Distribution Date, the Expiration Date, or the Final Expiration Date, each
Right will be transferable only in connection with the transfer of a share
of Common Stock; and that the surrender for transfer of any certificate for
Common Stock outstanding on February 4, 1998, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the surrender for
transfer of the Rights associated with the Common Stock represented
thereby;
RESOLVED, that in accordance with, and as provided in, the Rights
Agreement, certificates for Common Stock issued after February 4, 1998, but
prior to the earliest of the Distribution Date, the Expiration Date, or the
Final Expiration Date, shall have impressed on, printed on, written on, or
otherwise affixed to them the legend provided for in the Rights Agreement,
and with respect to such certificates containing the foregoing legend, the
Rights associated with the Common Stock represented by such certificates
shall, until the earliest of the Distribution Date, the Expiration Date, or
the Final Expiration Date, be evidenced by such Common Stock certificates
alone, and the surrender for transfer of any such Common Stock certificate
shall also constitute the surrender for transfer of the Rights associated
with the Common Stock represented thereby;
RESOLVED, that the authorized transfer agents of the Company and
authorized registrars of the Company, as appropriate, be, and each of them
hereby is, authorized to take all such further action, and to execute and
deliver all such further instruments and documents, in the name and on
behalf of the Company, and to pay all such expenses as shall in their
<PAGE>
judgment be necessary, proper, or advisable in order fully to carry out the
intent and effectuate the purposes of the two immediately preceding
resolutions;
RESOLVED, that after February 4, 1998, but prior to the earlier of the
Expiration Date or the Final Expiration Date, one Right shall be delivered
with each share of Common Stock issued prior to the earlier of the
Expiration Date or the Final Expiration Date;
RESOLVED, that as soon as practicable after the Distribution Date, as
such term is defined in the Rights Agreement, pursuant to the provisions of
Section 3 of the Rights Agreement, the Chairman of the Board and the
Secretary of the Company be, and each of them hereby is, authorized to
execute or attest, as the case may be, by facsimile signatures, in the name
and on behalf of the Company, certificates evidencing the Rights ("Right
Certificate") substantially in the form submitted to the meeting as Exhibit
B to the Rights Agreement, with the blanks therein appropriately filled in,
and with such changes therein, in form and substance as such executing
officers, as evidenced by such officers' execution of the definitive form
of the Right Certificate, shall approve, and to deliver such Right
Certificates to the Rights Agent; and that the facsimile signatures of the
Chairman of the Board and the Secretary of the Company and the facsimile
seal of the Company which have been submitted to the meeting be, and they
hereby are, approved and adopted as the signatures of such officers and the
seal to be affixed to the Right Certificates in the name and on behalf of
the Company;
RESOLVED, that if any officer of the Company whose facsimile signature
appears upon any Right Certificate shall cease to be such an officer prior
to the issuance of such Right Certificate, the Right Certificate so bearing
such facsimile signature shall nevertheless be valid;
RESOLVED, that the Company file with the Securities and Exchange
Commission a Registration Statement (or Registration Statements) on Form
8-A (or any appropriate form then in effect) for the registration of the
Rights, as the case may be, on the exchange (or exchanges), if any, on
which the Rights are to be listed under the Securities Exchange Act of
1934; and that the officers of the Company be, and each of them hereby is,
authorized, at such times as to them shall seem advisable, to execute and
file or deliver any and all such applications, agreements, and other
instruments and documents as shall be necessary to effect such
registration;
RESOLVED, that the Company make application to The New York Stock
Exchange, Inc. or any other stock exchange deemed appropriate ("Exchange"),
for the listing (at the same time or at separate times) on such Exchange,
<PAGE>
subject to official notice of issuance, of the Rights, as the case may be,
the issuance of which have been authorized by the preceding resolutions;
that the officers of the Company be, and each of them hereby is, authorized
at such time as to them shall seem advisable, to make application for such
listing and, in connection therewith, to execute, in the name and on behalf
of the Company, and under its corporate seal or otherwise, and to file or
deliver all such applications, statements, certificates, agreements, and
other instruments and documents as shall be necessary to accomplish such
listing; and that such officers be, and each of them hereby is, authorized
to appear on behalf of the Company before the appropriate committee or body
of such Exchange as such appearance may be required with authority to make
such changes in any such listing application as shall be presented thereto
and in any agreements that may be made in connection therewith as, in their
or such officer's discretion, may be necessary to comply with the
requirements for such listing;
RESOLVED, that in consideration of The New York Stock Exchange, Inc.'s
not interposing any objection to the use by the Company of a facsimile
signature in connection with countersigning Right Certificates or
certificates for shares of Series A Preferred Stock, as the case may be,
the Company on behalf of itself, its successors and assigns, covenants and
agrees that every innocent purchaser for value of any such certificate
which (i) is in the form authorized by the Company, (ii) has been prepared
by a bank note company which has been duly authorized by the Company, (iii)
bears a facsimile signature for and on behalf of the Company or a facsimile
signature resembling or purporting to be such facsimile signature, and (iv)
has been, in the case of Right Certificates, authenticated by a manual or
facsimile signature of the Rights Agent, or in the case of Series A
Preferred Stock, registered by a manual or facsimile authorized signature
for and on behalf of an Authorized Registrar for the Series A Preferred
Stock, may rely upon such facsimile signature or any such facsimile
signature resembling or purporting to be such facsimile signature,
regardless of by whom or by what means the same may have been imprinted on
such certificate, and that any such facsimile signature or any such
facsimile signature resembling or purporting to be such facsimile signature
so relied on shall be as valid, effectual, conclusive, and binding for all
purposes upon the Company as if the same had in fact been signed manually
for and on behalf of the Company by its duly authorized officer or
employee; and that the Company hereby covenants and agrees to indemnify and
hold harmless The New York Stock Exchange, Inc., its directors, officers,
employees, and its subsidiary companies, the Rights Agent, the authorized
registrars for such Series A Preferred Stock, and every such innocent
purchaser for value from and against any and all loss, liability, claim,
damages, or expense (whether such claim be groundless or otherwise),
including costs, disbursements, and counsel fees, arising out of any act
<PAGE>
done in reliance upon the authenticity of any such facsimile signature or
any such facsimile signature resembling or purporting to be such facsimile
signature when imprinted as aforesaid;
RESOLVED, that the officers of the Company be, and each of them hereby
is, authorized, in the name and on behalf of the Company, to take any and
all action which he or they may deem necessary or advisable in order to
effect registration or qualification (or exemption therefrom) of the
Rights, as the case may be, for issuance, offer, sale, or trade under the
Blue Sky or other securities laws of any of the States of the United States
of America and in connection therewith to execute, acknowledge, verify,
deliver, file, or cause to be published any applications, reports, issuer's
covenants, consents to service of process, appointments of attorneys to
receive service of process, and other papers and instruments which may be
required under such laws, and to take any and all further action which they
or any one of them may deem necessary or advisable in order to maintain any
such registration or qualification of the Rights and the Series A Preferred
Stock, as the case may be, for as long as they deem necessary or as
required by law;
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Company in accordance with the provisions of its Articles
of Incorporation, a series of Preferred Stock of the Company be, and hereby
is, created and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional or other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series
A Preferred Stock") and the number of shares constituting such series shall
be 2,000,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions for adjustment hereinafter set forth,
the holders of shares of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, (i) cash dividends in an amount per
share (rounded to the nearest cent) equal to 100 times the aggregate per
share amount of all cash dividends declared or paid on the Common Stock,
$0.75 par value per share, of the Company (the "Common Stock") and (ii) a
preferential cash dividend (the "preferential Dividends"), if any, on the
first day of February, May, August and November of each year (each a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
<PAGE>
Dividend Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount equal to $13.50 per share
of Series A Preferred Stock less the per share amount of all cash dividends
declared on the Series A Preferred Stock pursuant to clause (i) of this
sentence since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Preferred
Stock. In the event the Company shall, at any time after the issuance of
any share or fraction of a share of Series A Preferred Stock, make any
distribution on the shares of Common Stock of the Company, whether by way
of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Company or otherwise, which is
payable in cash or any debt security, debt instrument, real or personal
property or any other property (other than cash dividends subject to the
immediately preceding sentence, a distribution of shares of Common Stock or
other capital stock of the Company or a distribution of rights or warrants
to acquire any such share, including any debt security convertible into or
exchangeable for any such share, at a price less than the Fair Market Value
of such share), then and in each such event the Company shall
simultaneously pay on each then outstanding share of Series A Preferred
Stock of the Company a distribution, in like kind, of 100 times such
distribution paid on a share of Common Stock (subject to the provisions for
adjustment hereinafter set forth). The dividends and distributions on the
Series A Preferred Stock to which holders thereof are entitled pursuant to
clause (i) of the first sentence of this paragraph and pursuant to the
second sentence of this paragraph are hereinafter referred to as
"Participating Dividends" and the multiple of such cash and non-cash
dividends on the Common Stock applicable to the determination of the
Participating Dividends, which shall be 100 initially but shall be adjusted
from time to time as hereinafter provided, is hereinafter referred to as
the "Dividend Multiple". In the event the Company shall at any time after
February 4, 1998 declare or pay any dividend or make any distribution on
Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding
shares of Common Stock into a greater or lesser number of shares of Common
Stock, then in each such case the Dividend Multiple thereafter applicable
to the determination of the amount of Participating Dividends which holders
of shares of Series A Preferred Stock shall be entitled to receive shall be
the Dividend Multiple applicable immediately prior to such event multiplied
by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Company shall declare each Participating Dividend at the same
time it declares any cash or non-cash dividend or distribution on the
<PAGE>
Common Stock in respect of which a Participating Dividend is required to be
paid. No cash or non-cash dividend or distribution on the Common Stock in
respect of which a Participating Dividend is required to be paid shall be
paid or set aside for payment on the Common Stock unless a Participating
Dividend in respect of such dividend or distribution on the Common Stock
shall be simultaneously paid, or set aside for payment, on the Series A
Preferred Stock.
(C) Preferential Dividends shall begin to accrue on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Series A Preferred Stock.
Accrued but unpaid Preferential Dividends shall cumulate but shall not bear
interest. Preferential Dividends paid on the shares of Series A Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the stockholders of the
Company. The number of votes which a holder of Series A Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Vote Multiple". In
the event the Company shall at any time after February 4, 1998 declare or
pay any dividend on Common Stock payable in shares of Common Stock, or
effect a subdivision or split or a combination, consolidation or reverse
split of the outstanding shares of Common Stock into a greater or lesser
number of shares of Common Stock, then in each such case the Vote Multiple
thereafter applicable to the determination of the number of votes per share
to which holders of shares of Series A Preferred Stock shall be entitled
after such event shall be the Vote Multiple immediately prior to such event
multiplied by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in the Articles of
Incorporation or By-laws, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Company.
(C) In the event that the Preferential Dividends accrued on the Series
A Preferred Stock for four or more quarterly dividend periods, whether
<PAGE>
consecutive or not, shall not have been declared and paid or set apart for
payment, the holders of record of Preferred Stock of the Company of all
series (including the Series A Preferred Stock), other than any series in
respect of which such right is expressly withheld by the Articles of
Incorporation or the authorizing resolutions included in the Certificate of
Designations therefor, shall have the right, at the next meeting of
stockholders called for the election of directors, to elect two members to
the Board of Directors, which directors shall be in addition to the number
required by the Bylaws prior to such event, to serve until the next Annual
Meeting and until their successors are elected and qualified or their
earlier resignation, removal or incapacity or until such earlier time as
all accrued and unpaid Preferential Dividends upon the outstanding shares
of Series A Preferred Stock shall have been paid (or set aside for payment)
in full. The holders of shares of Series A Preferred Stock shall continue
to have the right to elect directors as provided by the immediately
preceding sentence until all accrued and unpaid Preferential Dividends upon
the outstanding shares of Series A Preferred Stock shall have been paid (or
set aside for payment) in full. Such directors may be removed and replaced
by such stockholders, and vacancies in such directorships may be filled
only by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted by law; provided,
however, that any such action by stockholders shall be taken at a meeting
of stockholders and shall not be taken by written consent thereto.
(D) Except as otherwise required by the Articles of Incorporation,
By-laws, or applicable law or as set forth herein, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for the taking of any
corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever Preferential Dividends or Participating Dividends are in
arrears or the Company shall be in default of payment thereof, thereafter
and until all accrued and unpaid Preferential Dividends and Participating
Dividends, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid or set aside for payment in full, and in
addition to any and all other rights which any holder of shares of Series A
Preferred Stock may have in such circumstances, the Company shall not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration, any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
<PAGE>
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
dividends with the Series A Preferred Stock, unless dividends are paid
ratably on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled if
the full dividends accrued thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of this
paragraph 4(A), redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Company may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Company ranking junior
(both as to dividends and upon liquidation, dissolution or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on
a parity with the Series A Preferred Stock (either as to dividends or
upon liquidation, dissolution or winding up), except in accordance
with a purchase offer made to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any Subsidiary (as hereinafter
defined) of the Company to purchase or otherwise acquire for consideration
any shares of stock of the Company unless the Company could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such shares
at such time and in such manner. A "Subsidiary" of the Company shall mean
any corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a majority of
the board of directors or other persons performing similar functions are
beneficially owned, directly or indirectly, by the Company or by any
corporation or other entity that is otherwise controlled by the Company.
(C) The Company shall not issue any shares of Series A Preferred Stock
except upon exercise of Rights issued pursuant to that certain Rights
Agreement dated as of December 16, 1997 between the Company and Continental
Stock Transfer & Trust Company, a copy of which is on file with the
Secretary of the Company at its principal executive office and shall be
made available to stockholders of record without charge upon written
<PAGE>
request therefor addressed to said Secretary. Notwithstanding the foregoing
sentence, nothing contained in the provisions hereof shall prohibit or
restrict the Company from issuing for any purpose any series of Preferred
Stock with rights and privileges similar to, different from, or greater
than, those of the Series A Preferred Stock.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired promptly after the acquisition thereof. All such shares
upon their retirement shall be restored to the status of authorized but
unissued shares of Preferred Stock, without designation as to series, and
such shares may be reissued as part of a new series of Preferred Stock to
be created by resolution or resolutions of the Board of Directors.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Company, no
distribution shall be made (i) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock unless the holders of shares of Series
A Preferred Stock shall have received, with respect to each share of Series
A Preferred Stock, subject to adjustment as hereinafter provided, (A)
$6,000 plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, or (B) if greater than the amount specified in clause (i)(A) of
this sentence, an amount equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, as the same may be
adjusted as hereinafter provided, and (ii) to the holders of stock ranking
on a parity upon liquidation, dissolution or winding up with the Series A
Preferred Stock, unless simultaneously therewith distributions are made
ratably on the Series A Preferred Stock and all other shares of such parity
stock in proportion to the total amounts to which the holders of shares of
Series A Preferred Stock are entitled under clause (i)(A) of this sentence
and to which the holders of such parity shares are entitled, in each case
upon such liquidation, dissolution or winding up. The amount to which
holders of Series A Preferred Stock may be entitled upon liquidation,
dissolution or winding up of the Company pursuant to clause (i)(B) of the
foregoing sentence is hereinafter referred to as the "Participating
Liquidation Amount" and the multiple of the amount to be distributed to
holders of shares of Common Stock upon the liquidation, dissolution or
winding up of the Company applicable pursuant to said clause to the
determination of the Participating Liquidation Amount, as said multiple may
be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Liquidation Multiple". In the event the company shall
at any time after February 4, 1998 declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or split
or a combination, consolidation or reverse split of the outstanding shares
<PAGE>
of Common Stock into a greater or lesser number of shares of Common Stock,
then in each such case the Liquidation Multiple thereafter applicable to
the determination of the Participating Liquidation Amount to which holders
of Series A Preferred Stock shall be entitled after such event shall be the
Liquidation Multiple applicable immediately prior to such event multiplied
by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.
(A) In the event that holders of shares of Common Stock of the Company
receive after February 4, 1998 in respect of their shares of Common Stock
any share of capital stock of the Company (other than any share of Common
Stock of the Company), whether by way of reclassification,
recapitalization, reorganization, dividend or other distribution or
otherwise (a "Transaction"), then and in each such event the dividend
rights, voting rights and rights upon the liquidation, dissolution or
winding up of the Company of the shares of Series A Preferred Stock shall
be adjusted so that after such event the holders of Series A Preferred
Stock shall be entitled, in respect of each share of Series A Preferred
Stock held, in addition to such rights in respect thereof to which such
holder was entitled immediately prior to such adjustment, to (i) such
additional dividends as equal the Dividend Multiple in effect immediately
prior to such Transaction multiplied by the additional dividends which the
holder of a share of Common Stock shall be entitled to receive by virtue of
the receipt in the Transaction of such capital stock, (ii) such additional
voting rights as equal the Vote Multiple in effect immediately prior to
such Transaction multiplied by the additional voting rights which the
holder of a share of Common Stock shall be entitled to receive by virtue of
the receipt in the Transaction of such capital stock and (iii) such
additional distributions upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior to
such Transaction multiplied by the additional amount which the holder of a
share of Common Stock shall be entitled to receive upon liquidation,
dissolution or winding up of the Company by virtue of the receipt in the
Transaction of such capital stock, as the case may be, all as provided by
the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the Company
receive after February 4, 1998 in respect of their shares of Common Stock
any right or warrant to purchase Common Stock (including as such a right,
for all purposes of this paragraph, any security convertible into or
exchangeable for Common Stock) at a purchase price per share less than the
Fair Market Value (as hereinafter defined) of a share of Common Stock on
<PAGE>
the date of issuance of such right or warrant, then and in each such event
the dividend rights, voting rights and rights upon the liquidation,
dissolution or winding up of the Company of the shares of Series A
Preferred Stock shall each be adjusted so that after such event the
Dividend Multiple, the Vote Multiple and the Liquidation Multiple shall
each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to
such event multiplied by a fraction the numerator of which shall be the
number of shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the maximum number of shares of Common
Stock which could be acquired upon exercise in full of all such rights or
warrants and the denominator of which shall be the number of shares of
Common Stock outstanding immediately before such issuance of rights or
warrants plus the number of shares of Common Stock which could be
purchased, at the Fair Market Value of the Common Stock at the time of such
issuance, by the maximum aggregate consideration payable upon exercise in
full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of the Company
receive after February 4, 1998 in respect of their shares of Common Stock
any right or warrant to purchase capital stock of the Company (other than
shares of Common Stock), including as such a right, for all purposes of
this paragraph, any security convertible into or exchangeable for capital
stock of the Company (other than Common Stock), at a purchase price per
share less than the Fair Market Value of such shares of capital stock on
the date of issuance of such right or warrant, then and in each such event
the dividend rights, voting rights and rights upon liquidation, dissolution
or winding up of the Company of the shares of Series A Preferred Stock
shall each be adjusted so that after such event each holder of a share of
Series A Preferred Stock shall be entitled, in respect of each share of
Series A Preferred Stock held, in addition to such rights in respect
thereof to which such holder was entitled immediately prior to such event,
to receive (i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such event multiplied, first, by the additional
dividends to which the holder of a share of Common Stock shall be entitled
upon exercise of such right or warrant by virtue of the capital stock which
could be acquired upon such exercise and multiplied again by the Discount
Fraction (as hereinafter defined) and (ii) such additional voting rights as
equal the Vote Multiple in effect immediately prior to such event
multiplied, first, by the additional voting rights to which the holder of a
share of Common Stock shall be entitled upon exercise of such right or
warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction and (iii) such
additional distributionS upon liquidation, dissolution or winding up of the
Company as equal the Liquidation Multiple in effect immediately prior to
such event multiplied, first, by the additional amount which the holder of
<PAGE>
a share of Common Stock shall be entitled to receive upon liquidation,
dissolution or winding up of the Company upon exercise of such right or
warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator
of which shall be the difference between the Fair Market Value of a share
of the capital stock subject to a right or warrant distributed to holders
of shares of Common Stock of the Company as contemplated by this paragraph
immediately after the distribution thereof and the purchase price per share
for such share of capital stock pursuant to such right or warrant and the
denominator of which shall be the Fair Market Value of a share of such
capital stock immediately after the distribution of such right or warrant.
(D) For purposes of this Section 7, the "Fair Market Value" of a share
of capital stock of the Company (including a share of Common Stock) on any
date shall be deemed to be the average of the daily closing price per share
thereof over the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that, in the
event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30
Trading Days after (i) the ex-dividend date for a dividend or distribution
on stock payable in shares of such stock or securities convertible into
shares of such stock, or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or reclassification of such
stock, then, and in each such case, the Fair Market Value shall be
appropriately adjusted by the Board of Directors of the Company to take
into account ex-dividend or post-effective date trading. The closing price
for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way (in either case, as reported in the applicable
transaction reporting system with respect to securities listed or admitted
to trading on the New York Stock Exchange), or, if the shares are not
listed or admitted to trading on the New York Stock Exchange, as reported
in the applicable transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares
are listed or admitted to trading or, if the shares are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use or, if on any such date the
shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the shares selected by the Board of Directors of the Company. The
term "Trading Day" shall mean a day on which the principal national
securities exchange on which the shares are listed or admitted to trading
<PAGE>
is open for the transaction of business or, if the shares are not listed or
admitted to trading on any national securities exchange, on which the New
York Stock Exchange or such other national securities exchange as may be
selected by the Board of Directors of the Company is open. If the shares
are not publicly held or not so listed or traded on any day within the
period of 30 Trading Days applicable to the determination of Fair Market
Value thereof as aforesaid, "Fair Market Value" shall mean the fair market
value thereof per share as determined in good faith by the Board of
Directors of the Company. In either case referred to in the foregoing
sentence, the determination of Fair Market Value shall be described in a
statement filed with the Secretary of the Company.
Section 8. CONSOLIDATION, MERGER, ETC. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each
outstanding share of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case
may be, for which or into which each share of Common Stock is changed or
exchanged multiplied by the highest of the Vote Multiple, the Dividend
Multiple or the Liquidation Multiple in effect immediately prior to such
event.
Section 9. EFFECTIVE TIME OF ADJUSTMENTS.
(A) Adjustments to the Series A Preferred Stock required by the
provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each holder of a
share of Series A Preferred Stock of the effect of any adjustment to the
voting rights, dividend rights or rights upon liquidation, dissolution or
winding up of the Company of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the Company to give
such notice shall not affect the validity of or the force or effect of or
the requirement for such adjustment.
Section 10. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may
acquire shares of Series A Preferred Stock in any other manner permitted by
law, the provisions hereof and the Articles of Incorporation of the
Company.
<PAGE>
Section 11. RANKING. Unless otherwise provided in the Articles of
Incorporation of the Company or a Certificate of Designations relating to a
subsequent series of preferred stock of the Company, the Series A Preferred
Stock shall rank junior to all other series of the Company's Preferred
Stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding up and senior to the Common Stock.
Section 12. AMENDMENT. The provisions hereof and the Articles of
Incorporation of the Company shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series A Preferred
Stock without, in addition to any other vote of stockholders required by
law, the affirmative vote of the holders of two-thirds or more of the
outstanding shares of Series A Preferred Stock, voting together as a single
class.
I further certify that the above resolutions have not been altered,
revoked or rescinded as of this date.
Dated this ____ day of _______, 199_.
______________________________
(Corporate Seal)
