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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 2, 1994
Date of earliest event reported: August 19, 1994
THE MAY DEPARTMENT STORES COMPANY
(Exact name of Registrant as specified in its charter)
New York I-79 43-0398035
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
611 Olive Street, St. Louis, Missouri 63101
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(314) 342-6300
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Item 5. Other Events.
On August 19, 1994, the Board of Directors of The May
Department Stores Company (the "Company") approved the extension
of the Company's existing rights by adopting a shareowner rights
plan substantially similar to the company's current rights plan.
Pursuant to the new Rights Agreement between the Company and The
Bank of New York, as Rights Agent (the "1994 Rights Agreement"),
one Right will be issued for each outstanding share of common
stock, par value $.50 per share, of the Company on the earlier to
occur of the expiration of the existing rights (March 3, 1996) or
the redemption of such rights in accordance with the terms of the
Company's current rights plan. Each of the new Rights will
entitle the registered holder to purchase from the Company a unit
(a "Unit") consisting of one four-hundredth of a Junior
Participating Preference Share, par value $.50 per share, at a
price of $150 per Unit, subject to adjustment. The new Rights
are redeemable under certain circumstances at $.01 per Right and
will expire, unless earlier redeemed, on August 31, 2004.
The description and terms of the new Rights are set forth in
the 1994 Rights Agreement, a copy of which is annexed hereto as
Exhibit 1 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following documents are filed as Exhibits.
Sequential
Numbering
System
Exhibit No. Exhibit Page Number
1 Form of Rights Agreement, dated 5
as of August 19, 1994, between The
May Department Stores Company and
The Bank of New York, which includes as
Exhibit A thereto, the Form of Right
Certificate.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
THE MAY DEPARTMENT STORES COMPANY
Dated: September 2, 1994 By: /s/ Richard A. Brickson
Richard A. Brickson
Secretary and Senior Counsel
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INDEX TO EXHIBITS
Sequential
Numbering
System
Exhibit No. Exhibit Page Number
1 Form of Rights Agreement, dated 5
as of August 19, 1994, between The
May Department Stores Company and
The Bank of New York, which includes as
Exhibit A thereto, the Form of Right
Certificate.
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of August 19, 1994 (the
"Agreement"), between THE MAY DEPARTMENT STORES COMPANY, a New York
corporation (the "Company"), and THE BANK OF NEW YORK, a banking
company organized under the laws of New York (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on February 21, 1986, the Board of Directors of
the Company authorized and declared a dividend distribution of one
Right for each share of Common Stock (as hereinafter defined) of
the Company outstanding at the close of business on March 3, 1986
(the "1986 Record Date"), and authorized the issuance of one Right
(as such number was subsequently adjusted pursuant to the provi-
sions of Section 11(p) of the Rights Agreement, dated as of Febru-
ary 21, 1986 (the "1986 Agreement"), as amended and restated as of
May 2, 1988, and as amended on May 11, 1993 (the "1988 Agreement"),
between the Company and the Rights Agent) for each share of Common
Stock of the Company issued between the 1986 Record Date (whether
originally issued or delivered from the Company's treasury) and the
Distribution Date (as defined in the 1988 Agreement), each Right
initially representing the right to purchase one one-hundredth of
a Junior Participating Preference Share of the Company having the
rights, powers and preferences set forth in the Certificate of
Incorporation of the Company, as restated and filed with the
Secretary of State of the State of New York on March 22, 1994, and
as it may be amended from time to time hereafter (the "Certificate
of Incorporation"), upon the terms and subject to the conditions
set forth in the 1988 Agreement (the "1988 Rights");
WHEREAS, on April 15, 1988, the Board of Directors, in
accordance with Section 26 of the 1986 Agreement, determined it
desirable and in the best interests of the Company and its
shareowners for the Company to supplement and amend certain
provisions of the 1986 Agreement and on May 2, 1988 implemented
such amendments by executing the 1988 Agreement;
WHEREAS, effective as of May 11, 1993, the Company
executed an "Amendment to Rights Agreement" to reflect formally the
appointment of The Bank of New York as transfer agent for all of
the issued and outstanding stock of the Company and as Rights Agent
under the 1988 Rights Agreement;
WHEREAS, on August 19, 1994, the Board of Directors
determined it desirable and in the best interests of the Company
and its shareowners for the Company to extend the 1988 Agreement
and to implement such extension by executing this Agreement;
WHEREAS, on August 19, 1994 (the "Rights Dividend Decla-
ration Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each share of
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common stock of the Company outstanding upon the Expiration Date
(as defined in the 1988 Agreement) (the "Record Date"), and autho-
rized the issuance of one Right (as such number may hereafter be
adjusted pursuant to the provisions of Section 11(p) hereof) for
each share of Common Stock of the Company issued between the Record
Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date, each Right initially
representing the right to purchase one four-hundredth of a Junior
Participating Preference Share of the Company having the rights,
powers and preferences set forth in the Certificate of Incorpora-
tion, upon the terms and subject to the conditions hereinafter set
forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and Associates (as
such term is hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 20% or
more of the shares of Common Stock then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or
any Person or entity organized, appointed or established by or for
the Company for, or pursuant to the terms of, any such plan.
(b) "Adverse Person" shall mean any Person declared
to be an Adverse Person by the Board of Directors upon
determination that the criteria set forth in Section 11(a)(ii)(C)
apply to such Person.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement (the
"Exchange Act").
(d) 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, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in
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writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner"
of, or be deemed to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to subparagraph
(ii) of this paragraph (d)) or disposing of any voting
securities of the Company; provided, however, that nothing in
this paragraph (d) shall cause a Person engaged in business as
an underwriter of securities to be deemed the "Beneficial
Owner" of, or to be deemed to "beneficially own," any securi-
ties acquired through such Person's participation in good
faith in a firm commitment underwriting until the expiration
of forty days after the date of such acquisition.
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(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(f) "Close of business" on any given date shall
mean 5:00 P.M., New York time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
New York time, on the next succeeding Business Day.
(g) "Common Stock" shall mean the common stock, par
value $.50 per share, of the Company, except that "Common Stock"
when used with reference to any Person other than the Company shall
mean the capital stock of such Person with the greatest voting
power, or the equity securities or other equity interest having
power to control or direct the management, of such Person.
(h) "Person" shall mean any individual, firm,
corporation, partnership or other entity whether organized under
the laws of the United States of America or any state or territory
thereof or under the laws of any other country or political
subdivision thereof.
(i) "Preferred Stock" shall mean the Junior
Participating Preference Shares, par value $.50 per share, of the
Company.
(j) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii)(A), (B) or (C) hereof.
(k) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(l) "Stock Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) under the Exchange Act) by the Company or
an Acquiring Person that an Acquiring Person has become such.
(m) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(n) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company has
appointed the Rights Agent to act as agent for the Company and the
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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 has accepted such appointment. The Company
may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business
on the tenth Business Day after the Stock Acquisition Date, (ii)
the close of business on the tenth Business Day after the date that
a tender or exchange offer by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by or for the Company
for, or pursuant to the terms of, any such plan) is first published
or sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 30% or more
of the shares of Common Stock then outstanding or (iii) the close
of business on the tenth Business Day after the Board of Directors
determines, pursuant to the criteria set forth in Section
11(a)(ii)(C) hereof, that a Person is an Adverse Person (the
earliest of (i), (ii) and (iii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (except as
provided below) by the certificates for the Common Stock registered
in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will
be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, postage prepaid mail, to
each record holder of the Common Stock as of the close of business
on the Distribution Date, at the address of such holder shown on
the records of the Company, one or more right certificates, in
substantially the form of Exhibit A hereto (the "Right
Certificates"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided herein. At the time of
distribution of the Right Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Right Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of
any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) Rights shall be issued in respect of all shares
of Common Stock which are issued after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date.
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Certificates issued after the Record Date representing such shares
of Common Stock shall also be deemed to be certificates for Rights.
Certificates issued after the Record Date representing shares of
Common Stock shall bear the following legend:
This certificate evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between The May Department Stores Company (the
"Company") and the Rights Agent (the "Rights Agreement"),
the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to
the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request there-
for. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or an Adverse
Person or any Affiliate or Associate of either (as such
terms are defined in the Rights Agreement), whether cur-
rently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend,
and certificates containing the legends specified in the 1986
Agreement and the 1988 Agreement and with respect to previously
issued certificates that contain no comparable legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and the
registered holders of Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of
election to purchase 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
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listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Right Certificates, whenever
distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one
four-hundredths of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (such exercise price per one
four-hundredth of a share being referred to herein as the "Purchase
Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be sub-
ject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to
Section 3(a), Section 11(i) or Section 22 hereof that represents
Rights beneficially owned by: (i) an Acquiring Person, an Adverse
Person or any Associate or Affiliate of an Acquiring Person or an
Adverse Person, (ii) a transferee of an Acquiring Person or an
Adverse Person (or of any such Associate or Affiliate) who becomes
a transferee after the Acquiring Person or an Adverse Person
becomes such, or (iii) a transferee of an Acquiring Person or an
Adverse Person (or of any such Associate or Affiliate) who becomes
a transferee prior to or concurrently with the Acquiring Person or
the Adverse Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from
the Acquiring Person or the Adverse Person to holders of equity
interests in such Acquiring Person or Adverse Person or to any
Person with whom such Acquiring Person or Adverse Person has any
agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Compa-
ny has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 7(e)
hereof, and any Right Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this
sentence, shall contain (to the extent feasible) the following
legend:
The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Adverse Person or an Affiliate or
Associate of an Acquiring Person or an Adverse Person (as
such terms are defined in the Rights Agreement). Accord-
ingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances
specified in Section 7(e) of such Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature,
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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 Right 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 Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued
and delivered by the Company with the same force and effect as
though the person who signed such Right Certificates had not ceased
to be such officer of the Company; and any Right Certificates may
be signed on behalf of the Company by any person who, at the actual
date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at
the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at one of its offices in New
York, New York, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certif-
icates, the certificate number of each of the Right Certificates
and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. (a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of
business on the Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Certificates, entitling the
registered holder to purchase a like number of one four-hundredths
of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case
may be) as the Right Certificate or Certificates surrendered then
entitled such holder (or former holder in the case of a transfer)
to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Certificates shall
make such request in writing delivered to the Rights Agent, and
shall surrender the Right Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal
office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall
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have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. There-
upon the Rights Agent shall, subject to Section 4(b), Section 7(e)
and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Certificates, as the case
may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the
Right Certificate if mutilated, the Company will execute and
deliver a new Right Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) Subject to Section 7(e) hereof,
the registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability
set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election
to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices of
the Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price with respect to the total number of
one four-hundredths of a share of Preferred Stock (or other securi-
ties or property, as the case may be) as to which such surrendered
Rights are then exercisable, at or prior to the earlier of (i) the
close of business on August 31, 2004 (the "Final Expiration Date"),
or (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the earlier of (i) and (ii) being herein
referred to as the "Expiration Date").
(b) The Purchase Price for each one four-hundredth
of a share of Preferred Stock pursuant to the exercise of a Right
shall be initially $150, and shall be subject to adjustment from
time to time as provided in Section 11 hereof and shall be payable
in accordance with paragraph (c) below.
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(c) Upon receipt of a Right Certificate repre-
senting exercisable Rights, with the form of election to purchase
and the certificate duly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price per one
four-hundredth of a share of Preferred Stock (or other shares,
securities or property, as the case may be) to be purchased as set
forth below and an amount equal to any applicable transfer tax, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly: (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for the total
number of one four-hundredths of a share of Preferred Stock to be
purchased and the Company hereby irrevocably authorizes its trans-
fer agent to comply with all such requests, or (B) if the Company
shall have elected to deposit the total number of shares of
Preferred Stock issuable upon exercise of the Rights hereunder with
a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one four-hundredths
of a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent
to comply with such request, (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered
to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated
by such holder, and (iv) after receipt thereof, deliver such cash,
if any, to or upon the order of the registered holder of such Right
Certificate. The payment of the Purchase Price (as such amount may
be reduced pursuant to Section 11(a)(iii) hereof) shall be made in
cash or by certified bank check or money order payable to the order
of the Company. In the event that the Company is obligated to
issue other securities (including Common Stock) of the Company, pay
cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder
of such Right Certificate, registered in such name or names as may
be designated by such holder, subject to the provisions of Section
14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Section
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11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
Person, an Adverse Person or an Associate or Affiliate of an
Acquiring Person or an Adverse Person, (ii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person or
the Adverse Person becomes such, or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person or the Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or
not for consideration) from the Acquiring Person or the Adverse
Person to holders of equity interests in such Acquiring Person or
Adverse Person or to any Person with whom the Acquiring Person or
the Adverse Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become
null and void without any further action, and no holder of such
Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise.
The Company shall use all reasonable efforts to ensure 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 an Adverse
Person or any of their respective 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 such registered holder shall have (i)
completed and duly executed the certificate and the form of elec-
tion to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation and
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retirement, and the Rights Agent shall so cancel and retire, any
other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company or may, but
shall not be required to, destroy such cancelled Right Certifi-
cates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital
Stock. (a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or
other securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after the
first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the
Securities Act of 1933 (the "Securities Act"), with respect to the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration
of the Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend,
for a period of time not to exceed ninety (90) days after the date
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<PAGE>
set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exer-
cisable in any jurisdiction unless the requisite qualification in
such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all one
four-hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) 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.
(e) The Company further covenants and agrees that
it will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates and of any
certificates for shares of Preferred Stock (or Common Stock and/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
Right Certificates to a Person other than, or the issuance or
delivery of a number of one four-hundredths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be)
in respect of a name other than that of, the registered holder of
the Right Certificates evidencing Rights surrendered for exercise
or to issue or deliver any certificates for a number of one four-
hundredths of a share of Preferred Stock (or Common Stock and/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 Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one four-hundredths of
a share of Preferred Stock (or Common Stock and/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 whole or fractional shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be) repre-
sented thereby on, and such certificate shall be dated, the date
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<PAGE>
upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred Stock
(or Common Stock and/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 whole or fractional
shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/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 Right Certificate, as such, shall not be entitled
to any rights of a shareowner 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
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares,
or (D) issue any shares of its capital stock in a reclassi-
fication of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and 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
Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then
in effect, the aggregate number and kind of shares of Pre-
ferred Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books of the
Company were open, the holder of such Right would have owned
upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification.
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<PAGE>
If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to, Section 11(a)(ii) hereof.
(ii) In the event:
(A) (1) any Acquiring Person or any Associate
or Affiliate of any Acquiring Person, at any time after the
date of this Agreement, directly or indirectly, shall merge
into the Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of
such merger or combination and the Common Stock of the Company
shall remain outstanding and unchanged, or (2) any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or
established by or for the Company for, or pursuant to the
terms of, any such plan), alone or together with its
Affiliates and Associates, shall become the Beneficial Owner
of 30% or more of the shares of Common Stock then outstanding,
unless the event causing the 30% threshold to be crossed is a
transaction set forth in Section 13(a) hereof or is an
acquisition of shares of Common Stock pursuant to a tender
offer or an exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by the Board
of Directors of the Company, after receiving advice from one
or more investment banking firms, to be (a) at a price which
is fair to the Company's shareowners (taking into account all
factors which the Board of Directors deems relevant including,
without limitation, prices which could reasonably be achieved
if the Company or its assets were sold on an orderly basis
designed to realize maximum value) and (b) otherwise in the
best interests of the Company and its shareowners, or
(B) during such time as there is an Acquiring
Person, there shall be any reclassification of securities (in-
cluding any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with
any of its Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries,
other than a transaction or transactions to which the
provisions of Section 13(a) apply (whether or not with or into
or otherwise involving an Acquiring Person) which has the
effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class
of equity securities of the Company or any of its Subsidiaries
which is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any
Acquiring Person, or
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<PAGE>
(C) the Board of Directors shall declare any
Person to be an Adverse Person, upon a determination that such
Person, alone or together with its Affiliates and Associates,
has, at any time after the Record Date, become the Beneficial
Owner of an amount of Common Stock which the Board of Direc-
tors determines to be substantial (which amount shall in no
event be less than 15% of the shares of Common Stock then out-
standing) and a determination by the Board of Directors of the
Company, after reasonable inquiry and investigation, including
consultation with such persons as such directors shall deem
appropriate, that (a) such Beneficial Ownership by such Person
is intended to cause the Company to repurchase the Common
Stock beneficially owned by such Person or to cause pressure
on the Company to take action or enter into a transaction or
series of transactions intended to provide such Person with
short-term financial gain under circumstances where the Board
of Directors determines that the best long-term interests of
the Company and its shareowners would not be served by taking
such action or entering into such transaction or series of
transactions at that time or (b) such Beneficial Ownership is
causing or reasonably likely to cause a material adverse
impact (including, but not limited to, impairment of rela-
tionships with customers or impairment of the Company's
ability to maintain its competitive position) on the business
or prospects of the Company to the detriment of the Company's
shareowners,
then, promptly following the occurrence of a Section 11(a)(ii)
Event, proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, in lieu of shares of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
then number of one four-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter
be referred to as the "Purchase Price" for each Right for all
purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share of Common
Stock on the date of such first occurrence (such number of shares
being referred to herein as the "Adjustment Shares").
(iii) In the event that the number of shares
of Common Stock which are authorized by the Certificate of
Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
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<PAGE>
accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess being referred to herein as the
"Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon pay-
ment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock
which the Board of Directors of the Company has deemed to have
the same value as shares of Common Stock (such shares of
preferred stock being referred to herein as "common stock
equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing having an
aggregate value equal to the Current Value, where such aggre-
gate value has been determined by the Board of Directors of
the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of
the Company; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause
(B) above within thirty (30) days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the
date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred
to herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which in the
aggregate are equal to the Spread. If the Board of Directors
of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights,
the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days
following the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareowner approval for the authorization
of such additional shares (such period, as it may be extended
being referred to herein as the "Substitution Period"). To
the extent that the Company determines that some action need
be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights, and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value
17
<PAGE>
thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Sec-
tion 11(a)(iii), the value of the Common Stock shall be the
current market price (as determined pursuant to Section 11(d)
hereof) per share of the Common Stock on the Section 11(a)(ii)
Trigger Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Stock on
such date.
(iv) If the rules of the national securities
exchange, registered as such pursuant to Section 6 of the
Exchange Act, or of the national securities association,
registered as such pursuant to Section 15A of the Exchange
Act, on which the Common Stock is principally traded would
prohibit such exchange or association from listing or contin-
uing to list, or from authorizing for or continuing quotation
and/or transaction reporting through an inter-dealer quotation
system, the Common Stock or other equity securities of the
Company if the Rights were to be exercised for shares of
Common Stock in accordance with subparagraph (ii) of this
Section 11(a) because such issuance would nullify, restrict or
disparately reduce the per share voting rights of holders of
Common Stock, the Company shall: (A) determine the Spread, and
(B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) equity securities of
the Company, including, without limitation, "common stock
equivalents," other than securities which would have the
effect of nullifying, restricting or disparately reducing the
per share voting rights of holders of Common Stock, (3) debt
securities of the Company, (4) other assets, or (5) any
combination of the foregoing, having an aggregate value equal
to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm
selected by the Board of Directors; provided, however, if the
Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days
following the Section 11(a)(ii) Trigger Date, then the Company
shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase
Price, cash having an aggregate value equal to the Spread. To
the extent that the Company determines that some action need
be taken pursuant to the first sentence of this Section -
11(a)(iv), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of
18
<PAGE>
the Rights, but not longer than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iv), the value of the Common
Stock shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the value of
any "common stock equivalent" shall be deemed to have the same
value as the Common Stock on such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into Pre-
ferred Stock or equivalent preferred stock at a price per share of
Preferred Stock or per share of equivalent preferred stock (or
having a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the
current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, the Pur-
chase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on
such record date, plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number
of additional shares of Preferred Stock and/or equivalent preferred
stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes and binding
on the Rights Agent and the holders of the Rights. Shares of
Preferred Stock owned by or held for the account of the Company
19
<PAGE>
shall not be deemed outstanding for the purpose of any such compu-
tation. 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) In case the Company shall fix a record date for
a distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or merger
in which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including
any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a frac-
tion, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with
the Rights Agent) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred
Stock. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution is
not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date
had not been fixed.
(d) (i) For the purpose of any computation hereun-
der, other than computations made pursuant to Section
11(a)(iii) or (iv) hereof, the "current market price" per
share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common
Stock for the thirty (30) consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date,
and for purposes of computations made pursuant to Section
11(a)(iii) or (iv) hereof, the "current market price" per
share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common
Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that
the current market price per share of the Common Stock is
determined during a period following the announcement by the
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<PAGE>
issuer of such Common Stock of (A) a dividend or distribution
on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, after the ex-
dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification,
then, and in each such case, the "current market price" shall
be properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if
the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other system then in use, or, if on
any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Common Stock selected by the Board of Directors
of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on
such date as determined in good faith by the Board of Direc-
tors of the Company shall be used. The term "Trading Day"
shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business
or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, a Business
Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean
the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the "current market price" per share of Preferred
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<PAGE>
Stock shall be determined in the same manner as set forth
above for the Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not
publicly held or listed or traded in a manner described in
clause (i) of this Section 11(d), the "current market price"
per share of Preferred Stock shall be conclusively deemed to
be an amount equal to 400 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the current
market price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so
listed or traded, "current market price" per share of the
Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current
market price" of one four-hundredth of a share of Preferred
Stock shall be equal to the "current market price" of one
share of Preferred Stock divided by 400.
(e) Anything herein to the contrary notwithstand-
ing, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least
one percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth
of a share of Common Stock or other share or one-millionth of a
share of Preferred Stock, 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 (3) years from the date of the transaction which mandates
such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k)
and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Preferred Stock shall apply on like terms to
any such other shares.
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<PAGE>
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one four-hundredths of a share of Preferred
Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections
11(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one four-
hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one
four-hundredths of a share covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of one four-
hundredths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the
number of one four-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the
nearest one-ten-thousandth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price by
the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if
the Right Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior
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to the date of adjustment, and upon surrender thereof, if required
by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, 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 Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one four-hundredths of a share of
Preferred Stock issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per one four-hundredth of a share and
the number of one four-hundredths of a share which were expressed
in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value,
if any, of the number of one four-hundredths of a share of
Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue, fully paid and nonassessable, such number of one
four-hundredths of a share of Preferred Stock 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 issuance to the holder
of any Right exercised after such record date the number of one
four-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one four-hundredths of a
share of Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in
their good faith judgment the Board of Directors of the Company
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<PAGE>
shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the current
market price, (iii) issuance wholly for cash of shares of Preferred
Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such shareowners.
(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 complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof),
or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or a series of transactions, assets,
cash flow or earning power aggregating more than 50% of the assets,
cash flow 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 complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the shareow-
ners of the Person who constitutes 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.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by Section
23 or Section 26 hereof, take (or permit any Subsidiary to take)
any action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding shares
of Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or
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<PAGE>
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.
(q) The failure by the Board of Directors to
declare a Person to be an Adverse Person following such Person
becoming the Beneficial Owner of 15% or more of the outstanding
Common Stock shall not imply that such Person is not an Adverse
Person or limit the Board of Directors' right at any time in the
future to declare such Person to be an Adverse Person.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate,
and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to the Distribution Date, to each holder
of a certificate representing shares of Common Stock) in accordance
with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets, Cash Flow or Earning Power.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation
or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of
any other Person or cash or any other property, or (z) the Company
(or one or more of its Subsidiaries) shall sell, mortgage (except
26
<PAGE>
in bona fide financing transactions in the ordinary course of
business) or otherwise transfer in one transaction or a series of
transactions, assets, cash flow or earning power aggregating more
than 50% of the assets, cash flow or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o)
hereof), then, and in each such case (except as may be contemplated
by Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly authorized
and issued, fully paid, non-assessable and freely tradeable shares
of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the
number of one four-hundredths of a share of Preferred Stock for
which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one four-hundredths of a share for
which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and (2)
dividing that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the "Purchase Price" for
each Right for all purposes of this Agreement) by 50% of the
current market price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on
the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume,
by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of
a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of
the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section
13 Event.
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<PAGE>
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of Section 13(a),
the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of the
assets, cash flow 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 twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such
other Person; and (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.
(c) The Company shall not consummate any such
consolidation, merger, sale, mortgage or transfer unless the
Principal Party shall have a sufficient number of authorized shares
of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation,
merger, sale, mortgage or transfer of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement
under the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date; and
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<PAGE>
(ii) deliver to holders of the Rights his-
torical financial statements for the Principal Party and each
of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or mortgages or other
transfers. In the event that a Section 13 Event shall occur at any
time after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to
the contrary, Section 13 shall not be applicable to a transaction
described in clause (x) or (y) of the first sentence of Section
13(a) if (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a tender
offer or exchange offer for all outstanding shares of Common Stock
which complies with the provisions of Section 11(a)(ii)(A) hereof
(or a wholly owned subsidiary of any such Person or Persons), (ii)
the price per share of Common Stock offered in such transaction is
not less than the price per share of Common Stock paid to all
holders of shares of Common Stock whose shares were purchased
pursuant to such tender offer or exchange offer and (iii) the form
of consideration being offered to the remaining holders of shares
of Common Stock pursuant to such transaction is the same as the
form of consideration paid pursuant to such tender offer or
exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Right
Certificates which evidence fractional Rights. If the Company
decides not to issue fractional Rights, there shall be paid in lieu
thereof to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable.
The closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
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<PAGE>
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 in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which
are integral multiples of one four-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one four-
hundredth of a share of Preferred Stock). If the Company decides
not to issue fractional shares of Preferred Stock that are not
integral multiples of one four-hundredth of a share of Preferred
Stock, there shall be paid in lieu thereof to the registered
holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of
the current market value of one four-hundredth of a share of Pre-
ferred Stock. For purposes of this Section 14(b), the current
market value of one four-hundredth of a share of Preferred Stock
shall be one four-hundredth of the closing price of a share of Pre-
ferred Stock (as determined pursuant to Section 11(d)(ii) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
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. If
the Company decides not to issue fractional shares of Common Stock,
there shall be paid in lieu thereof to the registered holders of
Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For
purposes of this Section 14(c), the current market value of one (1)
share of Common Stock shall be the closing price of one (1) share
of Common Stock (as determined pursuant to Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise.
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<PAGE>
(d) 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, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any
registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common Stock), may, in such
holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such
holder's right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and 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.
Section 16. Agreement of Rights Holders. Every holder
of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a Right
that:
(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 Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the
person in whose name a Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
31
<PAGE>
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e) hereof,
shall be required to be affected by any notice 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 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 be required to use
its best efforts to have any such order, decree or ruling lifted,
overturned or otherwise removed as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Shareowner. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose
the holder of the number of one four-hundredths of a share of
Preferred 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 Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareowner of the
Company or any right to vote for the election of directors or upon
any matter submitted to shareowners at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareowners (except
as provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and 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
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<PAGE>
any claim of liability in connection therewith. The provisions of
this Section 18(a) shall survive the termination of this Agreement.
(b) 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 Right Certificate or certificate for
Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided,
however, that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 21 hereof.
In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor or in the
name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and
in all such cases such Right Certificate shall have the full force
provided in the Right Certificates and in this Agreement.
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<PAGE>
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(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 or Adverse Person and the
determination of "current market price") be proved or established
by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of
the Board, the 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 Right Certificates or be required to
verify the same (except as to its countersignature on such Right
Certificates), 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
Right Certificate (except its countersignature thereof); nor shall
it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible for
the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced
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<PAGE>
by Right Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Right Certificate or as to
whether any shares of Common Stock or Preferred 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 from the Chairman of the Board, the President,
any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered
to be taken by it in good faith in accordance with instructions of
any such officer.
(h) The Rights Agent and any shareowner, 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, default, neglect or misconduct of any such attorneys or agents
or for any loss to the Company resulting from any such act,
default, neglect or misconduct; provided, however, reasonable care
was exercised in the selection and continued employment thereof.
(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
35
<PAGE>
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 Right 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 or transfer without first consulting with the
Company.
(l) Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance
with a proposal included in such application on or after the date
specified in such application (which date shall not be less than
five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall
have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application specifying the action
to be taken.
(m) In addition to the foregoing, the Rights Agent
shall be protected and shall incur no liability for, or in respect
of, any action taken or omitted by it in connection with its
administration of this Agreement if such acts or omissions are in
reliance upon (i) the proper execution of the certifications
concerning beneficial ownership appended to the form of assignment
and the form of election to purchase attached hereto unless the
Rights Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution of such
certification including, without limitation, any refusal to honor
any otherwise permissible assignment or election by reason of such
non-execution.
(n) The Company agrees to give the Rights Agent
prompt written notice of any event or ownership which would
prohibit the exercise or transfer of the Right Certificates.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon five (5) days' notice in writing
36
<PAGE>
mailed to the Company, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent
upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock, by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the Rights Agent
or any registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized
and doing business under the laws of the United States or of the
State of Missouri (or of any other state of the United States so
long as such corporation is authorized to do business in the State
of Missouri or the State of New York), in good standing, having a
principal office in the State of Missouri or the State of New York,
which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination
by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $100,000,000, or (b) an affiliate controlled by a corporation
described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Stock and the Preferred Stock,
and mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
37
<PAGE>
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and prior to
the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant
to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or
sale; provided, however, that (i) no such Right Certificate shall
be issued if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to
whom such Right Certificate would be issued, and (ii) no such 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 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at
its option, at any time prior to 5:00 p.m., New York time, on or
before the earlier of (i) the tenth Business Day following the
Stock Acquisition Date, as such period may be extended pursuant to
Section 26 hereof, or (ii) the Final Expiration Date, redeem all
but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately ad-
justed to reflect any stock split, stock dividend or similar trans-
action occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price").
Notwithstanding the foregoing, the Board of Directors may not
redeem any Rights following a determination pursuant to Section
11(a)(ii)(C) that any Person is an Adverse Person. If, following
the occurrence of a Stock Acquisition Date and following the
expiration of the right of redemption hereunder but prior to any
Triggering Event, (i) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of
Common Stock in one transaction, or series of transactions, not
directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of a
Triggering Event such that such Person is thereafter a Beneficial
Owner of 10% or less of the outstanding shares of Common Stock, and
(ii) there are no other Persons, immediately following the occur
38
<PAGE>
rence of the event described in clause (i), who are Acquiring
Persons, then the right of redemption shall be reinstated and
thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the "current market price", as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate
by the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent for the Common
Stock. 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 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of transactions, of more than 50% of
39
<PAGE>
the assets, cash flow 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 complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give
to each holder of a Right Certificate, to the extent feasible and
in accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares
of Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock whichever shall be
the earlier.
(b) In case any Section 11(a)(ii) Event shall
occur, then (i) the Company shall as soon as practicable thereafter
give to each holder of a Right Certificate, to the extent feasible
and in accordance with Section 25 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, and (ii) all references in the preceding para-
graph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Right 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 May Department Stores Company
611 Olive Street
St. Louis, Missouri 63101
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or
by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail,
40
<PAGE>
postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Susan McFarland
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 26, the Company
and the Rights Agent shall, if the Company so directs, 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 (including,
without limitation, the period within which the Rights may be
redeemed in accordance with Section 23 hereof) 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 Right Certificates (other
than an Acquiring Person, an Adverse Person or an Affiliate or
Associate of an Acquiring Person or an Adverse Person), provided,
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 26, the
Rights Agent shall execute such supplement or amendment. Notwith-
standing anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption
Price, the Final Expiration Date, the Purchase Price or the number
of one four-hundredths of a share of Preferred Stock for which a
41
<PAGE>
Right is exercisable; provided, however, that at any time prior to
(i) the existence of an Acquiring Person, (ii) the date that a
tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company, or any Person or entity orga-
nized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, or (iii) the Board of Directors
determines that a Person is an Adverse Person, if upon consummation
thereof, such Person would be the Beneficial Owner of 30% or more
of the shares of Common Stock then outstanding, the Board of
Directors of the Company may amend this Agreement to increase the
Purchase Price or extend the Final Expiration Date. Prior to the
Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common
Stock.
Section 27. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board of
Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board, or to the Company, or
as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration
of this Agreement (including a determination to redeem or not
redeem the Rights, to declare that a Person is an Adverse Person or
to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject
the Board to any liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
42
<PAGE>
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 31. Governing Law. This Agreement, each Right
and each Right Certificate issued hereunder shall be deemed to be
a contract made under the laws of the State of New York and for all
purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts made and to be performed
entirely within such State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the
same instrument.
Section 33. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
43
<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 August 19, 1994.
Attest: THE MAY DEPARTMENT STORES
COMPANY
By Richard A. Brickson By Louis J. Garr, Jr.
Name: Richard A. Brickson Name: Louis J. Garr, Jr.
Title: Secretary Title: Executive Vice
President
Attest: THE BANK OF NEW YORK
By Thomas A. DeAngelo By John I. Sivertsen
Name: Thomas A. DeAngelo Name: John I. Sivertsen
Title: Assistant Vice Title: Vice President
President
44
<PAGE>
Exhibit A
[Form of Right Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER AUGUST 31, 2004 OR EARLIER IF
REDEEMED BY THE COMPANY. 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.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN ADVERSE PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORD-
INGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]
Right Certificate
THE MAY DEPARTMENT STORES COMPANY
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as
of August 19, 1994 (the "Rights Agreement"), between The May De-
partment Stores Company, a New York corporation (the "Company"),
and The Bank of New York, a banking company organized under the
laws of the State of New York (the "Rights Agent"), to purchase
from the Company at any time prior to 5:00 p.m. (New York time) on
August 31, 2004 at the office or offices of the Rights Agent desig-
nated for such purpose, or its successors as Rights Agent, one
four-hundredth of a fully paid, non-assessable Junior Participating
Preference Share (the "Preferred Stock") of the Company, at a pur-
chase price of $150 per one four-hundredth of a share (the
"Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this
<PAGE>
Right 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
_________ __, 199_, based on the Preferred Stock as constituted at
such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Right Agreement), if the Rights evidenced by
this Right Certificate are beneficially owned by (i) an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such
Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Adverse Person, Associate
or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, an Adverse Person, or an -
Affiliate or Associate of an Acquiring Person or an Adverse Person,
such Rights shall become null and void and no holder hereof shall
have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the principal offices of the
Company and are available upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office or offices of
the Rights Agent designated for such purpose, may be exchanged for
another Right Certificate or Right Certificates of like tenor and
date evidencing Right entitling the holder to purchase a like
aggregate number of one four-hundredths of a share of Preferred
Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
<PAGE>
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 at any time
prior to the earlier of the close of business on (i) the tenth
Business Day following the Stock Acquisition Date (as such term is
defined in the Rights Agreement), as such time period may be
extended pursuant to the Rights Agreement, and (ii) the Final
Expiration Date. After the expiration of the redemption period,
the Company's right of redemption may be reinstated if an Acquiring
Person reduces its beneficial ownership to 10% or less of the
outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one four-hundredth
of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof
a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of shares of Preferred Stock or of any other securities of the
Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a shareowner of the Company or any right to vote for the
election of directors or upon any matter submitted to shareowners
at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareowners (except as provided in the Rights Agreement),
or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or 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 _____________ ___, 19___
ATTEST: THE MAY DEPARTMENT STORES COMPANY
__________________________ By:___________________________
Secretary Name:_________________________
Title:________________________
Countersigned:
THE BANK OF NEW YORK
By______________________
Authorized Signature
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
__________________ Attorney, to transfer the within Right
Certificate on the books of the within named Company, with full
power of substitution.
Dated: __________________, 19__
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appro-
priate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person, an Adverse Person or an Affiliate or Associate
of any such 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 Right Certificate from any Person who is, was or subsequently
became an Acquiring Person, an Adverse Person or an Affiliate or
Associate of any such Person.
Dated: ___________, 19__
Signature
Signature Guaranteed:
<PAGE>
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement
or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Right Certificate.)
To: THE MAY DEPARTMENT STORES COMPANY:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Right Certificate to purchase
the shares of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other
person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for
the balance of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _______________, 19__
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appro-
priate boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person, an Adverse Person or an Affiliate
or Associate of any such Person (as such terms are defined
pursuant to the Rights Agreement);
<PAGE>
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or became
an Acquiring Person, an Adverse Person or an Affiliate or
Associate of any such Person.
Dated: ___________, 19__
Signature
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
<PAGE>
THE MAY DEPARTMENT STORES COMPANY
and
THE BANK OF NEW YORK
Rights Agent
_______________
Rights Agreement
Dated as of August 19, 1994
<PAGE>
Table of Contents
Section Page
1. Certain Definitions . . . . . . . . . . . . . . . . . . . 2
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(l) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(m) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
(n) . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. Appointment of Rights Agent . . . . . . . . . . . . . . . 4
3. Issue of Right Certificates . . . . . . . . . . . . . . . 5
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Form of Right Certificates. . . . . . . . . . . . . . . . 6
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. Countersignature and Registration . . . . . . . . . . . . 7
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. . . . . . . . . . . . . . . . . . . . . . . 8
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . 9
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
i
<PAGE>
8. Cancellation and Destruction of Right Certificates. . . . 11
9. Reservation and Availability of Capital Stock . . . . . . 12
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10. Preferred Stock Record Date . . . . . . . . . . . . . . . 13
11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights . . . . . . . . . . . . . . 14
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(l) . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(m) . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
(n) . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(o) . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(p) . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(q) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
12. Certificate of Adjusted Purchase Price or
Number of Shares. . . . . . . . . . . . . . . . . . . . . 26
13. Consolidation, Merger or Sale or Transfer of Assets, Cash
Flow or Earning Power . . . . . . . . . . . . . . . . . . 26
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
14. Fractional Rights and Fractional Shares . . . . . . . . . 29
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
15. Rights of Action. . . . . . . . . . . . . . . . . . . . . 31
ii
<PAGE>
16. Agreement of Rights Holders . . . . . . . . . . . . . . . 31
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
17. Right Certificate Holder Not Deemed a Shareowner. . . . . 32
18. Concerning the Rights Agent . . . . . . . . . . . . . . . 32
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
19. Merger or Consolidation or Change of Name of Rights Agent 33
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . 34
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(l) . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(m) . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
(n) . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
21. Change of Rights Agent. . . . . . . . . . . . . . . . . . 36
22. Issuance of New Right Certificates. . . . . . . . . . . . 37
23. Redemption and Termination. . . . . . . . . . . . . . . . 38
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
24. Notice of Certain Events. . . . . . . . . . . . . . . . . 39
(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 40
26. Supplements and Amendments. . . . . . . . . . . . . . . . 41
27. Successors. . . . . . . . . . . . . . . . . . . . . . . . 42
iii
<PAGE>
28. Determinations and Actions by the Board
of Directors, etc . . . . . . . . . . . . . . . . . . . . 42
29. Benefits of this Agreement. . . . . . . . . . . . . . . . 42
30. Severability. . . . . . . . . . . . . . . . . . . . . . . 43
31. Governing Law . . . . . . . . . . . . . . . . . . . . . . 43
32. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 43
33. Descriptive Headings. . . . . . . . . . . . . . . . . . . 43
Exhibit A -- Form of Right Certificate
iv
