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
WLR Foods, Inc.
(Exact name of registrant as specified in its charter
Virginia 54-1295923
(State of incorporation or organization (IRS Employer
Identification
No.)
P.O. Box 7000,
Broadway, Virginia 22815
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the
Act:
Title of each class Name of each exchange on
to be registered which each class is to be
registered
Stock Purchase Rights NASDAQ National Market System
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
<PAGE>
Exhibit Index is on Page 9
Item 1. Description of Registrant's Securities to be Registered.
On February 4, 1994, the Board of Directors of WLR Foods, Inc., a
Virginia corporation (the "Company"), declared a dividend payable
February 14, 1994 of one right (a "Right") for each outstanding share of
common stock, no par value ("Common Stock"), of the Company held of
record at the close of business on February 14, 1994 (the "Record
Time"), or issued thereafter and prior to the Separation Time (as here-
inafter defined) and thereafter pursuant to options and convertible
securities outstanding at the Separation Time. The Rights will be
issued pursuant to a Shareholder Protection Rights Agreement, dated as
of February 4, 1994 (the "Rights Agreement"), between the Company and
First Union National Bank of North Carolina, as Rights Agent (the
"Rights Agent"). Each Right entitles its registered holder to purchase
from the Company, after the Separation Time, one one-hundredth of a
share of Participating Preferred Stock, no par value ("Participating
Preferred Stock"), for $68 (the "Exercise Price"), subject to
adjustment.
The Rights will be evidenced by the Common Stock certificates until the
close of business on the earlier of (either, the "Separation Time")
(i) the tenth business day (or such later date as the Board of Directors
of the Company may from time to time fix by resolution adopted prior to
the Separation Time that would otherwise have occurred) after the date
on which any Person (as defined in the Rights Agreement) commences a
tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person, as defined below, and (ii) the
first date (the "Flip-in Date") of public announcement by the Company or
any Person that such Person has become an Acquiring Person, other than
as a result of a Flip-over Transaction or Event (as defined below);
provided that if the foregoing results in the Separation Time being
prior to the Record Time, the Separation Time shall be the Record Time;
and provided further that if a tender or exchange offer referred to in
clause (i) is cancelled, terminated or otherwise withdrawn prior to the
Separation Time without the purchase of any shares of stock pursuant
thereto, such offer shall be deemed never to have been made. An
Acquiring Person is any Person having Beneficial Ownership (as defined
in the Rights Agreement) of 15% or more of the outstanding shares of
Common Stock, which term shall not include (i) the Company, any wholly-
owned subsidiary of the Company or any employee stock ownership or other
employee benefit plan of the Company, (ii) any person who shall become
the Beneficial Owner of 15% or more of the outstanding Common Stock
solely as a result of an acquisition of Common Stock by the Company,
until such time as such Person acquires additional Common Stock, other
than through a dividend or stock split, (iii) any Person who becomes an
Acquiring Person without any plan or intent to seek or affect control of
the Company if such Person, upon notice by the Company, promptly divests
sufficient securities such that such 15% or greater Beneficial Ownership
ceases or (iv) any Person who Beneficially Owns shares of Common Stock
consisting solely of (A) shares acquired pursuant to the grant or
exercise of an option granted by the Company in connection with an
agreement to merge with, or acquire, the Company at a time at which
there is no Acquiring Person, (B) shares owned by such Person and its
Affiliates and Associates at the time of such grant and (C) shares,
amounting to less than 1% of the outstanding Common Stock, acquired by
Affiliates and Associates of such Person after the time of such grant.
The Rights Agreement provides that, until the Separation Time, the
Rights will be transferred with and only with the Common Stock. Common
Stock certificates issued after the Record Time but prior to the
Separation Time shall evidence one Right for each share of Common Stock
represented thereby and shall contain a legend incorporating by
reference the terms of the Rights Agreement (as such may be amended from
time to time). Notwithstanding the absence of the aforementioned
legend, certificates evidencing shares of Common Stock outstanding at
the Record Time shall also evidence one Right for each share of Common
Stock evidenced thereby. Promptly following the Separation Time,
<PAGE>
separate certificates evidencing the Rights ("Rights Certificates") will
be mailed to holders of record of Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as defined in
the Rights Agreement) following the Separation Time. The Rights will
expire on the earliest of (i) the Exchange Time (as defined below),
(ii) the close of business on February 14, 2004, (iii) the date on which
the Rights are redeemed as described below and (iv) upon the merger of
the Company into another corporation pursuant to an agreement entered
into when there is no Acquiring Person (in any such case, the "Expi-
ration Time").
The Exercise Price and the number of Rights outstanding, or in certain
circumstances the securities purchasable upon exercise of the Rights,
are subject to adjustment from time to time to prevent dilution in the
event of a Common Stock dividend on, or a subdivision or a combination
into a smaller number of shares of, Common Stock, or the issuance or
distribution of any securities or assets in respect of, in lieu of or in
exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date occurs,
the Company shall take such action as shall be necessary to ensure and
provide that each Right (other than Rights Beneficially Owned by the
Acquiring Person or any affiliate or associate thereof, which Rights
shall become void) shall constitute the right to purchase from the
Company, upon the exercise thereof in accordance with the terms of the
Rights Agreement, that number of shares of Common Stock or Participating
Preferred Stock of the Company having an aggregate Market Price (as
defined in the Rights Agreement), on the date of the public announcement
of an Acquiring Person's becoming such (the "Stock Acquisition Date")
that gave rise to the Flip-in Date, equal to twice the Exercise Price
for an amount in cash equal to the then current Exercise Price. In
addition, the Board of Directors of the Company may, at its option, at
any time after a Flip-in Date and prior to the time that an Acquiring
Person becomes the Beneficial Owner of more than 50% of the outstanding
shares of Common Stock, elect to exchange all (but not less than all)
the then outstanding Rights (other than Rights Beneficially Owned by the
Acquiring Person or any affiliate or associate thereof, which Rights
become void) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the
date of the Separation Time (the "Exchange Ratio"). Immediately upon
such action by the Board of Directors (the "Exchange Time"), the right
to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive a number of shares of Common Stock
equal to the Exchange Ratio.
Whenever the Company shall become obligated under the preceding
paragraph to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute therefor
shares of Participating Preferred Stock, at a ratio of one one-hundredth
of a share of Participating Preferred Stock for each share of Common
Stock so issuable.
In the event that prior to the Expiration Time the Company enters into,
consummates or permits to occur a transaction or series of transactions
after the time an Acquiring Person has become such in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate in
a binding share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time the Company
enters into an agreement with respect to such consolidation, merger or
share exchange, the Acquiring Person controls the Board of Directors of
the Company and any term of or arrangement concerning the treatment of
shares of capital stock in such merger, consolidation or share exchange
relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of Common Stock or (ii) the
<PAGE>
Company shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer) assets (A) aggregating
more than 50% of the assets (measured by either book value or fair
market value) or (B) generating more than 50% of the operating income or
cash flow, of the Company and its subsidiaries (taken as a whole) to any
other Person (other than the Company or one or more of its wholly owned
subsidiaries) or to two or more such Persons which are affiliated or
otherwise acting in concert, if, at the time of such sale or transfer of
assets or at the time the Company (or any such subsidiary) enters into
an agreement with respect to such sale or transfer, the Acquiring Person
controls the Board of Directors of the Company (a "Flip-over Transaction
or Event"), the Company shall take such action as shall be necessary to
ensure, and shall not enter into, consummate or permit to occur such
Flip-over Transaction or Event until it shall have entered into a
supplemental agreement with the Person engaging in such Flip-over
Transaction or Event or the parent corporation thereof (the "Flip-over
Entity"), for the benefit of the holders of the Rights, providing, that
upon consummation or occurrence of the Flip-over Transaction or Event
(i) each Right shall thereafter constitute the right to purchase from
the Flip-over Entity, upon exercise thereof in accordance with the terms
of the Rights Agreement, that number of shares of common stock of the
Flip-over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event equal
to twice the Exercise Price for an amount in cash equal to the then
current Exercise Price and (ii) the Flip-over Entity shall thereafter be
liable for, and shall assume, by virtue of such Flip-over Transaction or
Event and such supplemental agreement, all the obligations and duties of
the Company pursuant to the Rights Agreement. For purposes of the
foregoing description, the term "Acquiring Person" shall include any
Acquiring Person and its Affiliates and Associates counted together as
a single Person.
The Board of Directors of the Company may, at its option, at any time
prior to the Flip-in Date, redeem all (but not less than all) the then
outstanding Rights at a price of $0.01 per Right) (the "Redemption
Price"), as provided in the Rights Agreement. Immediately upon the
action of the Board of Directors of the Company electing to redeem the
Rights, without any further action and without any notice, the right to
exercise the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash for
each Right so held.
The holders of Rights will, solely by reason of their ownership of
Rights, have no rights as shareholders of the Company, including,
without limitation, the right to vote or to receive dividends.
The Rights will not prevent a takeover of the Company. However, the
Rights may cause substantial dilution to a person or group that acquires
15% or more of the Common Stock unless the Rights are first redeemed by
the Board of Directors of the Company. Nevertheless, the Rights should
not interfere with a transaction that is in the best interests of the
Company and its shareholders because the Rights can be redeemed on or
prior to the Flip-in Date, before the consummation of such transaction.
As of February 1, 1994 there were 10,967,193 shares of Common Stock
issued. As long as the Rights are attached to the Common Stock, the
Company will issue one Right with each new share of Common Stock so that
all such shares will have Rights attached. The Company's Board of
Directors has reserved for issuance upon exercise of the Rights 110,000
shares of Participating Preferred Stock.
The Rights Agreement (which includes as Exhibit A the forms of Rights
Certificate and Election to Exercise and as Exhibit B the form of
Certificate of Designation and Terms of the Participating Preferred
Stock) is attached hereto as an exhibit and is incorporated herein by
reference. The foregoing description of the Rights is qualified in its
entirety by reference to the Rights Agreement and such exhibits thereto.
<PAGE>
Item 2. Exhibits.
Exhibit No. Description
(1) Rights Agreement
(2) Forms of Rights Certificate and of Election to Exercise,
included in Exhibit A to the Rights Agreement.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
WLR FOODS, INC.
By: /s/ Delbert L. Seitz
Delbert L. Seitz, Chief
Financial Officer,
Secretary, Treasurer
Date: February 7, 1994
EXHIBIT INDEX
Exhibit No. Description
Sequentially
Numbered Page
(1) Shareholder Protection Rights Agreement,
dated as of February 4, 1994 (the "Rights
Agreement"), between WLR Foods, Inc. and
First Union National Bank of North Carolina,
as Rights Agent
(2) Forms of Rights Certificate and of
Election to Exercise, included in Exhibit A
to the Rights Agreement.
(3) Form of Certificate of Designation and
Terms of Participating Preferred Stock of
the Company, included in Exhibit B to the
Rights Agreement.
<PAGE>
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
February 4, 1994
between
WLR FOODS, INC.
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
as Rights Agent
<PAGE>
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
Article I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions 1
Article II
THE RIGHTS
Section 2.1 Summary of Rights 5
Section 2.2 Legend on Common Stock Certificates 5
Section 2.3 Exercise of Rights; Separation of Rights 5
Section 2.4 Adjustments to Exercise Price; Number of Rights 7
Section 2.5 Date on Which Exercise is Effective 7
Section 2.6 Execution, Authentication, Deliver
and Dating of Rights Certificates 8
Section 2.7 Registration, Registration of
Transfer and Exchange 8
Section 2.8 Mutilated, Destroyed, Lost and
Stolen Rights Certificates 9
Section 2.9 Persons Deemed Owners 9
Section 2.10 Delivery and Cancellation of Certificates 9
Section 2.11 Agreement of Rights Holders 10
Article III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Flip-in 10
Section 3.2 Flip-over 12
Article IV
THE RIGHTS AGENT
Section 4.1 General 12
Section 4.2 Merger of Consolidation or Change of
Names of Rights Agent 13
Section 4.3 Duties of Rights Agent 13
Section 4.4 Change of Rights Agent 15
Article V
MISCELLANEOUS
Section 5.1 Redemption 15
Section 5.2 Expiration 15
Section 5.3 Issuance of New Rights Certificate 16
Section 5.4 Supplements and Amendments 16
Section 5.5 Fractional Shares 16
Section 5.6 Rights of Action 16
Section 5.7 Holder of Rights Note Deemed a
Shareholder 17
Section 5.8 Notice of Proposed Actions 17
Section 5.9 Notices 17
Section 5.10 Suspension of Exercisability 18
Section 5.11 Costs of Enforcement 18
Section 5.12 Successors 18
Section 5.13 Benefits of this Agreement 18
Section 5.14 Determination and Actions by
the Board of Directors, etc. 18
Section 5.15 Descriptive Headings 18
<PAGE>
Section 5.16 Governing Law 18
Section 5.17 Counterparts 18
Section 5.18 Severability 19
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
Exhibit B Form of Certificate of
Designation and Terms of
Participating Preferred Stock
<PAGE>1
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time,
this "Agreement"), dated as of February 4, 1994, between WLR Foods,
Inc., a Virginia corporation (the "Company"), and First Union National
Bank of North Carolina, as Rights Agent (the "Rights Agent", which term
shall include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of
Common Stock (as hereinafter defined) held of record as of the close of
business on February 14, 1994 (the "Record Time") and (b) authorized the
issuance of one Right in respect of each share of Common Stock issued
after the Record Time and prior to the Separation Time (as hereinafter
defined) and, to the extent provided in Section 5.3, each share of
Common Stock issued after the Separation Time;
WHEREAS, subject to the terms hereof, each Right entitles the holder
thereof, after the Separation Time, to purchase securities of the
Company (or, in certain cases, of certain other entities) pursuant to
the terms and subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of
Rights Certificates (as hereinafter defined), the exercise of Rights and
other matters referred to herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
15% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include any Person
(i) who shall become the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock solely as a result of an acquisition
by the Company of shares of Common Stock, until such time thereafter as
such Person shall become the Beneficial Owner (other than by means of a
stock dividend or stock split) of any additional shares of Common Stock,
(ii) who is the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock but who acquired Beneficial Ownership of shares
of Common Stock without any plan or intention to seek or affect control
of the Company, if such Person promptly enters into an irrevocable
commitment promptly to divest, and thereafter promptly divests (without
exercising or retaining any power, including voting, with respect to
such shares), sufficient shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) so
that such Person ceases to be the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock or (iii) who Beneficially Owns shares
of Common Stock consisting solely of one or more of (A) shares of Common
Stock Beneficially Owned pursuant to the grant or exercise of an option
granted to such Person by the Company in connection with an agreement to
merge with, or acquire, the Company at a time at which there is no
Acquiring Person, (B) shares of Common Stock (or securities convertible
into, exchangeable into or exercisable for Common Stock), Beneficially
Owned by such Person or its Affiliates or Associates at the time of
<PAGE>2
grant of such option or (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock)
acquired by Affiliates or Associates of such Person after the time of
such grant which, in the aggregate, amount to less than 1% of the
outstanding shares of Common Stock. In addition, the Company, any
wholly-owned Subsidiary of the Company and any employee stock ownership
or other employee benefit plan of the Company or a wholly-owned
Subsidiary of the Company shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have "Beneficial
Ownership" of, and to "Beneficially Own", any securities as to which
such Person or any of such Person's Affiliates or Associates is or may
be deemed to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5
under the Securities Exchange Act, as such Rules are in effect on the
date of this Agreement as well as any securities as to which such Person
or any of such Person's Affiliates or Associates has the right to become
Beneficial Owner (whether such right is exercisable immediately or only
after the passage of time or the occurrence of conditions) pursuant to
any agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner", or to have "Beneficial
Ownership" of, or to "Beneficially Own", any security (i) solely because
such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates
until such tendered security is accepted for payment or exchange or
(ii) solely because such Person or any of such Person's Affiliates or
Associates has or shares the power to vote or direct the voting of such
security pursuant to a revocable proxy given in response to a public
proxy or consent solicitation made to more than ten holders of shares of
a class of stock of the Company registered under Section 12 of the
Securities Exchange Act of 1934 and pursuant to, and in accordance with,
the applicable rules and regulations under the Securities Exchange Act
of 1934, except if such power (or the arrangements relating thereto) is
then reportable under Item 6 of Schedule 13D under the Securities
Exchange Act of 1934 (or any similar provision of a comparable or
successor report). For purposes of this Agreement, in determining the
percentage of the outstanding shares of Common Stock with respect to
which a Person is the Beneficial Owner, all shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in The City of New York are generally
authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m. Eastern
Standard time on such date (or, if such date is not a Business Day, 5:00
p.m. Eastern Standard time on the next succeeding Business Day) at which
the office of the transfer agent for the Common Stock (or, after the
Separation Time, the office of the Rights Agent) are closed to the
public.
"Common Stock" shall mean the shares of Common Stock, no par value, of
the Company.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $68.00.
<PAGE>3
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, (iii) the close of business on the tenth-year
anniversary of the Record Time and (iv) upon the merger of the Company
into another corporation pursuant to an agreement entered into when
there is no Acquiring Person.
"Flip-in Date" shall mean any Stock Acquisition Date which is not the
result of a Flip-over Transaction or Event.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i) in the
case of a Flip-over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which shares
of Common Stock are being converted or exchanged and, if no such
securities are being issued, the other party to such Flip-over
Transaction or Event and (ii) in the case of a Flip-over Transaction or
Event referred to in clause (ii) of the definition thereof, the Person
receiving the greatest portion of the assets or earning power being
transferred in such Flip-over Transaction or Event, provided in all
cases if such Person is a subsidiary of a corporation, the parent
corporation shall be the Flip-Over Entity.
Flip-over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the
business and affairs) of the Flip-Over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions after the time when an Acquiring Person has become such in
which, directly or indirectly, (i) the Company shall consolidate or
merge or participate in a share exchange with any other Person if, at
the time of the consolidation, merger or share exchange or at the time
the Company enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring Person controls
the Board of Directors of the Company and any term of or arrangement
concerning the treatment of shares of capital stock in such
consolidation, merger or share exchange relating to the Acquiring Person
is not identical to the terms and arrangements relating to other holders
of the Common Stock or (ii) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 50% of the assets (measured by either
book value or fair market value) or (B) generating more than 50% of the
operating income or cash flow, of the Company and its Subsidiaries
(taken as a whole) to any Person (other than the Company or one or more
of its wholly owned Subsidiaries) or to two or more such Persons which
are Affiliates or Associates or otherwise acting in concert, if, at the
time of the entry by the Company (or any such Subsidiary) into an
agreement with respect to such sale or transfer of assets, the Acquiring
Person controls the Board of Directors of the Company. For purposes of
the foregoing description, the term "Acquiring Person" shall include any
Acquiring Person and its Affiliates and Associates counted together as
a single Person.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (deter-
mined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date;
provided, however, that if an event of a type analogous to any of the
events described in Section 2.4 hereof shall have caused the closing
prices used to determine the Market Price on any Trading Days during
such period of 20 Trading Days not to be fully comparable with the
closing price on such date, each such closing price so used shall be
appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any
securities on any date shall be the last reported sale price, regular
way, or, in case no such sale takes place or is quoted on such date, the
<PAGE>4
average of the closing bid and asked prices, regular way, for each share
of such securities, 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, Inc. or,
if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated trans-
action reporting system with respect to securities listed on the
principal national securities exchange on which the securities are
listed or admitted to trading or, if the securities are not listed or
admitted to trading on any national securities exchange, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation
System or such other system then in use, or, if on any such date the
securities are not listed or admitted to trading on any national
securities exchange or 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 securities selected by the Board of
Directors of the Company; provided, however, that if on any such date
the securities are not listed or admitted to trading on a national secu-
rities exchange or traded in the over-the-counter market, the closing
price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith
by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm, and set forth in a cer-
tificate delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange
Act of 1934, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
"Preferred Stock" shall mean the series of Participating Preferred
Stock, no par value, of the Company created by a Certificate of Desig-
nation and Terms in substantially the form set forth in Exhibit B hereto
appropriately completed.
"Redemption Price" shall mean an amount equal to one cent, $0.01.
"Redemption Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 5.1 hereof.
"Separation Time" shall mean the close of business on the earlier of
(i) the tenth business day (or such later date as the Board of Directors
of the Company may from time to time fix by resolution adopted prior to
the Separation Time that would otherwise have occurred) after the date
on which any Person commences a tender or exchange offer which, if
consummated, would result in such Person's becoming an Acquiring Person
and (ii) the Flip-in Date; provided, that if the foregoing results in
the Separation Time being prior to the Record Time, the Separation Time
shall be the Record Time and provided further, that if any tender or
exchange offer referred to in clause (i) of this paragraph is cancelled,
terminated or otherwise withdrawn prior to the Separation Time without
the purchase of any shares of Common Stock pursuant thereto, such offer
shall be deemed, for purposes of this paragraph, never to have been
made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has
become such.
"Subsidiary" of any specified Person shall mean any corporation or other
entity of which a majority of the voting power of the equity securities
or a majority of the equity interest is Beneficially Owned, directly or
indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall mean a
day on which the New York Stock Exchange, Inc. is open for the
<PAGE>5
transaction of business or, if such securities are not listed or
admitted to trading on the New York Stock Exchange, Inc., a day on which
the principal national securities exchange on which such securities are
listed or admitted to trading is open for the transaction of business
or, if such securities are not listed or admitted to trading on any
national securities exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time,
the Company will mail a letter summarizing the terms of the Rights to
each holder of record of Common Stock as of the Record Time, at such
holder's address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common
Stock issued after the Record Time but prior to the Separation Time
shall evidence one Right for each share of Common Stock represented
thereby and shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement, dated as of
February 4, 1994 (as such may be amended from time to time, the "Rights
Agreement"), between WLR Foods, Inc. (the "Company") and First Union
National Bank of North Carolina, as Rights Agent, the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may be exchanged for shares of Common Stock or other
securities or assets of the Company or a Subsidiary of the Company, may
expire, may become void (if they are "Beneficially Owned" by an
"Acquiring Person" or an Affiliate or Associate thereof, as such terms
are defined in the Rights Agreement, or by any transferee of any of the
foregoing) or may be evidenced by separate certificates and may no
longer be evidenced by this certificate. The Company will mail or
arrange for the mailing of a copy of the Rights Agreement to the holder
of this certificate without charge within five days after the receipt of
a written request therefor.
Certificates representing shares of Common Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share
of Common Stock evidenced thereby notwithstanding the absence of the
foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to Sections
3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each
Right will entitle the holder thereof, after the Separation Time and
prior to the Expiration Time, to purchase, for the Exercise Price, one
one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (together, in the case of certificates issued
prior to the Record Time, with the letter mailed to the record holder
thereof pursuant to Section 2.1) and will be transferable only together
with, and will be transferred by a transfer (whether with or without
such letter) of, such associated share.
(c) Subject to the terms hereof, after the Separation Time and prior to
the Expiration Time, the Rights (i) may be exercised and (ii) may be
transferred independent of shares of Common Stock. Promptly following
the Separation Time, the Rights Agent will mail to each holder of record
of Common Stock as of the Separation Time (other than any Person whose
Rights have become void pursuant to Section 3.1(b)), at such holder's
<PAGE>6
address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially
the form of Exhibit A hereto appropriately completed, representing the
number of Rights held by such holder at the Separation Time and having
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 law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from
time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Subject to the terms hereof, Rights may be exercised on any
Business Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent the Rights Certificate evidencing such
Rights with an Election to Exercise (an "Election to Exercise") substan-
tially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check
or money order payable to the order of the Company, of a sum equal to
the Exercise Price multiplied by the number of Rights being exercised
and a sum sufficient to cover any transfer tax or charge which may be
payable in respect of any transfer involved in the transfer or delivery
of Rights Certificates or the issuance or delivery of certificates for
shares or depositary receipts (or both) in a name other than that of the
holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d), and subject to
the terms hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent stock certificates evidencing such
number of shares or other securities to be purchased (the Company hereby
irrevocably authorizing its transfer agents to comply with all such
requisitions) and (B) if the Company elects pursuant to Section 5.5 not
to issue certificates representing fractional shares, requisition from
the depositary selected by the Company depositary receipts representing
the fractional shares to be purchased or requisition from the Company
the amount of cash to be paid in lieu of fractional shares in accordance
with Section 5.5 and (ii) after receipt of such certificates, depositary
receipts and/or cash, deliver the same to or upon the order of the
registered holder of such Rights Certificate, registered (in the case of
certificates or depositary receipts) in such name or names as may be
designated by such holder.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued
by the Rights Agent to such holder or to such holder's duly authorized
assigns.
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Exercise Price), be duly and
validly authorized, executed, issued and delivered and fully paid and
nonassessable; (ii) take all such action as may be necessary to comply
with any applicable requirements of the Securities Act of 1933 or the
Securities Exchange Act of 1934, and the rules and regulations
thereunder, and any other applicable law, rule or regulation, in
connection with the issuance of any shares upon exercise of Rights; and
(iii) pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued
upon the exercise of Rights, provided that the Company shall not be
required to pay any transfer tax or charge which may be payable in
<PAGE>7
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for shares in
a name other than that of the holder of the Rights being transferred or
exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event
the Company shall at any time after the Record Time and prior to the
Separation Time (i) declare or pay a dividend on Common Stock payable in
Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of
shares of Common Stock, (x) the Exercise Price in effect after such
adjustment will be equal to the Exercise Price in effect immediately
prior to such adjustment divided by the number of shares of Common Stock
(the "Expansion Factor") that a holder of one share of Common Stock
immediately prior to such dividend, subdivision or combination would
hold thereafter as a result thereof and (y) each Right held prior to
such adjustment will become that number of Rights equal to the Expansion
Factor, and the adjusted number of Rights will be deemed to be
distributed among the shares of Common Stock with respect to which the
original Rights were associated (if they remain outstanding) and the
shares issued in respect of such dividend, subdivision or combination,
so that each such share of Common Stock will have exactly one Right
associated with it. Each adjustment made pursuant to this paragraph
shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise
than in a transaction referred to in the preceding paragraph, each such
share of Common Stock so issued shall automatically have one new Right
associated with it, which Right shall be evidenced by the certificate
representing such share. To the extent provided in Section 5.3, Rights
shall be issued by the Company in respect of shares of Common Stock that
are issued or sold by the Company after the Separation Time.
(b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or
assets in respect of, in lieu of or in exchange for Common Stock (other
than pursuant to a regular periodic cash dividend or a dividend paid
solely in Common Stock) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a merger,
consolidation or share exchange), or otherwise, the Company shall make
such adjustments, if any, in the Exercise Price, number of Rights and/or
securities or other property purchasable upon exercise of Rights as the
Board of Directors of the Company, in its sole discretion, may deem to
be appropriate under the circumstances in order to adequately protect
the interests of the holders of Rights generally, and the Company and
the Rights Agent shall amend this Agreement as necessary to provide for
such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an
adjustment to the Exercise Price is made pursuant to this Section 2.4,
the Company shall (i) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such
adjustment, (ii) promptly file with the Rights Agent and with each
transfer agent for the Common Stock a copy of such certificate and
(iii) mail a brief summary thereof to each holder of Rights.
(d) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the securities
so purchasable which were expressed in the initial Rights Certificates
issued hereunder.
2.5 Date on Which Exercise is Effective. Each person in whose name any
<PAGE>8
certificate for shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercis-
ing holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the stock transfer books
of the Company are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the stock transfer
books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, President, Chief Executive
Officer, Chief Operating Officer, Vice Chairman of the Board, or
Executive Vice President, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Rights Certificates may be
manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature and
delivery of such Rights Certificates.
Promptly after the Company learns of the Separation Time, the Company
will notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for
countersignature, and, subject to Section 3.1(b), the Rights Agent shall
manually countersign and deliver such Rights Certificates to the holders
of the Rights pursuant to Section 2.3(c) hereof. No Rights Certificate
shall be valid for any purpose unless manually countersigned by the
Rights Agent.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After
the Separation Time, the Company will cause to be kept a register (the
"Rights Register") in which, subject to such reasonable regulations as
it may prescribe, the Company will provide for the registration and
transfer of Rights. The Rights Agent is hereby appointed "Rights
Registrar" for the purpose of maintaining the Rights Register for the
Company and registering Rights and transfers of Rights after the
Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the
right to examine the Rights Register at all reasonable times after the
Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certif-
icate, and subject to the provisions of Section 2.7(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver,
in the name of the holder or the designated transferee or transferees,
as required pursuant to the holder's instructions, one or more new
Rights Certificates evidencing the same aggregate number of Rights as
did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights issued
upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be
entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
<PAGE>9
(c) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights
Agent, as the case may be, duly executed by the holder thereof or such
holder's attorney duly authorized in writing. As a condition to the
issuance of any new Rights Certificate under this Section 2.7, the
Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto.
(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section
3.1(b), been exchanged under Section 3.1(c) or been redeemed or
terminated under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, then, subject to Sections 3.1(b) and 5.1,
the Company shall execute and the Rights Agent shall countersign and
deliver in exchange therefor a new Rights Certificate evidencing the
same number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such
security or indemnity as may be required by them to save each of them
and any of their agents harmless, then, subject to Sections 3.1(b) and
5.1 and in the absence of notice to the Company or the Rights Agent that
such Rights Certificate has been acquired by a bona fide purchaser, the
Company shall execute and upon its request the Rights Agent shall
countersign and deliver, in lieu of any such destroyed, lost or stolen
Rights Certificate, a new Rights Certificate evidencing the same number
of Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees
and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence
an original additional contractual obligation of the Company, whether or
not the destroyed, lost or stolen Rights Certificate shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights
duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) for registration of transfer, the Company, the Rights
Agent and any agent of the Company or the Rights Agent may deem and
treat the person in whose name such Rights Certificate (or, prior to the
Separation Time, such Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for all
purposes whatsoever, including the payment of the Redemption Price and
neither the Company nor the Rights Agent shall be affected by any notice
to the contrary. As used in this Agreement, unless the context
otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer
or exchange shall, if surrendered to any person other than the Rights
Agent, be delivered to the Rights Agent and, in any case, shall be
<PAGE>10
promptly cancelled by the Rights Agent. The Company may at any time
deliver to the Rights Agent for cancellation any Rights Certificates
previously countersigned and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Rights Certificates so
delivered shall be promptly cancelled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any
Rights Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent shall
destroy all cancelled Rights Certificates and deliver a certificate of
destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting
the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated
share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate) for registra-
tion of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name
the Rights Certificate (or, prior to the Separation Time, the associated
Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any notice
to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration Time a
Flip-in Date shall occur, the Company shall take such action as shall be
necessary to ensure and provide that, except as provided in this
Section 3.1, each Right shall constitute the right to purchase from the
Company, upon exercise thereof in accordance with the terms hereof (but
subject to Section 5.10), that number of shares of Common Stock having
an aggregate Market Price on the Stock Acquisition Date equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price
(such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of
the events described in Section 2.4(a) or (b) shall have occurred with
respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an
Acquiring Person or an Affiliate or Associate thereof or by any
transferee, direct or indirect, of any of the foregoing shall become
void and any holder of such Rights (including transferees) shall
thereafter have no right to exercise or transfer such Rights under any
provision of this Agreement. If any Rights Certificate is presented for
assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of
assignment or notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its Affiliates and
<PAGE>11
Associates (or former Beneficial Owners and their Affiliates and
Associates) as the Company shall reasonably request, then the Company
shall be entitled conclusively to deem the Beneficial Owner thereof to
be an Acquiring Person or an Affiliate or Associate thereof or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced thereby to be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Flip-in Date and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares
of Common Stock, elect to exchange all (but not less than all) the then
outstanding Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 3.1(b)) for shares of Common Stock
at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of holders of
Rights generally in the event that after the Separation Time an event of
a type analogous to any of the events described in Section 2.4(a) or (b)
shall have occurred with respect to the Common Stock (such exchange
ratio, as adjusted from time to time, being hereinafter referred to as
the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each
Right (other than Rights that have become void pursuant to Section
3.1(b)) will thereafter represent only the right to receive a number of
shares of Common Stock equal to the Exchange Ratio. Promptly after the
action of the Board of Directors electing to exchange the Rights, the
Company shall give notice thereof (specifying the steps to be taken to
receive shares of Common Stock in exchange for Rights) to the Rights
Agent and the holders of the Rights (other than Rights that have become
void pursuant to Section 3.1(b)) outstanding immediately prior thereto
by mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) shall for all
purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of any applicable taxes and other governmental
charges payable by the holder was made; provided, however, that if the
date of such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the stock
transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section 3.1(a) or
(c) to issue shares of Common Stock upon exercise of or in exchange for
Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-hundredth of a share of Preferred
Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock or Preferred Stock of the
Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Company shall either (i) call
a meeting of shareholders seeking approval to cause sufficient
additional shares to be authorized (provided that if such approval is
not obtained the Company will take the action specified in clause (ii)
of this sentence) or (ii) take such action as shall be necessary to
ensure and provide, to the extent permitted by applicable law and any
agreements or instruments in effect on the Stock Acquisition Date to
which it is a party, that each Right shall thereafter constitute the
right to receive, (x) at the Company's option, either (A) in return for
the Exercise Price, debt or equity securities or other assets (or a
<PAGE>12
combination thereof) having a fair value equal to twice the Exercise
Price, or (B) without payment of consideration (except as otherwise
required by applicable law), debt or equity securities or other assets
(or a combination thereof) having a fair value equal to the Exercise
Price, or (y) if the Board of Directors of the Company elects to
exchange the Rights in accordance with Section 3.1(c), debt or equity
securities or other assets (or a combination thereof) having a fair
value equal to the product of the Market Price of a share of Common
Stock on the Flip-in Date times the Exchange Ratio in effect on the
Flip-in Date, where in any case set forth in (x) or (y) above the fair
value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall
not enter into any agreement with an Acquiring Person (or any of its
Affiliates or Associates) with respect to, consummate or permit to occur
any Flip-over Transaction or Event unless and until it shall have
entered into a supplemental agreement with the Flip-over Entity, for the
benefit of the holders of the Rights, providing that, upon consummation
or occurrence of the Flip-over Transaction or Event (i) each Right shall
thereafter constitute the right to purchase from the Flip-over Entity,
upon exercise thereof in accordance with the terms hereof, that number
of shares of Flip-over Stock of the Flip-over Entity having an aggregate
Market Price on the date of consummation or occurrence of such Flip-over
Transaction or Event equal to twice the Exercise Price for an amount in
cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights
generally in the event that after such date of consummation or
occurrence an event of a type analogous to any of the events described
in Section 2.4(a) or (b) shall have occurred with respect to the Flip-
over Stock) and (ii) the Flip-over Entity shall thereafter be liable
for, and shall assume, by virtue of such Flip-over Transaction or Event
and such supplemental agreement, all the obligations and duties of the
Company pursuant to this Agreement. The provisions of this Section 3.2
shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit
to occur any Flip-over Transaction or Event if at the time thereof there
are any rights, warrants or securities outstanding or any other
arrangements, agreements or instruments that would eliminate or
otherwise diminish in any material respect the benefits intended to be
afforded by this Rights Agreement to the holders of Rights upon
consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent to act
as agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The
Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability.
<PAGE>13
(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 certificate for securities purchasable upon exercise of Rights,
Rights Certificate, certificate 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.
4.2 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 is a party, or any
corporation succeeding to the shareholder services business of the
Rights Agent or any successor Rights Agent, will be the successor to the
Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 4.4 hereof. In
case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name
of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates will 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 is 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.
4.3 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 will 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 deems it necessary or desirable that any fact or matter 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 a person
believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President and by the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate will 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.
<PAGE>14
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the
Rights Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and will be
deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any certifi-
cate for securities purchasable upon exercise of Rights or Rights
Certificate (except its countersignature thereof); nor will it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor will it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 3.1(b) hereof)
or any adjustment required under the provisions of Section 2.4, 3.1 or
3.2 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 after receipt of the certificate contemplated by Section 2.4
describing any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights or any
Rights or as to whether any securities purchasable upon exercise of
Rights will, when issued, be duly and validly authorized, executed,
issued and delivered and 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 per-
forming 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 any person believed by the Rights Agent to be the Chairman of the
Board, the President or any Vice President or the Secretary or any
Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such persons for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered by it in good faith in accordance with instructions of
any such person.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in Common Stock, 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 will not
be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
<PAGE>15
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or
such lesser notice as is acceptable to the Company) in writing mailed to
the Company and to each transfer agent of Common Stock by registered or
certified mail, and to the holders of the Rights in accordance with
Section 5.9. The Company may remove the Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders
of the Rights in accordance with Section 5.9. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the
Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
holder of any Rights (which holder shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then the
holder of any Rights 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 corpo-
ration organized and doing business under the laws of the United States
or of the State of New York or Virginia, in good standing, having its
principal office in the State of New York or Virginia, which is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or
examination by federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights Agent will
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 will file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common
Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4,
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.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company may, at its
option, at any time prior to the Flip-in Date, elect to redeem all (but
not less than all) the then outstanding Rights at the Redemption Price
and the Company, at its option, may pay the Redemption Price either in
cash or shares of Common Stock or other securities of the Company deemed
by the Board of Directors, in the exercise of its sole discretion, to be
at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the
Board of Directors electing to redeem the Rights states that the
redemption will not be effective until the occurrence of a specified
future time or event, upon the occurrence of such future time or event),
without any further action and without any notice, the right to exercise
the Rights will terminate and each Right will thereafter represent only
the right to receive the Redemption Price in cash or securities, as
determined by the Board of Directors. Promptly after the Rights are
redeemed, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such
notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the
<PAGE>16
Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights
are exchanged or redeemed, as provided in Section 3.1(c), 3.1(d),
3.1(e), 3.2 or 5.1 hereof.
5.3 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 number or kind or class of
shares of stock purchasable upon exercise of Rights made in accordance
with the provisions of this Agreement. In addition, in connection with
the issuance or sale of shares of Common Stock by the Company following
the Separation Time and prior to the Redemption Time or Expiration Time
pursuant to the terms of securities convertible or redeemable into
shares of Common Stock or to options, in each case issued or granted
prior to, and outstanding at, the Separation Time, the Company shall
issue to the holders of such shares of Common Stock, Rights Certificates
representing the appropriate number of Rights in connection with the
issuance or sale of such shares of Common Stock; provided, however, in
each case, (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 to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be
issued if, and to the extent that, appropriate adjustment shall have
otherwise been made in lieu of the issuance thereof, and (iii) the
Company shall have no obligation to distribute Rights Certificates to
any Acquiring Person or Affiliate or Associate of an Acquiring Person or
any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) prior to the Flip-in Date, in any
respect and (ii) after the close of business on the Flip-in Date, to
make any changes that the Company may deem necessary or desirable and
which shall not materially adversely affect the interests of the holders
of Rights generally or in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be inconsistent with
any other provisions herein or otherwise defective. The Rights Agent
will duly execute and deliver any supplement or amendment hereto
requested by the Company which satisfies the terms of the preceding
sentence.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise or redemption of Rights,
the Company shall, in lieu thereof, in the sole discretion of the Board
of Directors, either (a) evidence such fractional shares by depositary
receipts issued pursuant to an appropriate agreement between the Company
and a depositary selected by it, providing that each holder of a
depositary receipt shall have all of the rights, privileges and pre-
ferences to which such holder would be entitled as a beneficial owner of
such fractional share, or (b) sell such shares on behalf of the holders
of Right and pay to the registered holder of such Rights the appropriate
fraction of price per share received upon such sale.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Section 3.1(b)), rights of action in respect of this Agree-
ment, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any
other Rights, may, on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights, enforce, and may
institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, such holder's right
to exercise such holder's Rights in the manner provided in such holder's
<PAGE>17
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 will be
entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the
obligations of any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of shares or any other securities which may at
any time be issuable on the exercise of such Rights, nor shall anything
contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders
(except as provided in Section 5.8 hereof), or to receive dividends or
subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose
after the Separation Time and prior to the Expiration Time (i) to effect
or permit (in cases where the Company's permission is required)
occurrence of any Flip-in Date or Flip-over Transaction or Event or
(ii) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each holder
of a Right, in accordance with Section 5.9 hereof, a notice of such
proposed action, which shall specify the Flip-in Date or the date on
which such Flip-over Transaction or Event, liquidation, dissolution, or
winding up is to take place, and such notice shall be so given at least
20 Business Days prior to the date of the taking of such proposed
action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of
any Rights to or on the Company shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
WLR Foods, Inc.
P.O. Box 7000
Broadway, VA 22815
Attention: Delbert L. Seitz
Any notice or demand authorized or required by this Agreement to be
given or made by the Company or by the holder of any Rights to or on the
Rights Agent shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
First Union National Bank of North Carolina
Two First Union Center
Charlotte, North Carolina 28288-1154
Attention: Ed L. Hartgrove
Notices or demands authorized or required by this Agreement to be given
or made by the Company or the Rights Agent to or on the holder of any
Rights shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed to such holder at the
address of such holder as it appears upon the registry books of the
Rights Agent or, prior to the Separation Time, on the registry books of
the transfer agent for the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the
<PAGE>18
holder receives the notice.
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant
to Section 3.1(a), (b), (d) or (e) or to comply with federal or state
securities laws, the Company may suspend the exercisability of the
Rights for a period of up to ninety (90) days following the date of the
occurrence of the Separation Time or the Flip-in Date in order to take
such action or comply with such laws. In the event of any such
suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability or exchangeability of the
Rights has been temporarily suspended. Notice thereof pursuant to
Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise
of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of
any Rights for the costs and expenses (including legal fees) incurred by
such holder in actions to enforce such holder's rights pursuant to any
Rights or this Agreement.
5.12 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.
5.13 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 holders of the Rights 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 holders of
the Rights.
5.14 Determination and Actions by the Board of Directors, etc. The
Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement. All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company to any liability to the
holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
VIRGINIA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE
MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE.
5.17 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
<PAGE>19
constitute but one and the same instrument.
5.18 Severability. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the
remaining terms and provisions hereof or the application of such term or
provision to circumstances other than those as to which it is held
invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
WLR FOODS, INC.
By: /s/ James L. Keeler
Name: James L. Keeler
Title: President and CEO
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA
By: /s/ Ed L. Hartgrove
Name: Ed L. Hartgrove
Title: Vice President
<PAGE>
EXHIBIT A
[Form of Rights Certificate]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR
ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
WLR FOODS, INC.
This certifies that ____________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions
and conditions of the Shareholder Protection Rights Agreement, dated as
of February 4, 1994 (as amended from time to time, the "Rights
Agreement"), between WLR Foods, Inc., a Virginia corporation (the
"Company"), and First Union National Bank, as Rights Agent (the "Rights
Agent", which term shall include any successor Rights Agent under the
Rights Agreement), to purchase from the Company at any time after the
Separation Time (as such term is defined in the Rights Agreement) and
prior to the close of business on February 14, 2004, one one-hundredth
of a fully paid share of Participating Preferred Stock, no par value
(the "Preferred Stock"), of the Company (subject to adjustment as
provided in the Rights Agreement) at the Exercise Price referred to
below, upon presentation and surrender of this Rights Certificate with
the Form of Election to Exercise duly executed at the principal office
of the Rights Agent in Charlotte, North Carolina. The Exercise Price
shall initially be $68.00 per Right and shall be subject to adjustment
in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets
of the Company other than Preferred Stock, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties
and immunities hereunder of the Rights Agent, the Company and the
holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available without
cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates
<PAGE>
of like tenor evidencing an aggregate number of Rights equal to the
aggregate number of Rights evidenced by the Rights Certificate or Rights
Certificates surrendered. If this Rights Certificate shall be exercised
in part, the registered 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, each Right evidenced
by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right
or (b) exchanged by the Company under certain circumstances, at its
option, for one share of Common Stock or one one-hundredth of a share of
Preferred Stock per Right (or, in certain cases, other securities or
assets of the Company), subject in each case to adjustment in certain
events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of any
securities 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 Rights evidenced by this
Rights Certificate shall have been exercised or exchanged 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.
Date:________________
ATTEST: WLR FOODS, INC.
_______________________________
Secretary By__________________
Name:
Title:
Countersigned:
FIRST UNION NATIONAL BANK
By____________________________
Authorized Signature
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ______________________________________ hereby sells,
assigns and transfers unto
____________________________________________________________________
Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_______________ Attorney, to transfer the within Rights Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _______________, 19__
Signature Guaranteed:
_________________________________________
Signature
Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
<PAGE>
- ------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned,
have never been, Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
___________________________
Signature
- ------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights
Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) or a transferee of any of
the foregoing and accordingly will deem the Rights evidenced by such
Rights Certificate to be void and not transferable or exercisable.
<PAGE>
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: WLR FOODS, INC.
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Participating Preferred Stock
issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
___________________________________
Address:
___________________________________
Social Security or Other Taxpayer
Identification 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:
___________________________________
Address:
___________________________________
Social Security or Other Taxpayer
Identification Number:
Dated: _______________, 19__
Signature Guaranteed:
__________________________________________
Signature
(Signature must correspond to name as
written upon the face of the attached
Rights Certificate in every
particular, without alteration
or enlargement or any change
whatsoever)
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
- ------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by the
attached Rights Certificate are not, and, to the knowledge of the
undersigned, have never been, Beneficially Owned by an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
____________________________________
Signature
<PAGE>
- ------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights
Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) or a transferee of any of
the foregoing and accordingly will deem the Rights evidenced by such
Rights Certificate to be void and not transferable or exercisable.
<PAGE>
EXHIBIT B
FORM OF CERTIFICATE OF DESIGNATION AND TERMS
OF PARTICIPATING PREFERRED STOCK OF WLR FOODS, INC.
Pursuant to Section 13.1-639 of the Stock
Corporation Act of the State of Virginia
We, the undersigned, [Authorized Officer] and [Authorized Officer], the
__________________, and ______________, respectively, of WLR Foods,
Inc., a Virginia corporation (the "Corporation"), do hereby certify as
follows:
Pursuant to authority granted by Article TWO of the Articles of
Restatement of the Corporation, and in accordance with the provisions of
Section 13.1-639 of the Stock Corporation Act of the State of Virginia,
the Board of Directors of the Corporation has adopted the following
resolutions fixing the designation and certain terms, powers, prefer-
ences and other rights of a new series of the Corporation's Preferred
Stock, no par value, and certain qualifications, limitations and
restrictions thereon:
RESOLVED, that there is hereby established a series of Preferred Stock,
no par value, of the Corporation, and the designation and certain terms,
powers, preferences and other rights of the shares of such series, and
certain qualifications, limitations and restrictions thereon, are hereby
fixed as follows:
(i) The distinctive serial designation of this series shall be
"Participating Preferred Stock" (hereinafter called "this Series").
Each share of this Series shall be identical in all respects with the
other shares of this Series except as to the dates from and after which
dividends thereon shall be cumulative.
(ii) The number of shares in this Series shall initially be 110,000,
which number may from time to time be increased or decreased (but not
below the number then outstanding) by the Board of Directors. Shares of
this Series purchased by the Corporation shall be cancelled and shall
revert to authorized but unissued shares of Preferred Stock undesignated
as to series. Shares of this Series may be issued in fractional shares,
which fractional shares shall entitle the holder, in proportion to such
holder's fractional share, to all rights of a holder of a whole share of
this Series.
(iii) The holders of full or fractional shares of this Series shall be
entitled to receive, when and as declared by the Board of Directors, but
only out of funds legally available therefor, dividends, (A) on each
date that dividends or other distributions (other than dividends or dis-
tributions payable in Common Stock of the Corporation) are payable on or
in respect of Common Stock comprising part of the Reference Package (as
defined below), in an amount per whole share of this Series equal to the
aggregate amount of dividends or other distributions (other than divi-
dends or distributions payable in Common Stock of the Corporation) that
would be payable on such date to a holder of the Reference Package and
(B) on the last day of March, June, September and December in each year,
in an amount per whole share of this Series equal to the excess (if any)
of $17.00 over the aggregate dividends paid per whole share of this
Series during the three month period ending on such last day. Each such
<PAGE>
dividend shall be paid to the holders of record of shares of this Series
on the date, not exceeding seventy days preceding such dividend or
distribution payment date, fixed for the purpose by the Board of
Directors in advance of payment of each particular dividend or
distribution. Dividends on each full and each fractional share of this
Series shall be cumulative from the date such full or fractional share
is originally issued; provided that any such full or fractional share
originally issued after a dividend record date and on or prior to the
dividend payment date to which such record date relates shall not be
entitled to receive the dividend payable on such dividend payment date
or any amount in respect of the period from such original issuance to
such dividend payment date.
Thee term "Reference Package" shall initially mean 100 shares of Common
Stock, no par value ("Common Stock"), of the Corporation. In the event
the Corporation shall at any time after the close of business on
________, 19__ <F1> (A) declare or pay a dividend on any Common Stock
payable in Common Stock, (B) subdivide any Common Stock or (C) combine
any Common Stock into a smaller number of shares, then and in each such
case the Reference Package after such event shall be the Common Stock
that a holder of the Reference Package immediately prior to such event
would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of full cumulative
dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no dividend (other
than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made
upon the Common Stock or upon any other stock ranking junior to this
Series as to dividends or upon liquidation, nor shall any Common Stock
nor any other stock of the Corporation ranking junior to or on a parity
with this Series as to dividends or upon liquidation be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be
paid to or made available for a sinking fund for the redemption of any
shares of any such stock) by the Corporation (except by conversion into
or exchange for stock of the Corporation ranking junior to this Series
as to dividends and upon liquidation), unless, in each case, the full
cumulative dividends (including the dividend to be due upon payment of
such dividend, distribution, redemption, purchase or other acquisition)
on all outstanding shares of this Series shall have been, or shall
contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification or
other transaction in which the shares of Common Stock are exchanged for
or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of this Series shall at the
same time be similarly exchanged or changed in an amount per whole share
equal to the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, that a holder of
the Reference Package would be entitled to receive as a result of such
transaction.
(v) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the
holders of full and fractional shares of this Series shall be entitled,
before any distribution or payment is made on any date to the holders of
the Common Stock or any other stock of the Corporation ranking junior to
this Series upon liquidation, to be paid in full an amount per whole
share of this Series equal to the greater of (A) $__________<F2> or
(B) the aggregate amount distributed or to be distributed prior to such
date in connection with such liquidation, dissolution or winding up to
a holder of the Reference Package (such greater amount being hereinafter
referred to as the "Liquidation Preference"), together with accrued
[FN]
<F1> For a certificate of designation relating to shares to be issued pursuant
to Section 2.3 of the Rights Agreement, insert the Separation Time. For a
certificate of designation relating to shares to be issued pursuant to
Section 3.1(d) of the Rights Agreement, insert the Flip-in Date.
<F2> Insert an amount equal to 100 times the Exercise Price in effect as of
the Separation Time.
<PAGE>
dividends to such distribution or payment date, whether or not earned or
declared. If such payment shall have been made in full to all holders
of shares of this Series, the holders of shares of this Series as such
shall have no right or claim to any of the remaining assets of the
Corporation.
In the event the assets of the Corporation available for distribution to
the holders of shares of this Series upon any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders
are entitled pursuant to the first paragraph of this Section (v), no
such distribution shall be made on account of any shares of any other
class or series of Preferred Stock ranking on a parity with the shares
of this Series upon such liquidation, dissolution or winding up unless
proportionate distributive amounts shall be paid on account of the
shares of this Series, ratably in proportion to the full distributable
amounts for which holders of all such parity shares are respectively
entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation, the
holders of shares of this Series then outstanding shall be entitled to
be paid out of assets of the Corporation available for distribution to
its shareholders all amounts to which such holders are entitled pursuant
to the first paragraph of this Section (v) before any payment shall be
made to the holders of Common Stock or any other stock of the
Corporation ranking junior upon liquidation to this Series.
For the purposes of this Section (v), the consolidation or merger of, or
binding share exchange by, the Corporation with any other corporation
shall not be deemed to constitute a liquidation, dissolution or winding
up of the Corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of shareholders required
by law or by the Articles of Restatement, as amended, of the
Corporation, each whole share of this Series shall, on any matter, vote
as a class with any other capital stock comprising part of the Reference
Package and voting on such matter and shall have the number of votes
thereon that a holder of the Reference Package would have.
IN WITNESS WHEREOF, the undersigned have signed and attested this
certificate on the ____ day of _________, 1994.
_________________________________
Attest:
_________________________
<PAGE>
