SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
THE MEAD CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 31-0535759
(State of Incorporation or Organization) (IRS Employer
Identification No.)
Mead World Headquarters,
Courthouse Plaza Northeast
Dayton, Ohio 45463
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which each class is
to be so registered to be registered
------------------- ----------------------
Common Share Purchase New York Stock Exchange
Rights Pacific Stock Exchange
Chicago Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Item 1. Description of Securities To Be Registered.
On November 9, 1996, the Board of Directors of The
Mead Corporation, an Ohio corporation (the "Company"),
authorized and granted to each holder of a Common Share,
without par value, of the Company (the "Common Shares")
outstanding at the close of business on November 14, 1996
(the "Record Date") one Right for each Common Share held as
of the Record Date. Each Right entitles the registered
holder to purchase from the Company one Common Share at a
price of $200 (the "Purchase Price"), subject to adjustment
in certain circumstances. The Purchase Price may be paid,
at the election of the registered holder, in cash, Common
Shares or a combination thereof.
The description and terms of the Rights are set
forth in a Rights Agreement, dated as of November 9, 1996
(the "Rights Agreement"), between the Company and The First
National Bank of Boston, as Rights Agent.
Initially, the Rights will be attached to the
certificates representing outstanding Common Shares, and no
separate certificates evidencing the Rights (the "Rights
Certificates") will be distributed. Until the earlier to
occur of (i) ten days following a public announcement that a
person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the
outstanding Common Shares (the "Share Acquisition Date"),
(ii) ten Business Days following the commencement of (or
public announcement of the intent to commence) a tender
offer or exchange offer by any person or group if upon
consummation thereof, such person or group would be the
beneficial owner of 20% or more of the outstanding Common
Shares or (iii) ten days following a determination by the
Board of Directors of the Company that any Person is an
Adverse Person (the earliest of such dates being called the
"Distribution Date"), the Rights will be evidenced by the
Common Share certificates. The Board of Directors of the
Company will declare any Person to be an Adverse Person upon
their determination that such Person has become the
Beneficial Owner of a substantial amount (i.e., not less
than 10%) of the Common Shares then outstanding and upon the
determination by a majority of the independent Directors
that: (i) such Beneficial Ownership is intended to cause the
Company to repurchase the Common Shares owned by such Person
or to cause pressure on the Company to take action intended
to provide such person with short-term financial gain which,
in their determination, is not in the best long-term
interests of the Company and its shareholders or (ii) such
Beneficial Ownership is reasonably likely to cause a
material adverse impact on the business of the Company.
The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and
only with Common Share certificates. Until the Distribution
Date (or earlier redemption or expiration of the Rights),
the transfer of any certificate for Common Shares will also
constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, Right
Certificates will be mailed to holders of record of the
Common Shares as of the Close of Business on the
Distribution Date and, thereafter, such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the
Distribution Date and will expire at the Close of Business
on November 14, 2006, unless earlier redeemed or extended by
the Company as described below.
In the event that (i) a person or group becomes an
Acquiring Person (other than pursuant to an offer for all
outstanding Common Shares at a price and on terms which a
majority of the independent Directors determine to be
adequate and otherwise to be in the best interests of
shareholders) or (ii) the Board of Directors of the Company
declares a Person to be an Adverse Person, the Rights
Agreement provides that proper provision shall be made so
that each holder of a Right will thereafter have the right
to receive, upon the exercise thereof, Common Shares (or, in
certain circumstances, cash, property or other securities of
the Company) having a value equal to two (2) times the
exercise price of the Right. However, Rights are not
exercisable following the occurrence of either of the events
set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
Notwithstanding the foregoing, following the occurrence of
any of the events set forth in this paragraph, any Rights
that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by an Acquiring
Person or an Adverse Person shall immediately become null
and void.
In the event that following the Share Acquisition
Date, (i) the Company engages in a merger or consolidation
in which the Company is not the surviving corporation, (ii)
the Company engages in a merger or consolidation with
another person in which the Company is the surviving
corporation, but in which all or part of its Common Shares
are changed or exchanged, or (iii) 50% or more of the
Company's assets or earning power is sold or transferred
(except with respect to clause (i) and (ii), a "cleanup"
merger which follows an offer described in the preceding
paragraph), the Rights Agreement provides that proper
provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise
thereof, Common Shares of the acquiring company having a
value equal to two (2) times the exercise price of the
Right. The events set forth in this paragraph and in the
preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable, and the number of
Common Shares issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Common Shares, (ii)
upon the grant to holders of the Common Shares of certain
rights or warrants to subscribe for Common Shares or
securities convertible into Common Shares at less than the
current market price of the Common Shares, or (iii) upon the
distribution to holders of the Common Shares of evidences of
indebtedness or assets (excluding regular quarterly
dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Common Shares will be issued upon exercise of
the Rights and, in lieu thereof, a cash payment will be made
based on the market price of the Common Shares on the last
trading date prior to the date of exercise.
At any time after the date of the Rights Agreement
until ten days following the Share Acquisition Date, the
Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $0.01 per Right,
payable in cash or stock (the "Redemption Price").
Immediately upon the action of the Board of Directors of the
Company ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will
be to receive the Redemption Price. The foregoing
notwithstanding, the Rights may not be redeemed (i) at any
time subsequent to the Board of Directors' determination
that any Person is an Adverse Person or (ii) for a period of
180 days following a change in the majority of the Board of
Directors of the Company resulting from a proxy contest or
consent solicitation.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to
receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company,
shareholders may, depending upon the circumstances,
recognize taxable income in the event that a Triggering
Event shall occur.
Any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the
Board of Directors of the Company in order to cure any
ambiguity, defect or inconsistency; to shorten or lengthen
any time period under the Rights Agreement; or in any other
respect that will not adversely affect the interests of
holders of Rights; provided, however, that no amendment may
be made at such time as the Rights are not redeemable.
As of November 5, 1996, there were 52,261,831
Common Shares outstanding, 13,964,589 shares held in the
treasury and 8,845,593 Common Shares authorized for issuance
upon exercise of options granted under the Company's
employee benefit plans. Each outstanding Common Share on
November 14, 1996, will receive one Right. As long as the
Rights are attached to the Common Shares and in certain
other circumstances specified in the Rights Agreement, the
Company will issue one Right for each Common Share issued on
or after November 14, 1996.
The Rights may have certain anti-takeover effects.
The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company without
conditioning the offer on a substantial number of Rights
being acquired. The Rights should not interfere with any
merger or other business combination approved by the Board
of Directors of the Company since the Board of Directors
may, at its option, at any time prior to ten days following
the Share Acquisition Date redeem all but not less than all
the then outstanding Rights.
The form of Rights Agreement between the Company
and the Rights Agent specifying the terms of the Rights,
which includes as Exhibit A the form of Rights Certificate,
is attached hereto as Exhibit 1 and is incorporated herein
by reference. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety
by reference to such Exhibit.
Item 1. Exhibits.
Exhibit No. Exhibit
1 Form of Rights Agreement, dated as of
November 9, 1996, between The Mead
Corporation and The First National Bank
of Boston, as Rights Agent, which
includes as Exhibit A thereto the Form
of Rights Certificate. Pursuant to the
Rights Agreement, Rights Certificates
will not be mailed until after the
earlier of (i) the tenth day after the
Share Acquisition Date (ii) the tenth
Business Day after the date of the
commencement of a tender or exchange
offer by any person or group of
affiliated or associated persons, if
upon consummation thereof, such person
or group would be the beneficial owner
of 20% or more of such outstanding
Common Shares or (iii) the tenth day
after the Board of Directors determines
that a person is an Adverse Person.
SIGNATURE
Pursuant to be requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
THE MEAD CORPORATION
Date: November 13, 1996 /s/ William R. Grayber
Name: William R. Grayber
Title: Vice President and
Chief Financial
Officer
EXHIBIT INDEX
Exhibit Description Page
1 Form of Rights Agreement, dated 9
as of November 9, 1996, between
The Mead Corporation and The
First National Bank of Boston,
as Rights Agent, which includes
as Exhibit A thereto the Form of
Rights Certificate. Pursuant to
the Rights Agreement, Rights
Certificates will not be mailed
until after the earlier of (i)
the tenth day after the Share
Acquisition Date or (ii) the
tenth Business Day after the
date of the commencement of a
tender or exchange offer by any
person or group of affiliated or
associated persons, if upon
consummation thereof, such
person or group would be the
beneficial owner of 20% or more
of such outstanding Common
Shares or (iii) the tenth day
after the Board of Directors
determines that a Person is an
Adverse Person.
THE MEAD CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON
Rights Agent
___________
Rights Agreement
Dated as of November 9, 1996
Table of Contents
Section Page
1. Certain Definitions . . . . . . . . . . . . 2
2. Appointment of Rights Agent . . . . . . . . 5
3. Issuance of Rights Certificates . . . . . . 5
4. Form of Rights Certificates . . . . . . . . 7
5. Countersignature and Registration . . . . . 8
6. Transfer, Split Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . . 9
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . 10
8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . 12
9. Reservation and Availability of Common
Shares . . . . . . . . . . . . . . . . . 13
10. Common Share Record Date . . . . . . . . . . 14
11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights . 15
12. Certificate of Adjusted Purchase Price
or Number of Shares . . . . . . . . . . . 26
13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power . . . . . . . 26
14. Fractional Rights and Fractional Shares . . 29
15. Rights of Action . . . . . . . . . . . . . . 30
16. Agreement of Rights Holders . . . . . . . . 31
17. Rights Certificate Holder Not Deemed
a Shareholder . . . . . . . . . . . . . . 31
18. Concerning the Rights Agent . . . . . . . . 32
19. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . . . 32
20. Duties of Rights Agent . . . . . . . . . . . 33
21. Change of Rights Agent . . . . . . . . . . . 36
22. Issuance of New Rights Certificates . . . . 37
23. Redemption and Termination . . . . . . . . . 37
24. Notice of Certain Events . . . . . . . . . . 39
25. Notices . . . . . . . . . . . . . . . . . . 40
26. Supplements and Amendments . . . . . . . . . 40
27. Successors . . . . . . . . . . . . . . . . . 41
28. Determinations and Actions by the Board
of Directors, etc. . . . . . . . . . . . 41
29. Benefits of this Agreement . . . . . . . . . 42
30. Severability . . . . . . . . . . . . . . . . 42
31. Governing Law . . . . . . . . . . . . . . . 42
32. Counterparts . . . . . . . . . . . . . . . . 43
33. Descriptive Headings . . . . . . . . . . . . 43
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 9, 1996
(the "Agreement" or "Rights Agreement"), between The Mead
Corporation, an Ohio corporation (the "Company"), and The
First National Bank of Boston, a national banking
association organized under the laws of the United States
of America, as Rights Agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on November 1, 1986, the Board of
Directors of the Company, pursuant to Section 1701.16 of
the Ohio Revised Code, authorized the Rights Agreement
dated November 1, 1986 between the Company and The First
National Bank of Cincinnati (the "1986 Agreement") and
granted to each holder of a Common Share, without par
value, of the Company (the "Common Shares") outstanding
at the close of business on November 13, 1986 (the "1986
Record Date") the option and right to purchase, upon the
terms and subject to the conditions set forth in the 1986
Agreement, one option and right to purchase one Common
Share for each Common Share so held on the 1986 Record
Date at an initial purchase price of $180 per share,
subject to adjustment as provided in the 1986 Agreement
(such options and rights are hereinafter referred to as
the "1986 Rights") and also authorized and granted one
1986 Right for each Common Share issued or delivered
(whether originally issued or delivered from the
Company's treasury) between the 1986 Record Date and the
Distribution Date (as such term is defined in Section 3
of the 1986 Agreement);
WHEREAS, on November 9, 1996, the Board of
Directors of the Company determined it desirable and in
the best interests of the Company and its shareholders
for the Company to extend the benefits afforded by the
1986 Agreement and to implement such extension by
executing this Agreement;
WHEREAS, on November 9, 1996, the Board of
Directors of the Company, pursuant to Section 1701.16 of
the Ohio Revised Code, authorized and granted to each
holder of a Common Share, outstanding at the close of
business on November 14, 1996 (the "Record Date") the
option and right to purchase, upon the terms and subject
to the conditions hereinafter set forth, one Common Share
for each Common Share so held on the Record Date at an
initial purchase price of $200 per share, subject to
adjustment as provided hereinafter (such options and
rights are hereinafter referred to as the "Rights") and
also authorized and granted one Right for each Common
Share issued or delivered (whether originally issued or
delivered from treasury) between the Record Date and the
Distribution Date (as such term is defined in Section 3
hereof);
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 Common Shares then outstanding, but
shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan or employee
stock plan of the Company or of any Subsidiary of the
Company, (iv) the dividend reinvestment plan of the
Company or (v) any Person or entity organized, appointed
or established by the Company for or pursuant to the
terms of any such plan.
(b) "Adverse Person" shall mean any
Person with respect to whom the Board of Directors of the
Company has made a determination referred to in Section
11(a)(ii)(B), thereby giving rise to a Triggering Event.
(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
Exchange Act, as in effect on the date of this Agreement.
(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
writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant
to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase
or exchange; (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
has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act and any successor
provision thereof), 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 the
"Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's
participation in good faith in a firm commitment
underwriting (pursuant to an underwriting agreement
with the Company) until the expiration of forty (40)
days after the date of such acquisition.
(e) "Business Day" shall mean any day
other than a Saturday, Sunday or a day on which banking
institutions in the States of Ohio, New York or
Massachusetts 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., Eastern time, on such date;
provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., Eastern time, on the next
succeeding Business Day.
(g) "Common Shares" shall mean the Common
Shares, without par value, of the Company, except that
"Common Shares" when used with reference to any Person
other than the Company shall mean the capital shares 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.
(i) "Section 11(a)(ii) Event" shall mean
any event described in Section 11(a)(ii)(A) or (B)
hereof.
(j) "Section 13 Event" shall mean any
event described in clauses (x), (y) or (z) of Section
13(a) hereof.
(k) "Share 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 (or any comparable or successor
report)) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(l) "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 which is otherwise controlled by such Person.
(m) "Triggering Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common
Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint
such co-rights agents as it may deem necessary or
desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on
the tenth day after the Share Acquisition Date (or, if
the tenth day after the Share Acquisition Date occurs
before the Record Date, the Close of Business on the
Record Date), or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by
the Company's Board of Directors) 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 or employee stock plan of the Company or of
any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 20% or more of the
Common Shares then outstanding, or (iii) the Close of
Business on the tenth day after the Board of Directors of
the Company determines 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 (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common
Shares registered in the names of the holders of the
Common Shares (which certificates for Common Shares 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 Common Shares (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 Shares
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 "Rights Certificates"),
evidencing one Right for each Common Share so held,
subject to adjustment as provided herein. As of and
after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) The Company will make available a
copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit B (the "Summary of Rights") to
any holder of Rights who may so request from time to
time. With respect to certificates for the Common Shares
outstanding as of the Record Date or issued subsequent to
the Record Date, unless and until the Distribution Date
shall occur, the Rights will be evidenced by such
certificates for the Common Shares and the registered
holders of the Common Shares shall also be the registered
holders of the associated Rights. Until the earlier of
the Distribution Date or the Expiration Date (as such
term is defined in Section 7 hereof), the transfer of any
certificates representing Common Shares in respect of
which Rights have been issued shall also constitute the
transfer of the Rights associated with such Common
Shares.
(c) Rights shall be issued in respect of
all Common Shares which are issued (whether originally
issued or from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date or
the Expiration Date. Certificates issued after the
Record Date but prior to the earlier of the Distribution
Date or the Expiration Date upon the transfer or new
issuance of Common Shares shall also be deemed to be
certificates for Rights, and shall bear the following
legend (or the legend required under the 1986 Agreement):
This certificate also evidences and
entitles the holder hereof to certain Rights as
set forth in the Rights Agreement between The
Mead Corporation and the Rights Agent
thereunder (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 Mead Corporation.
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
Mead Corporation 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 therefor. Under certain
circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring
Person or an Adverse Person or any Affiliates
or Associates thereof (as such terms are
defined in the Rights Agreement), whether
currently held by or on behalf of such Person
or by any subsequent holder, may become null
and void.
With respect to such certificates containing the
foregoing legend (or the legend required under the 1986
Agreement), until the earlier of (i) the Distribution
Date or (ii) the Expiration Date, the Rights associated
with the Common Shares represented by such certificates
shall be evidenced by such certificates alone and
registered holders of Common Shares 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 Shares represented by such certificates.
Section 4. Form of Rights Certificates. (a)
The Rights 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 listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 22
hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number
of Common Shares as shall be set forth therein at the
price per share set forth therein (the "Purchase Price"),
but the number of shares purchasable upon the exercise of
each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued
pursuant to Section 3(a), Section 11(i) or Section 22
hereof that represents Rights beneficially owned by: (i)
an Acquiring Person or an Adverse Person or any Associate
or Affiliate thereof, (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, as the case may be, 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, as the case
may be, 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, as the case may be, 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 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
avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned by a
Person who was or became an Acquiring Person or
an Adverse Person or an Affiliate or Associate
thereof (as such terms are defined in the
Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby
may become void in the circumstances specified
in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board of Directors,
its President or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto
the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature.
The Rights Certificates shall be countersigned manually
by the Rights Agent, and shall not be valid for any
purpose unless so countersigned. In case any officer of
the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate,
shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution
of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its
principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise
or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of
the Rights Certificates, the Certificate number of the
Rights Certificate, the number of Rights evidenced on its
face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination
and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates. (a)
Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase
(or receive) a like number of Common Shares (or,
following a Triggering Event, other securities, cash or
other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitles
such holder (or former holder in the case of a transfer)
to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices
of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer
of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the
certificate contained in the form of assignment set forth
on the reverse side of each such Rights Certificate and
shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section
14 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them
of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in the case of loss, theft or
destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in
lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase
Price; Expiration Date of Rights. (a) Subject to
Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth
in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase set
forth on the reverse side thereof and the certificate
contained therein 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
Purchase Price with respect to each surrendered Right for
the total number of shares (or other securities or
property, as the case may be) as to which such
surrendered Rights are exercisable, at or prior to the
earlier of (i) the Close of Business on November 14, 2006
(the "Final Expiration Date"), or (ii) the time at which
the Rights are redeemed as provided in Section 23 hereof
(the earlier of (i) or (ii) being herein referred to as
the "Expiration Date").
(b) The Purchase Price for each Common
Share pursuant to the exercise of a Right shall initially
be $200, and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of
election to purchase set forth on the reverse side
thereof and the certificate contained therein duly
executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price for the shares
(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) requisition from any transfer agent of the
Common Shares (or make available, if the Rights Agent is
the transfer agent for the Common Shares) certificates
for the total number of Common Shares to be purchased and
the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests subject to
applicable law, (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional
Common Shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates from Common Shares,
cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate,
registered in such name or names as may be designated by
such holder, and (iv) after receipt thereof, deliver such
cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) may 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 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
Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this
Agreement to the contrary, from and after the first
occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an
Adverse Person or an Associate or Affiliate thereof, (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, as the case may be, 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, as the case may be,
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, as the case
may be, 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 continuing
agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and
no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use
all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied
with but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring
Person or an Adverse Person or any Affiliate, Associate
or transferee thereof 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 signed the certificate contained in the form of
election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of
Rights Certificates. All Rights Certificates surrendered
for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights
Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the
provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to
the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of
Common Shares. (a) The Company covenants and agrees
that it will cause to be reserved and kept available out
of its authorized and unissued Common Shares or Common
Shares held in its treasury, the number of Common Shares
that, except as provided in Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the Common Shares issuable
and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company
shall use its reasonable efforts to cause, from and after
such time as the Rights become exercisable and the
Company reasonably anticipates that a Right may be
exercised, 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 reasonable
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 or regulation
following the Distribution Date, as the case may be, a
registration statement under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the
Common Shares or other 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 set forth in
clause (i) of the first sentence of this Section 9(c)(i),
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. In addition,
if the Company shall determine that a registration
statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of
the Rights until such time as a registration statement
has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction has not been
obtained, the exercise thereof is not permitted under
applicable law or a registration statement has not been
declared effective.
(d) The Company covenants and agrees that
it will take all such action as may be necessary to
ensure that all Common Shares 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
Rights Certificates and of any certificates for Common
Shares (or other securities, as the case may be), upon
the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or
delivery of the Common Shares (or other securities, as
the case may be) in respect of a name other than that of,
the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or
deliver any certificates for Common Shares (or other
securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights
until such tax shall have been paid (any such tax being
payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Common Share Record Date. Each
Person in whose name any certificate for Common Shares
(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 Common Shares
(or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights
were duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment
is a date upon which the Common Shares (or other
securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business
Day on which the Common Shares (or other securities, as
the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate shall not be entitled
to any rights of a shareholder of the Company with
respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number of Rights. The
Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event the Company
shall at any time after the Record Date (A)
declare a dividend on the Common Shares payable
in Common Shares, (B) subdivide the outstanding
Common Shares, (C) combine the outstanding
Common Shares into a smaller number of shares,
or (D) issue any shares of its capital shares
in a reclassification of the Common Shares
(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 Common Shares or capital shares, 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 Common Shares or capital
shares, as the case may be, which, if such
Right had been exercised immediately prior to
such date and at a time when the Common Shares
(or other capital shares, as the case may be)
transfer books of the Company were open, he
would have owned upon such exercise and been
entitled to receive by virtue of such dividend,
subdivision, combination or reclassification;
provided, however, that if the record date for
any such dividend, subdivision, combination or
reclassification shall occur prior to the
Distribution Date, the Company shall make an
appropriate adjustment to the Purchase Price
(taking into account any additional Rights
which may be issued as a result of such
dividend, subdivision, combination or
reclassification), in lieu of adjusting (as
described above) the number of Common Shares
(or other capital shares, as the case may be)
issuable upon exercise of the Rights. 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) any Person, alone or
together with its Affiliates and Associates,
shall, at any time after the date hereof,
become an Acquiring Person, unless the event
causing such Person to become an Acquiring
Person is a transaction set forth in Section
13(a) hereof, or is an acquisition of Common
Shares pursuant to a tender offer or exchange
offer for all outstanding Common Shares at a
price and on terms determined by at least a
majority of the members of the Board of
Directors who are not officers of the Company
and who are not representatives, nominees,
Affiliates or Associates of an Acquiring
Person, after receiving advice from one or more
investment banking firms, to be (a) at a price
that is adequate (taking into account all
factors that such members of the Board of
Directors of the Company deem 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 shareholders, or
(B) the Board of Directors of the
Company 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 date of this Agreement, become
the Beneficial Owner of an amount of Common Shares
which the Board of Directors of the Company
determines to be substantial (which amount shall in
no event be less than 10% of the Common Shares then
outstanding) and a determination by at least a
majority of the members of the Board of Directors
who are not officers and who are not
representatives, nominees, Affiliates or Associates
of such Person, after reasonable inquiry and
investigation, including consultation with such
persons as the Board of Directors of the Company
shall deem appropriate, that (a) such Beneficial
Ownership by such Person is intended to cause the
Company to repurchase the Common Shares 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 of the
Company determines that the best long-term interests
of the Company and its shareholders would not be
served by taking such action or entering into such
transactions 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
relationships with customers or impairment of the
Company's ability to maintain its competitive
position) on the business or prospects of the
Company,
then, promptly following the first occurrence of a
Section 11(a)(ii) Event, proper provision shall be made
so that each holder of a Right (except as provided below
and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of
this Agreement, such number of Common Shares of the
Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then
number of Common Shares for which a Right was exercisable
by such holder immediately prior to the first occurrence
of a Section 11(a)(ii) Event, and dividing that product
(such product, following such first occurrence, shall be
referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by (y) 50% of the
current market price (determined pursuant to Section
11(d) hereof) per Common Share on the date of such first
occurrence (such number of shares is herein called the
"Adjustment Shares").
(iii) In the event that the sum of
the number of authorized, but unissued Common Shares
and the number of Common Shares held in treasury
(including for this purpose the number of
authorized, but unissued or treasury shares reserved
for issuance upon exercise of the Rights) minus the
number of Common Shares (whether authorized, but
unissued shares or treasury shares) reserved for
issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise
in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a),
the Company shall: (A) determine the excess of (1)
the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2)
the Purchase Price (such excess, the "Spread"), and
(B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3)
Common Shares or other equity securities of the
Company (including, without limitation, preferred
shares, or units of preferred shares, which the
Board of Directors of the Company, based on the
advice of a nationally recognized investment banking
firm, has deemed to be substantially economically
equivalent to the Common Shares (such preferred
shares, "common share 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 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 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 first occurrence of (x) 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,
Common Shares (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 Common Shares
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 shareholder approval for the
authorization of such additional shares (such
period, as it may be extended, 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 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)(iii), the value of the Common Shares shall be
the current market price (as determined pursuant to
Section 11(d) hereof) per Common Share on a Section
11(a)(ii) Trigger Date and the value of any "common
share equivalent" shall be deemed to have the same
value as the Common Shares on such date.
(b) In case the Company shall fix a
record date for the issuance of rights (other than the
Rights), options or warrants to all holders of Common
Shares entitling them to subscribe for or purchase (for a
period expiring within forty-five (45) calendar days
after such record date) Common Shares, shares having the
same rights, privileges and preference as the Common
Shares ("equivalent Common Shares") or securities
convertible into Common Shares or equivalent Common
Shares at a price per Common Share or equivalent Common
Share (or having a conversion price per share, if a
security convertible into Common Shares or equivalent
Common Shares) less than the current market price (as
determined pursuant to Section 11(d) hereof) per Common
Share on such record date, the Purchase Price to be in
effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of
which shall be the number of Common Shares outstanding on
such record date, plus the number of Common Shares which
the aggregate offering price of the total number of
Common Shares and/or equivalent Common Shares 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 Common Shares outstanding
on such record date, plus the number of additional Common
Shares and/or equivalent Common Shares to be offered for
subscription of purchase (or into which the convertible
securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the
Rights. Common Shares owned by or held for the account
of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is
fixed; and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a
record date for a distribution to all holders of Common
Shares (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
dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Common
Shares, but including any dividend payable in shares
other than Common Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the
current market price (as determined pursuant to Section
11(d) hereof) per Common Share 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 Common Share and the
denominator of which shall be such current market price
(as determined pursuant to Section 11(d) hereof) per
Common Share. 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) For the purpose of any computation
hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the "current market price" per
Common Share on any date shall be deemed to be the
average of the daily closing prices per Common Share 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) hereof, the "current market price" per Common
Share on any date shall be deemed to be the average of
the daily closing prices per Common Share for the ten
(10) consecutive Trading Days immediately following such
date; provided, however, that in the event that the then
current market price per Common Share is determined
during a period following the announcement by the issuer
of such Common Shares of (i) any dividend or distribution
on such Common Shares payable in such Common Shares or
securities convertible into Common Shares (other than the
Rights), (ii) any subdivision, combination or
reclassification of such Common Shares, 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 Common Shares 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
Common Shares are listed or admitted to trading or, if
the Common Shares are not listed or admitted to trading
on any national securities exchange, the last quoted sale
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 Common Shares are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker making
a market in the Common Shares selected by the Board of
Directors of the Company. If on any such date no market
maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good
faith by the Board of Directors of the Company shall be
used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the
Common Shares are listed or admitted to trading is open
for the transaction of business or, if the Common Shares
are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common
Shares are 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.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share, 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) or Section 13(a) hereof, the
holder of any Right thereafter exercised shall become
entitled to receive any capital shares other than Common
Shares; 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 an manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common
Shares contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j) and (l) hereof, and the provisions of
Sections 7, 9, 10, 13, and 14 hereof with respect to the
Common Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the
Company subsequent to any adjustment made to the Purchase
Price hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of Common Shares
(or other consideration, as the case may be) 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 following the Share
Acquisition Date (or, if earlier, the date on which a
Person is declared to be an Adverse Person) 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
Common Shares (calculated to the nearest one-ten-
thousandth) obtained by (i) multiplying (x) the number of
shares covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(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 Common Shares 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 Common Shares 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 Rights Certificates have been issued, shall
be at least ten (10) days later than the date of the
public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record
date Rights Certificates evidencing, subject to Section
14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement
for the Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or
change in the Purchase Price or the number of Common
Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the
number of shares which were expressed in the initial
Rights Certificates issued hereunder.
(k) 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 Common Shares and
other capital shares or securities of the Company, if
any, issuable upon such exercise over and above the
Common Shares and other capital shares 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 Common Shares and other capital shares or
securities upon the occurrence of the event requiring
such adjustment.
(l) Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith
judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i)
consolidation or subdivision of the Common Shares, (ii)
issuance for cash of any Common Shares at less than the
current market price, (iii) issuance for cash of Common
Shares or securities which by their terms are convertible
into or exchangeable for Common Shares, (iv) stock
dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the
Company to holders of its Common Shares shall not be
taxable to such shareholders.
(m) 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(n) hereof), (ii) merge with or into any
other Person other than a Subsidiary of the Company in a
transaction which complies with Section 11(n) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other
Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of
which complies with Section 11(n) 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
shareholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates
and Associates.
(n) 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 eliminate the
benefits intended to be afforded by the Rights.
(o) The failure by the Board of Directors
of the Company to declare a Person to be an Adverse
Person following such Person becoming the Beneficial
Owner of 10% or more of the outstanding Common Shares
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 and Section 13 hereof, the
Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the
Common Shares, a copy of such certificates, and (c), if a
Distribution Date has occurred, mail a brief summary
thereof to each holder of a Rights Certificate 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 or Earning Power. (a) In the event
that, following the Share Acquisition Date (or, if
earlier, the date on which a Person is declared to be an
Adverse Person), directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other
Person, and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(y) any Person 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 Common Shares
shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any
Subsidiary of the Company), then, and in each such case
(except as may be contemplated by Section 13(d) hereof),
proper provision shall be made so that: (i) each holder
of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number
of validly authorized and issued, fully paid, non-
assessable and freely tradeable Common Shares of the
Principal Party (as such term is hereinafter defined) as
shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of Common
Shares for which a Right is exercisable by such holder
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(a) Event,
multiplying the Purchase Price in effect immediately
prior to the first occurrence of such Section 11(a)(ii)
Event by the number of Common Shares for which a Right
was exercisable immediately prior to such first
occurrence) and dividing that product (such product,
following the first occurrence of a Section 13(a) Event,
shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50%
of the current market price (determined pursuant to
Section 11(d) hereof with respect to the Common Shares)
per Common Share of such Principal Party on the date of
consummation of the Section 13(a) 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 its
Common Shares) 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 common
shares 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.
(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
Common Shares 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 or earning power
transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the
Common Shares 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 Shares of which are and have
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 Shares 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
Shares having the greatest aggregate market value.
(c) The Company shall not consummate any
such consolidation, merger, sale or transfer unless the
Principal Party shall have a sufficient number of
authorized Common Shares which have not been issued
or reserved for issuance to permit the exercise in full
of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of
any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party
will:
(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
(ii) will deliver to holders of
the Rights historical financial statements for
the Principal Party and each of its Affiliates
which comply in all respects with the
requirements for registration on Form 10 under
the Exchange Act.
The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other
transfers. In the event that a Section 13 Event shall
occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(d) Notwithstanding anything in this
Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired Common
Shares pursuant to a tender offer or exchange offer for
all outstanding Common Shares 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 Common Share offered in such transaction is not
less than the price per Common Share paid to all holders
of Common Shares 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 Common Shares 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 or to distribute Rights Certificates
which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current
market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
The closing price of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which the Rights are listed or admitted to trading, or if
the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by any such
organization, the average of the closing bid and asked
prices (as furnished by a professional market maker
making a market in the Rights 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 Common Shares upon exercise of the
Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common
Shares, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same
fraction of the current market value of one Common Share.
For purposes of this Section 14(b), the current market
value of one Common Share shall be the closing price of a
Common Share (as determined pursuant to Section 11(d)
hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right by the
acceptance of the Rights expressly waives his right to
receive any fractional Rights or any fractional shares
upon exercise of a Right.
Section 15. Rights of Action. All rights of
action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder
of any Rights Certificate (or, prior to the Distribution
Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in
this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach
of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive
relief against actual or threatened violations of the
obligations hereunder of any Person subject to this
Agreement.
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 Shares;
(b) after the Distribution Date, the
Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section
7(f) hereof, the Company and the Rights Agent may deem
and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated
Common Share certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Share
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be
affected by any notice 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 must use its reasonable
efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not
Deemed a Shareholder. No holder, as such, of any Rights
Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Common
Shares or any other securities of the Company which may
at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon
the holder of any Rights Certificate, as such, any of the
rights of a shareholder of the Company or any right to
vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to
give or withhold consent of any corporate action, or to
receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (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 any claim of liability in the premises.
(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 Rights Certificate or certificate for Common
Shares 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 or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any
further act on the part of any of the parties hereto;
provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at
the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall
not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor
Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the
Rights Agent shall be changed and at such time any of the
Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights
Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The
Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof,
shall be bound:
(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 of
Directors, any Vice Chairman, the President, any Vice
President, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable
hereunder only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable
for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as
to its countersignature on such Rights Certificates), but
all such statements and recitals are and shall be deemed
to have been made by the Company only.
(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 and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any
Rights Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company
of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible
for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
Common Shares to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any Common Shares
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 of Directors, any Vice Chairman, the President,
any Vice President, the Secretary or the 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 stockholder,
director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and
exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act,
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 reasonable
grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth
on the reverse thereof, 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.
Section 21. Change of Rights Agent. The
Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon
thirty (30) days notice in writing mailed to the Company,
and to each transfer agent of the Common Shares, by
registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent
upon thirty (30) days notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares, by
registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30)
days after giving notice of such removal or after it has
been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent
or by any registered holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court
of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a)
a legal business entity organized and doing business
under the laws of the United States or of the States of
New York, Massachusetts or Ohio (or of any other state of
the United States so long as such corporation is
authorized to do business in the States of New York,
Massachusetts or Ohio), in good standing, having a
principal office in the States of New York, Massachusetts
or Ohio, 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
$50,000,000 or (b) an affiliate of any such legal
business entity described in clause (a) above. 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
Shares, and mail a notice thereof in writing to the
registered holders of the Rights 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 Rights
Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under
the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the
Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with
respect to Common Shares 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 Rights Certificates representing the appropriate
number of Rights in connection with such issuance or
sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such
issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (ii) no
such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a)
The Board of Directors of the Company may, at its option,
at any time prior to the Close of Business on the earlier
of (i) the tenth day following the Share Acquisition Date
(or, if the Share Acquisition Date shall have occurred
prior to the Record Date, the Close of Business on the
fifteenth day following the Record Date), or (ii) the
Final Expiration Date, redeem all but not less than all
the then outstanding Rights at a redemption price of
$0.01 per Right, as such amount shall be appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the
"Redemption Price"); and the Company may, at its option,
pay the Redemption Price either in Common Shares (based
on the "current market price", as defined in Section
11(d)(i) hereof, of the Common Shares at the time of
redemption), cash or any other form of consideration
deemed appropriate by the Board of Directors of the
Company. 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. Notwithstanding the
foregoing, the Board of Directors of the Company may not
redeem any Rights (i) at any time subsequent to having
made the determination that any Person is an Adverse
Person or (ii) for a period of one hundred and eighty
(180) days following the effectiveness of an election in
which (A) a majority of the Board of Directors of the
Company were elected by shareholder action by written
consent or (B) a majority of the Board of Directors of
the Company elected at a meeting of Shareholders were not
nominated by the Board of Directors in office immediately
prior to such meeting, if such redemption is reasonably
likely to have the purpose or effect of allowing any
Person to become an Acquiring Person or otherwise
facilitating the occurrence of a Triggering Event or a
transaction with an Acquiring Person.
(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 of the Company 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 Shares. 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
shares of any class to the holders of Common Shares or to
make any other distribution to the holders of Common
Shares (other than a regular quarterly dividend out of
earnings or retained earnings of the Company), or (ii) to
offer to the holders of Common Shares rights or warrants
to subscribe for or to purchase any additional Common
Shares or shares of any class or any other securities,
rights or options, or (iii) to effect any
reclassification of its Common Shares (other than a
reclassification involving only the subdivision of
outstanding Common Shares), or (iv) to effect any
consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in
one transaction or series of related transactions, of
more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any
other Person, or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible, and in
accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for
the purposes of such share 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
Common Shares, 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 Common Shares 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 Common Shares, whichever shall be the earlier.
(b) In case any of the events set forth
in Section 11(a)(ii) hereof shall occur, then, in any
such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate,
to the extent feasible, 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.
Section 25. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the
Rights Agent) as follows:
The Mead Corporation
Mead World Headquarters
Courthouse Plaza Northeast
Dayton, Ohio 45463
Attention: Secretary
Subject to the provisions of Section 21, any notice or
demand authorized by this Agreement to be given or made
by the Company or by the holder of any Rights Certificate
to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with
the Company) as follows:
The First National Bank of Boston
c/o Boston EquiServe, L.P.
150 Royall Street
Canton, Massachusetts 02021
Attention: Client Administration
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 Common Shares) 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, 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
Common Shares. From and after the Distribution Date, the
Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to
change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable
and which shall not adversely affect the interests of the
holders of Rights Certificates; or (iv) to shorten or
lengthen any time period hereunder; provided, from and
after the Distribution Date, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause
(iv) of this sentence, any time period hereunder 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.
Notwithstanding anything contained in this Agreement to
the contrary, this Agreement may not be amended at a time
when the Rights are not redeemable. Prior to the
Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the
holders of Common Shares.
Section 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 Common Shares
outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the
Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3d(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect as of
the date hereof. 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 Directors or
the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without
limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a
determination to redeem or not redeem the Rights, 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 (ii) below, all omissions with respect
to the foregoing) which are done or made by the Board of
Directors in good faith, shall (i) be final, conclusive
and binding on the Company, the Rights Agent, the holders
of the Rights and all other parties, and (ii) not subject
the Board of Directors to any liability to the holders of
the Rights Certificates.
Section 29. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the
Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be
for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date,
registered holders of the Common Shares).
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 of the Company.
Without limiting the foregoing, if any provision
requiring a determination by only certain members of the
Board of Directors (as it may then be constituted) is
held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such
determination shall then be made by the Board of
Directors of the Company in accordance with applicable
law and the Company's Amended Articles of Incorporation
and Regulations and the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way
be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement,
each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of
the State of Ohio 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.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and their
respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: THE MEAD CORPORATION
By: By: /s/ William R. Grayber
Name: Name: William R. Grayber
Title: Title: Vice President and
Chief Financial
Officer
Attest: THE FIRST NATIONAL BANK
OF BOSTON
By: By: /s/ Katherine S. Anderson
Name: Name: Katherine S. Anderson
Title: Title: Director Client
Services
Exhibit A
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER NOVEMBER 14, 2006 OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, A $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT (AS
DEFINED HEREIN). UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ADVERSE
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (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 RIGHTS 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 THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE RIGHTS AGREEMENT.](1)
______________________
(1) The portion of the legend in brackets shall be
inserted only if applicable and shall replace the
preceding sentence.
Rights Certificate
THE MEAD CORPORATION
This certifies that ____________, or registered
assigns, is the registered holder 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 November 9, 1996
(the "Rights Agreement"), between The Mead Corporation,
an Ohio corporation (the "Company"), and The First
National Bank of Boston, a national banking association
organized under the laws of the United States of America
(the "Rights Agent"), to purchase from the Company at any
time prior to 5:00 P.M. (Eastern time) on November 14,
2006 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights
Agent, one fully paid and non-assessable Common Share,
without par value (the "Common Shares"), of the Company,
at a purchase price of $200 per share (the "Purchase
Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase set
forth on the reverse hereof and the Certificate contained
therein duly executed. The Purchase Price shall be paid
at the election of the holder, in cash, Common Shares of
the Company having an equivalent value, or a combination
thereof. The number of Rights evidenced by this Rights
Certificate, the number of Common Shares which may be
purchased upon exercise thereof and the Purchase Price
per Common Share, set forth above, are the number of
Rights, number of Common Shares and Purchase Price as of
November 9, 1996, based on the Common Shares as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii)
Event (as such term is defined in the Rights Agreement),
if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an
Adverse Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person or Adverse Person
(or any such 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 or an Adverse Person, as the case may
be, such Rights shall become null and void and no holder
hereof shall have any rights 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 Common Shares
or other securities, which may be purchased upon the
exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment
upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of
the terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby
made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the
Rights Certificates, 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 above-mentioned office of the Rights Agent
and are also available upon written request to the
Company.
This Rights Certificate, with or without other
Rights Certificates, upon surrender at the principal
office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate
number of Common Shares as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights
Agreement, the Rights evidenced by this Certificate may
be redeemed by the Board of Directors of the Company at
its option at a redemption price of $0.01 per Right at
any time prior to the earlier of the Close of Business on
(i) the tenth day following the Share Acquisition Date
(as such time period may be extended pursuant to the
Rights Agreement), and (ii) the Final Expiration Date.
The foregoing notwithstanding, the Rights may not be
redeemed (i) at any time subsequent to the Board of
Directors of the Company having made the determination
that any Person is an Adverse Person or (ii) for a period
of 180 days following a change in the majority of the
Board of Directors of the Company resulting from a proxy
contest or consent solicitation.
No fractional Common Shares will be issued upon
the exercise of any Right or Rights evidenced hereby, but
in lieu thereof a cash payment will be made, as provided
in the Rights Agreement.
No holder of this Rights Certificate shall be
entitled to vote or receive dividends or be deemed for
any purpose the holder of the Common Shares 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 shareholder of the Company or any right to
vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced
by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of _______ __, 19__
ATTEST: THE MEAD CORPORATION
By:
Secretary Name:
Title:
Countersigned:
THE FIRST NATIONAL BANK
OF BOSTON
By:
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all rights, title
and interest therein, and does hereby irrevocably
constitute and appoint ______________ Attorney, to
transfer the within Rights Certificate on the books of
the within-named Company, with full power of
substitution.
Dated: _______________, 19__
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is
not being sold, assigned and transferred by or on behalf
of a Person who is or was an Acquiring Person or an
Adverse Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an
Acquiring Person or an Adverse Person or an Affiliate or
Associate thereof.
Dated: _____________, 19__
Signature
NOTICE
The signatures to the foregoing Assignment and
Certificate must correspond to the name as written upon
the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to
exercise Rights represented by the Rights Certificate.)
To: THE MEAD CORPORATION:
The undersigned hereby irrevocably elects to
exercise _________ Rights represented by this Rights
Certificate to purchase the Common shares 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:
(Please print name and address)
Please insert social security
or other identifying number:
If such number of Rights shall not be all the
Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
(Please print name and address)
Please insert social security
or other identifying number:
Dated: ________________, 19__
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking
the appropriate boxes that:
(1) the Rights evidenced by this Rights
Certificate [ ] are [ ] are not being exercised by or
on behalf of a Person who is or was an Acquiring Person
or an Adverse Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best
knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an
Acquiring Person or an Adverse Person or an Affiliate or
Associate thereof.
Dated: ______________, 19__
Signature
NOTICE
The signatures to the foregoing Election to
Purchase and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any
change whatsoever.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On November 9, 1996, the Board of Directors of
The Mead Corporation, an Ohio corporation (the
"Company"), authorized and granted to each holder of a
Common Share, without par value, of the Company (the
"Common Shares") outstanding at the close of business on
November 14, 1996 (the "Record Date") one Right for each
Common Share held as of the Record Date. Each Right
entitles the registered holder to purchase from the
Company one Common Share at a price of $200 (the
"Purchase Price"), subject to adjustment in certain
circumstances. The Purchase Price may be paid, at the
election of the registered holder, in cash, Common Shares
or a combination thereof.
The description and terms of the Rights are set
forth in a Rights Agreement, dated as of November 9, 1996
(the "Rights Agreement"), between the Company and The
First National Bank of Boston, as Rights Agent.
Initially, the Rights will be attached to the
certificates representing outstanding Common Shares, and
no separate certificates evidencing the Rights (the
"Rights Certificates") will be distributed. Until the
earlier to occur of (i) ten days following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of
20% or more of the outstanding Common Shares (the "Share
Acquisition Date"), (ii) ten Business Days following the
commencement of (or public announcement of the intent to
commence) a tender offer or exchange offer by any person
or group if upon consummation thereof, such person or
group would be the beneficial owner of 20% or more of the
outstanding Common Shares or (iii) ten days following a
determination by the Board of Directors of the Company
that any Person is an Adverse Person (the earliest of
such dates being called the "Distribution Date"), the
Rights will be evidenced by the Common Share
certificates. The Board of Directors of the Company will
declare any Person to be an Adverse Person upon their
determination that such Person has become the Beneficial
Owner of a substantial amount (i.e., not less than 10%)
of the Common Shares then outstanding and upon the
determination by a majority of the independent Directors
that: (i) such Beneficial Ownership is intended to cause
the Company to repurchase the Common Shares owned by such
Person or to cause pressure on the Company to take action
intended to provide such Person with short-term financial
gain which, in their determination, is not in the best
long-term interests of the Company and its shareholders
or (ii) such Beneficial Ownership is reasonably likely to
cause a material adverse impact on the business of the
Company.
The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with
and only with Common Share certificates. Until the
Distribution Date (or earlier redemption or expiration of
the Rights), the transfer of any certificate for Common
Shares will also constitute the transfer of the Rights
associated with the Common Shares represented by such
certificate. As soon as practicable following the
Distribution Date, Right Certificates will be mailed to
holders of record of the Common Shares as of the Close of
Business on the Distribution Date and, thereafter, such
separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the
Distribution Date and will expire at the Close of
Business on November 14, 2006, unless earlier redeemed or
extended by the Company as described below.
In the event that (i) a person or group becomes
an Acquiring Person (other than pursuant to an offer for
all outstanding Common Shares at a price and on terms
which a majority of the independent Directors determine
to be adequate and otherwise to be in the best interests
of shareholders) or (ii) the Board of Directors of the
Company declares a Person to be an Adverse Person, the
Rights Agreement provides that proper provision shall be
made so that each holder of a Right will thereafter have
the right to receive, upon the exercise thereof, Common
Shares (or, in certain circumstances, cash, property or
other securities of the Company) having a value equal to
two (2) times the exercise price of the Right. However,
Rights are not exercisable following the occurrence of
either of the events set forth above until such time as
the Rights are no longer redeemable by the Company as set
forth below. Notwithstanding the foregoing, following
the occurrence of any of the events set forth in this
paragraph, any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by an Acquiring Person or an Adverse
Person shall immediately become null and void.
In the event that following the Share
Acquisition Date, (i) the Company engages in a merger or
consolidation in which the Company is not the surviving
corporation, (ii) the Company engages in a merger or
consolidation with another person in which the Company is
the surviving corporation, but in which all or part of
its Common Shares are changed or exchanged, or (iii) 50%
or more of the Company's assets or earning power is sold
or transferred (except with respect to clause (i) and
(ii), a "cleanup" merger which follows an offer described
in the preceding paragraph), the Rights Agreement
provides that proper provision shall be made so that each
holder of a Right shall thereafter have the right to
receive, upon the exercise thereof, Common Shares of the
acquiring company having a value equal to two (2) times
the exercise price of the Right. The events set forth in
this paragraph and in the preceding paragraph are
referred to as the "Triggering Events."
The Purchase Price payable, and the number of
Common Shares issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the
Common Shares, (ii) upon the grant to holders of the
Common Shares of certain rights or warrants to subscribe
for Common Shares or securities convertible into Common
Shares at less than the current market price of the
Common Shares, or (iii) upon the distribution to holders
of the Common Shares of evidences of indebtedness or
assets (excluding regular quarterly dividends) or of
subscription rights or warrants (other than those
referred to above).
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional Common Shares will be
issued upon exercise of the Rights and, in lieu thereof,
a cash payment will be made based on the market price of
the Common Shares on the last trading date prior to the
date of exercise.
At any time after the date of the Rights
Agreement until ten days following the Share Acquisition
Date, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $0.01
per Right, payable in cash or stock (the "Redemption
Price"). Immediately upon the action of the Board of
Directors of the Company ordering redemption of the
Rights, the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption
Price. The foregoing notwithstanding, the Rights may not
be redeemed (i) at any time subsequent to the Board of
Directors' determination that any Person is an Adverse
Person or (ii) for a period of 180 days following a
change in the majority of the Board of Directors of the
Company resulting from a proxy contest or consent
solicitation.
Until a Right is exercised, the holder thereof,
as such, will have no rights as a shareholder of the
Company, including, without limitation, the right to vote
or to receive dividends. While the distribution of the
Rights will not be taxable to shareholders or to the
Company, shareholders may, depending upon the
circumstances, recognize taxable income in the event that
a Triggering Event shall occur.
Any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company
prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company in order
to cure any ambiguity, defect or inconsistency; to
shorten or lengthen any time period under the Rights
Agreement; or in any other respect that will not
adversely affect the interests of holders of Rights;
provided, however, that no amendment may be made at such
time as the Rights are not redeemable.
A copy of the Rights Agreement will be filed
with the Securities and Exchange Commission as an Exhibit
to a Registration Statement of the Company on Form 8-A.
A copy of the Rights Agreement is available free of
charge from the Company upon written request therefor.
This summary description of the Rights does not purport
to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated
herein by reference.
