SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 8-A/A
AMENDING FORM 8-A DATED MARCH 6, 1986
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
The Kroger Co.
--------------
(Exact name of registrant as specified in its charter)
Ohio 31-0345740
---- ----------
(State of incorporation or organization)(I.R.S. Employer
Identification No.)
1014 Vine Street, Cincinnati, Ohio 45202
- ----------------------------------- -----
(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
registered each class is to be registered
- ---------- ------------------------------
Common Stock Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the
Act:
None
----
(Title of Class)
<PAGE>
This Form 8-A/A amends and supplements the Form 8-A (the "Form
8-A") filed by The Kroger Co. (the "Company") on March 6, 1986
with respect to Common Stock Purchase Rights.
Item 1. Description of Securities to be Registered.
Item 1 of the Form 8-A is amended by substituting the
following:
On February 28, 1986, the Board of directors of the
Kroger Co. (the "Company") declared a dividend distribution of
one Right for each outstanding share of Common Stock, $1.00
par value, of the Company (the "Common Shares"), payable to
the holders of record of the Common Shares on March 19, 1986.
On November 30, 1995, the Board of Directors of the
Company adopted amendments to the Rights Agreement (the "Prior
Rights Agreement") dated as of March 5, 1986 between the
Company and The First National Bank of Cincinnati, whose
interest has been succeeded to by The Bank of New York (the
"Rights Agent") pursuant to which the Common Stock Purchase
Rights registered under the Form 8-A were issued. The
amendments are set forth in an Amended and Restated Rights
Agreement (the "Rights Agreement") dated as of November 30,
1995 between the Company and the Rights Agent, which
supersedes the Prior Rights Agreement. A copy of the Rights
Agreement is attached as an exhibit hereto and is hereby
incorporated by reference. The following summary of the
Rights is qualified in its entirety by reference to the Rights
Agreement.
As of the date of this Form 8-A/A, there is associated
with each outstanding Common Share one Right which, except as
set forth below, when exercisable, entitles the registered
holder to purchase from the Company one Common Share at a
price of $175 per share (the "Purchase Price"), subject to
adjustment.
Until the earlier to occur of (i) ten days following a
public announcement that, without the prior consent of the
Board of Directors of the Company, a person or group,
including any affiliates or associates of such person or group
(an "Acquiring Person"), acquired, or obtained the right to
acquire, beneficial ownership of 10% or more of the
outstanding Common Shares (the "Stock Acquisition Date") or
(ii) ten business days (or such later date as the Board may
determine) following the commencement or announcement of an
intention (which is not subsequently withdrawn) to make a
tender offer or exchange offer which would result in any
person or group (and related persons) having beneficial
ownership of 10% or more of the outstanding Common Shares
without the prior consent of the Board of Directors (the
earlier of such dates being called the "Distribution Date"),
the Rights will be attached to all Common Share certificates
and will be evidenced, with respect to any of the Common Share
certificates outstanding as of November 30, 1995, by the
Common Share certificates. The Rights Agreement provides
that, until the Distribution Date, the Rights will be
transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued after November
30, 1995 (or as soon thereafter as is reasonably practicable)
upon transfer, replacement or new issuance of Common Shares
will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of
any Common Share certificates outstanding as of November 30,
1995, even without such a notation, will also constitute the
transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed
to holders of record of the Common Shares as of the close of
business on the Distribution Date, and the separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on March 19, 2006, unless
earlier redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person,
each holder of a Right generally will thereafter have the
right for a 60 day period (or such other period set by the
Board of Directors) to receive upon exercise of the Right that
number of shares of Common Stock having a market value
(immediately prior to the occurrence of an Acquiring Person)
of two times the exercise price of the Right (such right being
called the "Subscription Right"). Notwithstanding the
foregoing, following the occurrence of an Acquiring Person,
all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by the
Acquiring Person or any affiliate or associate thereof will be
null and void.
In the event that, at any time following the Stock
Acquisition Date, the Company is acquired in a merger or other
business combination transaction or 50% or more of the
Company's assets or earning power are sold (in one transaction
or a series of transactions), proper provision shall be made
so that each holder of a Right shall thereafter have the right
to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company (or, in the event there is more
than one acquiring company, the acquiring company receiving
the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have
a market value of two times the exercise price of the Right
(such right being called the "Merger Right"). The holder of a
Right will continue to have the Merger Right whether or not
such holder exercises the Subscription Right.
The Purchase Price payable, the number of Rights, and the
number of Common Shares or other securities or property
issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of the Common Shares, (ii) upon the grant to
holders of the Common Shares of certain rights or warrants to
subscribe for Common Shares or shares having the same rights,
privileges and preferences as the Common Shares at less than
the current market price of the Common Shares or (iii) upon
the distribution to holders of the Common Shares of evidences
of indebtedness or assets (excluding regular quarterly cash
dividends and excluding dividends payable in Common Shares) or
of subscription rights or warrants (other than those referred
to above.)
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments requires
an adjustment of at least 1% in such Purchase Price. No
fractional shares will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of
the Common Shares on the last trading date prior to the date
of exercise.
At any time prior to the earliest to occur of (i) the
close of business on the Stock Acquisition Date or (ii) the
expiration of the Rights, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective upon
the action of the Board of Directors. Additionally, following
the Stock Acquisition Date and the expiration of the period
during which the Subscription Right is exercisable, the
Company may redeem the then outstanding Rights in whole, but
not in part, at the Redemption Price, provided that such
redemption is in connection with a merger or other business
combination transaction or series of transactions involving
the Company in which all holders of Common Stock are treated
alike but not involving an Acquiring Person or its affiliates
or associates. Upon the effective date of the redemption of
the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive
the Redemption Price.
All of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board
in order to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring
Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group
that attempts to acquire the Company without conditioning the
offer on the Rights being redeemed or a substantial number of
Rights being acquired. However, the Rights should not
interfere with any merger or other business combination
approved by the Board of Directors.
The form of Amended and Restated Rights Agreement between
the Company and The Bank of New York specifying the terms of
the Rights, Exhibit A thereto -- the Form of Rights
Certificate -- and Exhibit B thereto -- the Summary of Rights
to Purchase Stock -- are attached hereto as Exhibit 1 and are
incorporated herein by reference. The foregoing description
of the Rights is qualified by reference to the Amended and
Restated Rights Agreement.
Item 2. Exhibits.
1. Form of Amended and Restated Rights Agreement dated
as of November 30, 1995 between The Kroger Co. and The Bank of
New York which includes as Exhibit A thereto, the form of
Rights Certificate. Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until 10 days after a person
acquires beneficial ownership of 10% or more of the Common
Shares or a person commences or announces its intention to
commence an offer if, upon consummation thereof, such person
would become the beneficial owner of 10% or more of the Common
Shares.
<PAGE>
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.
THE KROGER CO.
By /s/ Paul Heldman
Paul Heldman
Vice President, Secretary and
General Counsel
Date: January 17, 1996
<PAGE>
EXHIBIT INDEX
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Exhibit Description
- ------- -----------
1 Form of Amended and Restated Rights Agreement dated
as of November 30, 1995 between The Kroger Co. and
The Bank of New York which includes as Exhibit A
thereto, the form of Rights Certificate. Pursuant
to the Rights Agreement, Rights Certificates will
not be mailed until 10 days after a person acquires
beneficial ownership of 10% or more of the Common
Shares or a person commences or announces its
intention to commence an offer if, upon consummation
thereof, such person would become the beneficial
owner of 10% or more of the Common Shares.
<PAGE>
THE KROGER CO.
and
THE BANK OF NEW YORK
Rights Agent
_____________
Amended and Restated Rights Agreement
Dated as of November 30, 1995
<PAGE>
Table of Contents
Section
- -------
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
<PAGE>
AMENDED AND RESTATED RIGHTS AGREEMENT
This Agreement, dated as of November 30, 1995, between
The Kroger Co., an Ohio corporation (the "Company"), and The
Bank of New York (the "Rights Agent").
W I T N E S S E T H
-------------------
WHEREAS, on February 28, 1986, the Board of Directors of
the Company authorized and declared a dividend distribution of
one Right (as hereinafter defined) for each outstanding share
of Common Stock, par value $1.00 per share, of the Company
(the "Common Stock") outstanding on March 19, 1986, (the
"Record Date"), and contemplated the issuance of one Right (a
"Right") for each share of Common Stock of the Company issued
between the Record Date and the earliest of the Distribution
Date and the Expiration Date (as such terms are hereinafter
defined), each Right representing the right to purchase Common
Stock, upon the terms and subject to the conditions
hereinafter set forth in the Agreement dated as of March 5,
1986 between the Company and the Rights Agent (the "Prior
Rights Agreement"); and
WHEREAS, the Board of Directors of the Company has
determined that it is advisable and in the best interests of
the Company (upon consideration of the interests of the
Company's shareholders and the matters set forth in division
(E) of Section 1701.59 of the Ohio Revised Code) to amend and
restate in its entirety the Prior Rights Agreement as set
forth herein and the Rights shall henceforth be governed by
the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Certain Definitions. For purposes of this
-------------------
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and
Associates (as such term is hereinafter defined) of such
Person, without the prior approval of the Board of Directors
of the Company, shall be the Beneficial Owner (as such term is
hereinafter defined) of 10% or more of the shares of Common
Stock then outstanding or who was such a Beneficial Owner at
any time after the date hereof, whether or not such Person
continues to be the Beneficial Owner of 10% or more of the
outstanding shares of Common Stock, but shall not include the
Company, any subsidiary of the Company (as such term is
hereinafter defined), any employee benefit plan of the Company
or any of its subsidiaries, any entity holding shares of
Common Stock organized, appointed or established by the
Company or any of its subsidiaries for or pursuant to the
terms of any such plan or any trustee or administrator of any
such plan.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right or obligation
to acquire (whether such right or obligation is
exercisable or effective immediately or only after the
passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially
own," securities tendered pursuant to a tender or
exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B)
the right to vote pursuant to any agreement, arrangement
or understanding (whether or not in writing); provided,
however, that a Person shall be not be deemed the
"Beneficial Owner" of, or to "beneficially own," any
security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1)
arises solely from a revocable proxy given in response to
a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then
reportable by such person on Schedule 13D nder the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (B)
of subparagraph (ii) of this paragraph (c)) or disposing
of any securities of the Company.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in
the State of Ohio are authorized or obligated by law or
executive order to close.
(e) "Close of business" on any given date shall mean
5:00 P.M., Cincinnati time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00
P.M., Cincinnati time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the Common Stock, par
value $1.00 per share, of the Company, except that "Common
Stock" when used with reference to any Person other than the
Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interest
having power to control or direct the management, of such
Person or, if such Person is a subsidiary of another Person,
the Person which ultimately controls such first-mentioned
Person and which has issued and outstanding such capital
stock, equity securities or equity interests.
(g) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(h) "Stock Acquisition Date" shall mean the first date
of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.
(i) A "subsidiary" of any person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or voting interests is
owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
Section 2. Appointment of Rights Agent. The Company
---------------------------
hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable.
In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agents and any
Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Rights Certificates.
-----------------------------
(a) Until the 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 of the Company) after the date of the commencement
of, or first public announcement of the intent of any Person
(other than the Company, any subsidiary of the Company, or any
employee benefit plan of the Company or any of its
subsidiaries, any Person or entity organized, appointed or
established by the Company or any of its subsidiaries for or
pursuant to the terms of any employee benefit plan or any
trustee or administrator of any such plan) to commence (which
intention to commence remains in effect for five business days
after such announcement), a tender or exchange offer which
would result in such Person becoming an Acquiring Person (the
earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3)
by the certificates for Common Stock registered in the names
of the holders of the Common Stock (which certificates for
Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights
(and the right to receive certificates therefor) will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the
Company); provided, however, that if a tender or exchange
offer is terminated prior to the occurrence of the
Distribution Date, then no Distribution Date shall occur as a
result of that tender or exchange offer. As soon as
practicable after the Distribution Date, the Rights Agent will
send by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of business
on the Distribution Date, at the address of such holder shown
on the records of the Company, a certificate for Rights, in
substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common
Stock so held. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) With respect to certificates for the Common Stock
outstanding as of the date of this Agreement, until the
Distribution Date (or earlier redemption, expiration or
termination of the Rights), the Rights will be evidenced by
such certificates for the Common Stock with or without a copy
of the Summary of Rights attached thereto and the registered
holders of the Common Stock shall also be the registered
holders of the associated Rights. Until the Distribution Date
(or earlier redemption, expiration or termination of the
Rights), the surrender for transfer of any of the certificates
for the Common Stock outstanding on the Record Date, even
without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
(c) Certificates for the Common Stock issued after the
date of this Agreement (or as soon thereafter as is reasonably
practicable), but prior to the earlier of the Distribution
Date or the Expiration Date (as such term is hereinafter
defined), shall be deemed also to be certificates for Rights,
and shall have impressed, printed, stamped, written or
otherwise affixed onto them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in an Amended and
Restated Rights Agreement between The Kroger Co. and The
Bank of New York (the "Rights Agent") dated as of
November 30,1995 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of The
Kroger Co. Under certain circumstances, as set forth in
the Rights Agreement, such Rights may be redeemed, may
expire, or may be evidenced by separate certificates and
will no longer be evidenced by this certificate. The
Kroger Co. will mail to the holder of this certificate a
copy of the Rights Agreement without charge within five
days after receipt of a written request therefor. Under
certain circumstances, Rights issued to Acquiring Persons
(as defined in the Rights Agreement) or certain related
persons and any subsequent holder of such Rights may
become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Stock represented by such certificates shall
be evidenced by such certificates alone, and the surrender for
transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificate. If the Company purchases or
otherwise acquires shares of Common Stock prior to the
Distribution Date, any Rights associated with such Common
Stock shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with
the share of Common Stock which are no longer outstanding.
Section 4. Form of Rights Certificates.
----------------------------
(a) The Rights Certificates (and the forms of election
to purchase shares and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set
forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to
conforn to usage. Subject to the provisions of Section 11 and
Section 23 hereof, the Rights Certificates, whenever
distributed, on their face shall entitle the holders thereof
to purchase such number of shares of Common Stock as shall be
set forth therein at the price per share set forth therein
(the "Purchase Price"), but the number of such shares and the
Purchase Price shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 23 hereof that represents Rights beneficially
owned by an Acquiring Person or any Associate or Affiliate
thereof and any Rights Certificate issued at any time upon the
transfer of any Rights to such an Acquiring Person or any
Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate, and any Rights
Certificate issued pursuant to Section 6 or Section 11 upon
transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain
the following legend:
The Rights represented by this Rights Certificate were
issued to a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby
are null and void.
The provisions of Section 7(e) of this Rights Agreement shall
be operative whether or not the foregoing legend is contained
on any such Rights Certificate.
Section 5. Countersignature and Registration. The
----------------------------------
Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, any Vice Chairman of the Board,
any President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested
by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights
Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall
have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered by the Company with the
same force and effect as though the person who signed such
Rights Certificates had not ceased to be such officer of the
Company; and any Rights Certificates may be signed on behalf
of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement
any such person was not such an officer.
Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at one of its offices, books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the number
of Rights evidenced on its face by each of the Rights
Certificates and the certificate number and the date of each
of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
-----------------------------------------------
Rights Certificates; Mutilated, Destroyed, Lost or Stolen
- ---------------------------------------------------------
Rights Certificates. Subject to the provisions of Section 4
- -------------------
(b), Section 7(e) and Section 15 hereof, at any time after the
close of business on the Distribution Date, and at or prior to
the close of business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Rights
Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock as the Rights
Certificate or Rights Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate
shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Rights
Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the
Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the
Company will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
-----------------------------------
Expiration Date of Rights.
- -------------------------
(a) The registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date upon presentation of the Rights Certificate,
with the appropriate form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of
the Purchase Price for each share of Common Stock as to which
the Rights are exercised, at or prior to the earlier of (i)
the close of business on (i) March 19, 2006 (the "Final
Expiration Date"), or (ii) the date on which the Rights are
redeemed as provided in Section 24 hereof (such earlier time
being herein referred to as the "Expiration Date").
Notwithstanding any other provision of this Agreement, any
Person who prior to the Distribution Date becomes a record
holder of shares of Common Stock may exercise all of the
rights of a registered holder of a Rights Certificate with
respect to the Rights associated with such shares of Common
Stock in accordance with and subject to the provisions of this
Agreement, including the provisions of Section 7(e) hereof, as
of the date such Person becomes a record holder of shares of
Common Stock.
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $175,
shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the appropriate form of election to
purchase duly executed, accompanied by payment of the Purchase
Price for the shares to be purchased and an amount equal to
any applicable transfer tax (as determined by the Rights
Agent) in cash, or by certified check or bank draft payable to
the order of the Company, the Rights Agent shall, subject to
Section 21(k), thereupon promptly (i) requisition from any
transfer agent of the shares of Common Stock (or make
available, if the Rights Agent is the transfer agent)
certificates for the number of shares of Common Stock to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash,
if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 15, (iii) promptly after receipt of
such certificates, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt promptly
deliver such cash to or upon the order of the registered
holder of such Rights Certificate. In addition, in the case
of an exercise of the Rights by a holder pursuant to Section
11(a)(ii), the Rights Agent shall return such Rights
Certificate to the registered holder thereof after imprinting,
stamping or otherwise indicating thereon that the rights
represented by such Rights Certificate no longer include the
rights provided by Section 11(a)(ii) of the Rights Agreement
and if less than all the Rights represented by such Rights
Certificate were so exercised, the Rights Agent shall indicate
that rights under Section 11(a)(ii) continue to the extent the
Rights were not previously exercised pursuant thereto.
(d) In case the registered holder of any Rights
Certificate shall exercise (except pursuant to Section
11(a)(ii)) less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Rights Certificate
or to his duly authorized assigns, subject to the provisions
of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the time an Acquiring Person becomes
such, any Rights beneficially owned by (i) an Acquiring Person
or an Affiliate or Associate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any Affiliate or
Associate thereof) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any Affiliate or Associate thereof)
who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom
the Acquiring Person has a continuing agreement, arrangement
or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with,
but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set
forth in this Section 7 unless the certificate contained in
the appropriate form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such
exercise shall have been completed and signed by the
registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
--------------------------------------
Certificates. All Rights Certificates surrendered for the
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purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be
issued in lieu thereof except as expressly permitted by any of
the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent
shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Reservation and Availability of Common Stock.
--------------------------------------------
The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
shares of Common Stock or any authorized and issued shares of
Common Stock held in its treasury, the number of shares of
Common Stock that will be sufficient to permit the exercise in
full of all outstanding Rights; provided, however that the
Company need not so reserve and keep available shares of
Common Stock which may be required by Section 11(a)(ii) until
the occurrence of any event specified in such Section.
So long as the shares of Common Stock (or other
securities, as the case may be) issuable upon the exercise of
the Rights may be listed on any national securities exchange,
the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of
Common Stock (or other securities, as the case may be)
delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable shares (or
securities).
The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates or of any
certificates for shares of Common Stock (or other securities,
as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of
Rights Certificates to a person other than, or in respect of
the issuance or delivery of the shares of Common Stock (or
other securities, as the case may be) in a name other than
that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or
deliver any certificates for shares of Common Stock (or other
securities, as the case may be) in a name other than that of
the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
The Company shall use its best efforts to (i) file, as
soon as practicable following the Distribution Date, a
registration statement under the Securities Act of 1933 (the
"Act"), with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as
practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the
date of the expiration of the rights provided by Section 11
(a)(ii). The Company will also take such action as may be
appropriate under the blue sky laws of the various states.
Section 10. Common Stock Record Date. Each person in
------------------------
whose name any certificate for shares of Common Stock (or
other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Common Stock (or
other securities, as the case may be) represented thereby on,
and such certificate shall be dated, the date upon which the
Rights Certificate evidencing such Rights was duly presented
and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such
presentation and payment is a date upon which the Common Stock
(or other securities, as the case may be) transfer books of
the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day
on which the Common Stock (or other securities, as the case
may be) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a
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 Purchase Price, Number and
----------------------------------------
Kind of Shares or Number of Rights. The Purchase Price, the
- ----------------------------------
number and kind of shares covered by each Right and the number
of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
(a)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Common Stock payable in shares of Common Stock, (B) subdivide
the outstanding Common Stock, (C) combine the outstanding
Common Stock into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the
Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to
such date and at a time when the Common Stock transfer books
of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon exercise of one Right be less than the aggregate
par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to
any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person,
then proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e) hereof, shall, for a
period of 60 days (or such other shorter or longer period as
may be established by action of a majority of the Board of
Directors) after the later of the occurrence of any such event
and the effective date of an appropriate registration
statement pursuant to Section 9, have a right to receive, upon
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement such number of
shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase
Price by the then number of shares of Common Stock for which a
Right is exercisable immediately prior to the first occurrence
of such event and dividing that product by (y) 50% of the
current market price per share of the Common Stock (determined
pursuant to Section 11(d)) on the date of such first
occurrence (such number of shares being referred to as the
"number of Adjustment Shares").
(iii) In the event that there shall not be sufficient
Treasury shares or authorized but unissued shares of Common
Stock to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii),
notwithstanding any other provision of this Agreement, to the
extent necessary and permitted by applicable law, each Right
shall thereafter represent the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with
the terms of this Agreement, (x) a number of (or fractions of)
shares of Common Stock (up to a maximum number of shares of
Common Stock which may permissibly be issued) and (y) a number
of (or fractions of) other equity securities of the Company
which the Board of Directors of the Company has determined to
have the same current per share market price (determined
pursuant to Section 11(d)(i) and (ii) hereof) as one share of
Common Stock (such number of (or fractions of other equity
securities of the Company) being referred to as a "common
stock equivalent"), equal in the aggregate to the number of
Adjustment Shares; provided, however, if there are unavailable
sufficient shares of Common Stock and/or shares of common
stock equivalents, then the Company shall, to the extent
permitted by applicable law, take all such action as may be
necessary to authorize additional shares of Common Stock or
common stock equivalents for issuance upon exercise of the
Rights, including the calling of or meeting of shareholders;
provided, further however, if the Company is unable to cause
the authorization of a sufficient number of additional shares
of Common Stock or common stock equivalents to be available
for issuance upon exercise in full of the Rights, then, in the
event the Rights become so exercisable, notwithstanding any
other provision of this Agreement, each Right shall thereafter
represent the right to receive the Adjusted Number of Common
Shares upon exercise at the Adjusted Purchase Price (as such
terms are hereinafter defined). As used herein, the term
Adjusted Number of Shares of Common Stock shall be equal to
that number of (or fractions of) shares of Common Stock and/or
common stock equivalents equal to the product of (x) the
number of Adjustment Shares and (y) a fraction, the numerator
of which is the number of shares (or fractions of) of Common
Stock and/or common stock equivalents available for issuance
upon exercise of the Rights and the denominator of which is
the aggregate number of Adjustment Shares otherwise issuable
upon exercise in full of all Rights (assuming there were
sufficient shares of Common Stock available) (such fraction
being referred to as the "Proration Factor"). The Adjusted
Purchase Price shall mean the product of the Purchase Price
and the Proration Factor. The Board of Directors may, but
shall not be required to, establish procedures to allocate the
right to receive shares of Common Stock and common stock
equivalents upon exercise of the Rights among holders of
Rights.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Common Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Common Stock or securities convertible into Common
Stock) at a price per share of Common Stock (or having a
conversion price per share, if a security convertible into
Common Stock) less than the current market price (as defined
in Section 11 (d)) per share of Common Stock on such record
date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of
shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock to be offered
(and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at
such current market price and the denominator of which shall
be the number of shares of Common Stock outstanding on such
record date, plus the number of additional shares of Common
Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are
initially convertible); provided, however, that in no event
shall the consideration to be paid upon exercise of one Right
be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the
value of such consideration shall be determined reasonably and
with good faith to the holders of Rights by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall
be binding on the Rights Agent. Shares of Common Stock owned
by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights or warrants
are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the
making of a distribution to all holders of Common Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend), assets (other than a
dividend payable in Common Stock, but including any dividend
payable in stock other than Common Stock) or subscription
rights or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction,
the numerator of which shall be the current market price (as
defined in Section 11(d)) per share of Common Stock on such
record date, less the fair market value (as determined
reasonably and with utmost good faith to the holders of Rights
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent) of the portion of
the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants
distributable in respect of one share of Common Stock and the
denominator of which shall be current market price per share
of the Common Stock; provided, however, that in no event shall
the consideration to be paid upon exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right.
Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution
is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would be in effect if such record
date had not been fixed.
(d) For the purpose of any computation hereunder, the
"current market price" per share of Common Stock (or any other
security) on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock (or 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 current per
share market price of the Common Stock (or such other
security) is determined during a period following the
announcement by the issuer of such Common Stock (or such other
security, as the case may be) of (i) a dividend or
distribution on such Common Stock (or such other security, as
the case may be) payable in shares of such Common Stock (or
such other security, as the case may be) or securities
convertible into shares of such Common Stock (or such other
security, as the case may be) or (ii) any subdivision,
combination or reclassification of such Common Stock (or such
other security), and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case,
the "current market price" shall be properly adjusted to take
into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the shares of Common Stock
(or such other security) are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which the shares of Common Stock (or such other
security) are listed or admitted to trading or, if the shares
of Common Stock (or such other security) or not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers,
Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the shares of
Common Stock (or such other security) are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Common Stock (or such other security) selected
by the Board of Directors of the Company. If on any such date
no market maker is making a market in the Common Stock (or
such other security), the fair value of such shares on such
date as determined reasonably and with good faith the holders
of Rights by the Board of Directors of the Company shall be
used and shall be binding on the Rights Agent. The term,
"Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock (or
such other security) are listed or admitted to trading is open
for the transaction of business or, if the shares of Common
Stock (or such other security) are not listed or admitted to
trading on any national securities exchange, a Business Day.
If the Common Stock (or such other security) is not publicly
held or not so listed or traded, "current market price" per
share shall mean the fair value per share determined
reasonably and with good faith to the holders of Rights by the
Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least
1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Common Stock (or such
other security), as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required
by this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which
mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock
of the Company other than Common Stock, thereafter the number
of such other shares so receivable upon exercise of any Right
shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the
provisions with respect to the shares contained in Section
11(a) through (c), inclusive, and the provisions of Sections
7, 9, 10, 13 and 15 hereof with respect to the Common Stock
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Section
11(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right
to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest
ten-thousandth) obtained by (i) multiplying (x) the number of
shares of Common Stock covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
shares of Common Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of
shares of Common Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten
thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement
of its election to adjust the number of rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be
the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates
evidencing, subject to Section 15 hereof, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock
issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares
which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of the shares of Common Stock (or other
securities) issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares
of Common Stock (or other securities) at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date the
shares of Common Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and
above the shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver
to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such
adjustment.
(m) Anything to the contrary in this Section 11
notwithstanding, the Company, by action of a majority of the
Board of Directors, shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent
that it in its sole discretion shall determine to be advisable
in order that any consolidation or subdivision of the Common
Stock, issuance wholly for cash of any shares of Common Stock
at less than the current market price, issuance wholly for
cash of shares of Common Stock or securities which by their
terms are convertible into or exchangeable for shares of
Common Stock, stock dividends or issuance of rights, options
or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Common Stock
shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with
any other Person (other than a subsidiary of the Company in a
transaction which does not violate Section 11(o) hereof), (ii)
merge with or into any other Person (other than a subsidiary
of the Company in a transaction which does not violate Section
11(o) hereof), or (iii) sell or transfer (or permit any
subsidiary to sell or transfer), in one transaction, or a
series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of
the Company and its subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of
its subsidiaries in one or more transactions each of which
does not violate Section 11(o) hereof), if (x) at the time of
or immediately after such consolidation, merger, sale or
transfer there are any charter or by-law provisions or any
rights, warrants or other instrument or securities outstanding
or agreements in effect or other actions taken, which would
materially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any
of its Affiliates and Associates. The Company shall not
consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such other Person shall
have executed and delivered to the Rights Agent a supplemental
agreement evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section
24 or Section 27 hereof, take (or permit any subsidiary to
take) any action the purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the
effect of such action is to, diminish or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that at any time after the date
of this Agreement and prior to the Distribution Date, the
Company shall (i) declare or pay any dividend on the shares of
Common Stock payable in shares of Common Stock or (ii) effect
a subdivision, combination or consolidation of the shares of
Common Stock (by reclassification or otherwise than by payment
of dividends in Common Stock) into a greater or lesser number
of shares of Common Stock, then in any such case, the number
of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so
that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior
to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such
event. The adjustments provided for in this Section 11(p)
shall be made successively whenever such dividend is declared
or paid or such a subdivision, combination or consolidation is
effected.
(q) The exercise of Rights under Section 11(a)(ii) shall
only result in the loss of rights under Section 11(a)(ii) to
the extent so exercised and shall not otherwise affect the
rights represented by the Rights under this Rights Agreement,
including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or
-----------------------------------------
Number of Shares. Whenever an adjustment is made as provided
- -----------------
in Sections 11 and 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer
agent for the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall
not be deemed to have knowledge of such adjustment unless and
until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
--------------------------------------------
Assets or Earning Power.
- ------------------------
(a) In the event that, on or following the Stock
Acquisition Date, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other
Person, (y) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the shares of
Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other
property or all holders of shares of Common Stock are not
treated alike or following the merger or consolidation the
holders of Common Stock immediately prior to the transaction
do not hold in the same proportion all of the voting power of
the corporation surviving the transaction, or (z) the Company
shall sell, mortgage or otherwise transfer (or one or more of
its subsidiaries shall sell, mortgage or otherwise transfer),
in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of
the Company and its subsidiaries (taken as a whole) to any
other Person, then, and in each such case, proper provision
shall be made so that (i) following the Distribution Date,
each holder of a Right, shall have the right to receive, upon
the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of
shares of freely tradable Common Stock of the Principal Party
(as hereinafter defined), free and clear of liens, rights of
call or first refusal, encumbrances or other adverse claims,
as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of shares of
Common Stock for which a Right is then exercisable and
dividing that product by (2) 50% of the current market price
per share of the Common Stock of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger sale or
transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11
hereof shall apply to such Principal Party; and (iv) such
Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares
of its Common Stock in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the
exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x)
or (y) of the first sentence of this Section 13, the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so
issued, the Person that is the other party to the merger
or consolidation (including, if applicable, the Company
if it is the surviving corporation); and
(ii) in the case of any transaction described in (z)
of the first sentence in this Section 13, the Person that
is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction
or transactions;
provided, however, that in any such case, (1) if the Common
Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a
direct or indirect subsidiary of another Person, "Principal
Party" shall refer to such other Person; (2) in case such
Person is a subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and
have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value; and (3) in case
such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains
of ownership having an interest in such joint venture as if
such party were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same
ratio as their direct or indirect interests in such Person
bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto
the Company and each Principal Party and each other Person who
may become a Principal Party as a result of such
consideration, merger, sale or transfer shall have a
sufficient number of shares of its authorized Common Stock
which have not been issued or reserved for issuance in order
to permit the exercise in full of the Rights in accordance
with this Section 13 and shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the
date of any consolidation, merger, sale or transfer of assets
mentioned in paragraph (a) of this Section 13, the Principal
Party at its own expense will
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, will use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and will use its best
efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of
the Rights under the blue sky laws of such jurisdictions
as may be necessary or appropriate; and
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party
and each of its Affiliates which comply in all material
respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other
transfers. The rights under this Section 13 shall be in
addition to the rights to exercise Rights and adjustments
under Section 11(a)(ii) and shall survive any exercise
thereunder.
Section 14. Additional Covenant. Notwithstanding any
-------------------
other provision of this Agreement, no adjustment to the
Purchase Price, the number of shares of Common Stock (or
fractions of a share) for which a Right is exercisable or the
number of Rights outstanding or any similar adjustment shall
be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the
Rights would have had absent such adjustment, including,
without limitation, the benefits under Section 11(a)(ii) and
Section 13, unless the terms of this Agreement are amended so
as to preserve such benefits.
Section 15. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company shall not be required to issue fractions
of Rights or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For
the purposes of this Section 15(a), the current market value
of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted
to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any
such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined
reasonably and with good faith to the holders of Rights by the
Board of Directors of the Company shall be used and shall be
binding on the Rights Agent.
(b) The Company shall not be required to issue fractions
of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of a share of Common Stock. For purposes
of this Section 15(b), the current market value of a share of
Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to Section 11(d)(ii) hereof) for
the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right.
Section 16. Rights of Action. All rights of action in
----------------
respect of this Agreement (other than rights of action given
to the Rights Agent under Section 19 hereof) are vested in the
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this
Agreement. Holders of Rights shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees,
incurred by them in any action to enforce the provisions of
this Agreement in which they successfully prosecute their
claims.
Section 17. Agreement of Rights Holders. Every holder
---------------------------
of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer;
(c) subject to Section 6 and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered
as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or a beneficial
interest in a Right or other Person as a result of its
inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction
or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company
shall not have sought or otherwise cooperated in obtaining
such order, decree or ruling and must use its best efforts to
have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 18. Rights Certificate Holder Not Deemed a
--------------------------------------
Stockholder. No holder, as such, of any Rights Certificate
- -----------
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the shares of Common Stock or any
other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised
in accordance with the provisions thereof.
Section 19. Concerning the Rights Agent. The Company
---------------------------
agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnity provided for
in this Section 19 shall survive the expiration of the Rights
and the termination of this Agreement.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 20. Merger or Consolidation or Change of Name of
--------------------------------------------
Rights Agent. Any corporation into which the Rights Agent or
- -------------
any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger
or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding
to the corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions
of Section 22 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name;
and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this
Agreement.
Section 21. Duties of Rights Agent. The Rights Agent
----------------------
undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Rights Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person) be proved or
established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, any Vice
Chairman of the Board, any President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Rights Certificates (except as to
the fact that it has countersigned the Rights Certificates) or
be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any
Rights becoming null and void pursuant to Section 7(e) hereof
or for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof or responsible for the
manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any
such adjustment); nor shall it be responsible for any
determination by the Board of Directors of the Company of
current market value of the Rights or Common Stock pursuant to
the provisions of Section 15 hereof; nor shall it by any act
hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any shares of Common
Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock will,
when so issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder and certificates delivered pursuant to any
provision hereof from the Chairman of the Board, any Vice
Chairman of the Board, any President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and is authorized to apply
to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to
the Company or to the holders of the Rights resulting from any
such act, omission, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder or in the exercise of its rights if there
shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 22. Change of Rights Agent. The Rights Agent or
----------------------
any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of
the Common Stock by registered or certified mail, and to
holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Rights Certificates
by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder
of a Rights Certificate (who shall, with such notice, submit
his Rights Certificate for inspection by the Company), then
the registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a
new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the
United States or of any state, in good standing, which is
authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least
$50,000,000. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Right
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, if such appointment occurs
after the Distribution Date, mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure
to give any notice provided for in this Section 22, however,
or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may
be.
Section 23. Issuance of New Rights Certificates.
-----------------------------------
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the
number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the
Expiration Date, the Company shall with respect to shares of
Common Stock so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, or
upon the exercise, conversion or exchange of securities, notes
or debentures issued by the Company prior to the Distribution
Date, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, that (i) the Company shall not be obligated
to issue any such Right Certificates if, and to the extent
that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such
Right Certificate shall be issued, and (ii) no Right
Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
Section 24. Redemption and Termination.
--------------------------
(a) (i) The Board of Directors of the Company may, at
its option, at any time prior to 5:00 P.M., Cincinnati
time, on the earlier of (x) the Stock Acquisition Date or
(y) the Final Expiration Date, redeem all but not less
than all of the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the
"Redemption Price"). In addition, the Board of Directors
of the Company may, at its option redeem all, but not
less than all, of the then outstanding Rights at the
Redemption Price within 10 days after any Person becomes
an Acquiring Person if (A) the Acquiring Person notifies
the Board of Directors that such Person became an
Acquiring Person inadvertently and (B) during such 10 day
period, and at the time of redemption, the Acquiring
Person is no longer the Beneficial Owner of 10% or more
of the then outstanding shares of Common Stock.
(ii) In addition, the Board of Directors of the
Company may, at its option, at any time following a Stock
Acquisition Date and the expiration of the period during
which the rights of holders of Rights pursuant to Section
11(a)(ii) hereof may be exercised as a result of the
occurrence of such Stock Acquisition Date, but prior to
any event described in clause (x), (y) or (z) of Section
13(a) hereof, redeem all but not less than all of the
then outstanding Rights at the Redemption Price in
connection with any such event in which all holders of
shares of Common Stock are treated alike and not
involving an Acquiring Person or any Affiliate or
Associate of an Acquiring Person, Affiliate or Associate
has an interest, or any other Person acting, directly or
indirectly on behalf of or in concert with any such
Acquiring Person, Associate or Affiliate (other than
involvement by an Acquiring Person, Affiliate, Associate
or such other Person solely as a holder of shares of
Common Stock being treated like all other such holders).
(b) Immediately upon the date for redemption set forth
(or determined in the manner specified in) in a resolution of
the Board of Directors of the Company ordering the redemption
of the Rights, evidence of which shall have been filed with
the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price. Within ten days after the
action of the Board of Directors ordering any such redemption
of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to the Rights Agent
and to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made.
Section 25. Notice of Certain Events. In case the
------------------------
Company shall at any time on or after the Distribution Date
propose (a) to pay any dividend payable in stock of any class
to the holders of Common Stock or to make any other
distribution to the holders of Common Stock (other than a
regular quarterly cash dividend at a rate not in excess of
125% of the rate of the last regular quarterly cash dividend
theretofore paid) or (b) to offer to the holders of Common
Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any
class or any other securities, rights or options, or (c) to
effect any reclassification of its Common Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Common Stock), or (d) to effect any consolidation or
merger into or with, or to effect any sale or other transfer
(or to permit one or more of its subsidiaries to effect any
sale or other transfer), in one or more transactions, of more
than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to, any other Person, or (e)
to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of
the shares of Common Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action
covered by clause (a) or (b) above at least 20 days prior to
the record date for determining holders of the shares of
Common Stock for purposes of such action, and in the case of
any such other action, at least 20 days prior to the date of
the taking of such proposed action or the date of
participation therein by the holders of the shares of Common
Stock whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii)
of this Agreement shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders
of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by
-------
this Agreement to be given or made by the Rights Agent or by
the holder of any Rights Certificate to or on the Company
shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
The Kroger Co.
1014 Vine Street
Cincinnati, Ohio 45202
Attention: Corporate Secretary
Subject to the provisions of Section 22, any notice or demand
authorized by this Agreement to be given or made by the
Company or by the holder of any Rights Certificate to or on
the Rights Agent shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
The Bank of New York
48 Wall Street
New York, New York 10286
Attention:
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books
of the Company.
Section 27. Supplements and Amendments. Prior to the
--------------------------
Distribution Date, the Company may from time to time
supplement or amend any provision of this Agreement in any
respect without the approval of any holders of certificates
representing Common Stock and the Rights. From and after the
Distribution Date, the Company may from time to time
supplement or amend this Agreement without the approval of any
holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect
the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, however, that this Agreement may
not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the
Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders
of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such
supplement or amendment, provided that such supplement or
amendment does not adversely affect the rights or obligations
of the Rights Agent under Section 19 or Section 21 of this
Agreement and such amendment or supplement shall be effective
regardless of whether or when executed by the Rights Agent.
Prior to the Distribution Date, the interests of the holders
of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
Section 28. Determination and Actions by the Board of
-----------------------------------------
Directors, etc. The Board of Directors of the Company shall
- --------------
have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically
granted to the Board, or the Company, or as may be necessary
or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the Rights
or to amend the Agreement and whether any proposed amendment
adversely affects the interests of the holders of Right
Certificates). For all purposes of this Agreement, any
calculation of the number of shares of Common Stock or other
securities outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding shares of Common Stock or any other securities of
which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement. All such actions,
calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right
Certificates and all other parties, and (y) not subject the
Board to any liability to the holders of the Right
Certificates or holders of shares of Common Stock.
Section 29. Successors. All the covenants and
----------
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this
--------------------------
Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date,
the Common Stock).
Section 31. Severability. If any term, provision,
------------
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,
impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right
-------------
and each Rights Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of Ohio and
for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts
to be made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be
-------------
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings
--------------------
of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day
and year first above written.
Attest: THE KROGER CO.
/s/ Bruce M. Gack By /s/ Lawrence M. Turner
- ------------------------ -----------------------
Name: Bruce M. Gack Name: Lawrence M. Turner
Title:Assistant Secretary Title:Vice President & Treasurer
Attest: THE BANK OF NEW YORK
/s/ Camille Nunnari By /s/ John I. Sivertsen
- ----------------------- ------------------------
Name: Camille Nunnari Name: John I. Sivertsen
Title:Assistant Vice President Title:Corporate Vice President
<PAGE> Exhibit A
---------
[Form of Rights Certificate]
Certificate No. R- Rights
-----------
NOT EXERCISABLE AFTER MARCH 19, 2006 OR EARLIER IF
NOTICE OF REDEMPTION IS GIVEN. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS
CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY ARE
NULL AND VOID.]*
Rights Certificate
The Kroger 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 Amended and
Restated Rights Agreement dated as of November 30, 1995 (the
"Rights Agreement") between The Kroger Co., an Ohio
corporation (the "Company"), and The Bank of New York (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. (Cincinnati time) on
March 19, 2006 at the principal office of the Rights Agent, or
its successors as Rights Agent, one fully paid, nonassessable
share of the Common Stock (the "Common Stock") of the Company,
at a purchase price of $175 per share (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate
with the appropriate Form of Election to Purchase duly
executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase Price
as of November 30, 1995, based on the Common Stock as
constituted at such date.
As provided in the Rights Agreement, the Purchase Price
and the number of shares of Common Stock, which may be
purchased upon the exercise of the Rights evidenced by this
Rights Certificate are subject to modification and adjustment
upon the happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated
herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the
holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the principal office of the Company
and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office of the
Rights Agent, may be exercised for another Rights Certificate
or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate
number of shares of Common Stock as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised (other than pursuant to Section
11(a)(ii) of the Rights Agreement) in part, the holder shall
be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole
Rights not exercised. If this Rights Certificate shall be
exercised in whole or in part in pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to
receive this Rights Certificate duly marked to indicate that
such exercise has occurred as set forth in the Rights
Agreement.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right.
No fractional shares of Common Stock will be issued upon
the exercise of any Right or Rights evidenced hereby, but in
lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Rights Certificate shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Common Stock or of any other
securities 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 Rights
Certificate shall have been exercised as provided in the
Rights Agreement.
This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
<PAGE>
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of .
-----------
ATTEST: THE KROGER CO.
By
- ------------------------ ---------------------
Name: Name:
Title: Title:
Countersigned:
[ ]
- -----------------------------
Authorized Signature
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
------------------------------------------
hereby sell, assigns and transfers unto
---------------------
(Please print name and address of transferee)
- --------------------------------------------------------------
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within Rights
------------
Certificate on the books of the within-named Company, with
full power of substitution.
Dated: , 19
--------------------- ------
--------------------------
Signature
Signature Guaranteed:
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated: , 19
------------- --- -------------------------
Signature
NOTICE
------
The signature to the foregoing Assignment must correspond
to the name as written upon the face of this Rights
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To THE KROGER CO.:
The undersigned hereby irrevocably elects to exercise
- -------- Rights represented by this Rights Certificate to
purchase
the shares of Common Stock issuable upon the exercise of the
Rights and requests that certificates for such shares be
issued in the name of:
Please insert social security
or other identifying number
- -----------------------------------------
(Please print name and address)
- --------------------------------------------------------------
- --------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name
of and delivered to:
Please insert social security
or other identifying number
- -------------------------------------------
(Please print name and address)
- --------------------------------------------------------------
- --------------------------------------------------------------
Dated: , 19
-------------------- ---- ----------------------
Signature
Signature Guaranteed:
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person.
Dated: , 19
--------------- --- --------------------------
Signature
NOTICE
-----------
The signature to the foregoing Election to Purchase must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
<PAGE>
Exhibit B
---------
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On February 28, 1986, the Board of Directors of The
Kroger Co. (the "Company") declared a dividend distribution of
one Right for each outstanding share of common stock, par
value $1 per share (the "Common Stock"), of the Company to
stockholders of record at the close of business on March 19,
1986 (the "Record Date"). On November 30, 1995, the Board of
Directors of the Company adopted certain amendments to the
terms of the Rights. Except as set forth below, each Right,
when exercisable, entitles the registered holder to purchase
from the Company one share of Common Stock at a price of $175
per share (the "Purchase Price), subject to adjustment. The
description and terms of the Rights are set forth in an
Amended and Restated Rights Agreement (the "Rights Agreement")
between the Company and The Bank of New York, as Rights Agent.
Until the earlier to occur of (i) ten days following a
public announcement that, without the prior consent of the
Board of Directors of the Company, a person or group of
affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of Common
Stock (the "Stock Acquisition Date"), or (ii) ten business
days (or such later date as the Board may determine) following
the commencement of (or a public announcement of an intention
which is not subsequently withdrawn to make) a tender offer or
exchange offer which would result in any person or group and
related persons having beneficial ownership of 10% or more of
the outstanding shares of Common Stock without the prior
consent of the Board of Directors, (the earlier of such dates
being called the "Distribution Date"), the Rights will be
attached to all Common Stock certificates and will be
evidenced, with respect to any of the Common Stock
certificates outstanding as of November 30, 1995, by such
Common Stock certificate and no separate Right Certificates
will be distributed. The Rights Agreement provides that,
until the Distribution Date, the Rights will be transferred
with and only with Common Stock certificates. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after November
30, 1995 (or as soon thereafter as is reasonably practicable)
upon transfer or new issuance of the Common Stock will contain
a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any
certificates for Common Stock outstanding as of the Record
Date will also constitute the transfer of the Rights
associated with the Common Stock represented by such
certificate, even without such a notation. As soon as
practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates")
will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date, and the
separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on March 19, 2006, unless
earlier redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person,
each holder of a Right generally will thereafter have the
right for a 60 day period (or such other period set by the
Board of Directors) to receive upon exercise of the Right that
number of shares of Common Stock having a market value
(immediately prior to the occurrence of an Acquiring Person)
of two times the exercise price of the Right (such right being
called the "Subscription Right"). Notwithstanding the
foregoing, following the occurrence of an Acquiring Person,
all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by the
Acquiring Person or any affiliate or associate thereof will be
null and void.
In the event that, at any time following the Stock
Acquisition Date, the Company is acquired in a merger or other
business combination transaction or 50% or more of the
Company's assets or earning power are sold (in one transaction
or a series of transactions), proper provision shall be made
so that each holder of a Right (other than Rights previously
voided as described above) shall thereafter have the right to
receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company (or, in the event there is more
than one acquiring company, the acquiring company receiving
the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have
a market value of two times the exercise price of the Right
(such right being called the "Merger Right"). The holder of a
Right will continue to have the Merger Right whether or not
such holder exercises the Subscription Right.
The Purchase Price payable, the number of Rights, and the
number of shares of the Common Stock or other securities or
property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of the Common Stock, (ii) upon the grant to
holders of the Common Stock of certain rights or warrants to
subscribe for Common Stock or shares having the same rights,
privileges and preferences as the Common Stock at less than
the current market price of the Common Stock or (iii) upon the
distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding regular quarterly cash
dividends and excluding dividends payable in Common Stock) or
of subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustments in the Purchase
Price will be required until cumulative adjustment require an
adjustment of at least 1% in such Purchase Price. No
fractions of shares will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of
the Common Stock on the last trading date prior to the date of
exercise.
At any time prior to the earlier to occur of (i) the
close of business on the Stock Acquisition Date or (ii) the
expiration of the Rights, the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective upon
the action of the Board of Directors. Additionally, following
the Stock Acquisition Date and the expiration of the period
during which the Subscription Right is exercisable, the
Company may redeem the then outstanding Rights in whole, but
not in part, at the Redemption Price, provided that such
redemption is in connection with a merger or other business
combination transaction or series of transactions involving
the Company in which all holders of Common Stock are treated
alike but not involving an Acquiring Person or its affiliates
or associates. Upon the effective date of the redemption of
the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive
the Redemption Price.
All of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board
in order to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring
Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Form
8-A/A amending a Registration Statement on Form 8-A. A copy
of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated
herein by reference.
