SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 13, 1998
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Ben & Jerry's Homemade, Inc.
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(Exact name of registrant as specified in its charter)
Vermont 0-13544 03-0267543
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
30 Community Drive, South Burlington, Vermont 05403-6828
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (802) 651-9600
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On July 30, 1998 the Board of Directors of Ben & Jerry's Homemade, Inc.
(the "Company") declared (subject to certain conditions which were satisfied on
or before August 13, 1998) a dividend of one right (the "Class A Right") to
purchase one share of Class A Common Stock, par value $.033 per share, of the
Company (the "Class A Common Stock") for each outstanding share of Class A
Common Stock, payable on August 14, 1998 to Class A stockholders of record at
the close of business on such date. The terms of the Class A Rights are set
forth in the Class A Rights Agreement dated as of July 30, 1998 between the
Company and American Stock Transfer Trust Company, as Rights Agent, a copy of
which is filed herewith as an exhibit and incorporated herein by reference.
In addition, on July 30, 1998 the Board of Directors of the Company
declared (subject to certain conditions which were satisfied on or before August
13, 1998) a dividend of one right (the "Class B Right") to purchase one share of
Class B Common Stock, par value $.033 per share, of the Company (the "Class B
Common Stock") for each outstanding share of Class B Common Stock, payable on
August 14, 1998 to Class B stockholders of record at the close of business on
such date. The terms of the Class B Rights are set forth in the Class B Rights
Agreement dated as of July 30, 1998 between the Company and American Stock
Transfer Trust Company, as Rights Agent, a copy of which is filed herewith as an
exhibit and incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits:
1. Class A Rights Agreement dated as of July 30, 1998 ("Class A
Rights Agreement") between the Company and American Stock
Transfer Trust Company, as Rights Agent.
2. Form of Class A Rights Certificate (attached as Exhibit A to the
Class A Rights Agreement). Pursuant to the Class A Rights
Agreement, printed Class A Rights Certificates will not be mailed
until the Distribution Date (as defined in the Class A Rights
Agreement).
3. Summary of Class A Rights (attached as Exhibit B to the Class A
Rights Agreement).
4. Class B Rights Agreement dated as of July 30, 1998 ("Class B
Rights Agreement") between the Company and American Stock
Transfer Trust Company, as Rights Agent.
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5. Form of Class B Rights Certificate (attached as Exhibit B to the
Class B Rights Agreement). Pursuant to the Class B Rights
Agreement, printed Class B Rights Certificates will not be mailed
until the Distribution Date (as defined in the Class B Rights
Agreement).
6. Summary of Class B Rights (attached as Exhibit B to the Class B
Rights Agreement).
7. Press Release dated August 13, 1998.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BEN & JERRY'S HOMEMADE, INC.
Date: August 13, 1998 By: /s/ Perry D. Odak
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Name: Perry D. Odak
Title: President and Chief Executive
Officer
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EXHIBIT INDEX
The following designated exhibits are filed herewith:
1. Class A Rights Agreement dated as of July 30, 1998 ("Class A Rights
Agreement") between the Company and American Stock Transfer Trust Company
as Rights Agent.
2. Form of Class A Rights Certificate (attached as Exhibit A to the Class A
Rights Agreement). Pursuant to the Class A Rights Agreement, printed Class
A Rights Certificates will not be mailed until the Distribution Date (as
defined in the Class A Rights Agreement).
3. Summary of Class A Rights (attached as Exhibit B to the Class A Rights
Agreement).
4. Class B Rights Agreement dated as of July 30, 1998 ("Class B Rights
Agreement") between the Company and American Stock Transfer Trust Company,
as Rights Agent.
5. Form of Class B Rights Certificate (attached as Exhibit B to the Class B
Rights Agreement). Pursuant to the Class B Rights Agreement, printed Class
B Rights Certificates will not be mailed until the Distribution Date (as
defined in the Class B Rights Agreement).
6. Summary of Class B Rights (attached as Exhibit B to the Class B Rights
Agreement).
7. Press Release dated August 13, 1998.
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BEN & JERRY'S HOMEMADE, INC.
and
AMERICAN STOCK TRANSFER TRUST COMPANY
as Rights Agent
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Class A Rights Agreement
Dated as of July 30, 1998
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Table of Contents
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Section 1. Certain Definitions..............................................................1
Section 2. Appointment of Rights Agent......................................................6
Section 3. Issuance of Class A Rights Certificates..........................................7
Section 4. Form of Class A Rights Certificates..............................................8
Section 5. Countersignature and Registration................................................9
Section 6. Transfer, Split Up, Combination and Exchange of Class A Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Class A Rights Certificates..........10
Section 7. Exercise of Class A Rights; Purchase Price; Expiration Date of Class A Rights...11
Section 8. Cancellation and Destruction of Class A Rights Certificates.....................13
Section 9. Reservation and Availability of Shares of Class A Common Stock; Other
Covenants....................................................................13
Section 10. Class A Common Stock Record Date; Etc..........................................15
Section 11. Antidilution Adjustments.......................................................15
Section 12. Certificate of Adjustments.....................................................24
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........25
Section 14. Fractional Class A Rights and Fractional Shares................................27
Section 15. Rights of Action...............................................................27
Section 16. Agreement of Class A Rights Holders............................................28
Section 17. Class A Rights Certificate Holder Not Deemed a Stockholder.....................29
Section 18. Concerning the Rights Agent....................................................29
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................29
</TABLE>
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<TABLE>
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Section 20. Duties of Rights Agent.........................................................30
Section 21. Change of Rights Agent.........................................................32
Section 22. Issuance of New Class A Rights Certificates....................................33
Section 23. Redemption and Termination.....................................................34
Section 24. Exchange.......................................................................35
Section 25. Notice of Proposed Actions.....................................................36
Section 26. Notices........................................................................37
Section 27. Supplements and Amendments.....................................................38
Section 28. Successors.....................................................................38
Section 29. Determinations and Actions by the Board; etc...................................38
Section 30. Benefits of this Agreement.....................................................39
Section 31. Severability...................................................................39
Section 32. Governing Law..................................................................39
Section 33. Counterparts...................................................................39
Section 34. Descriptive Headings...........................................................39
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CLASS A RIGHTS AGREEMENT
This Class A Rights Agreement (the "Agreement") dated as of July 30,
1998 is between Ben & Jerry's Homemade, Inc., a Vermont corporation (the
"Company") and American Stock Transfer Trust Company, as rights agent (the
"Rights Agent").
W I T N E S S E T H:
WHEREAS, on July 30, 1998 the Board of Directors of the Company (the
"Board") authorized the issuance of rights (collectively, the "Class A Rights,"
and individually a "Class A Right"), each Class A Right being a right to
purchase, on the terms and subject to the provisions of this Agreement, one
share of the Company's Class A Common Stock; and
WHEREAS, on July 30, 1998 (the "Declaration Date") the Board (a)
authorized and declared a dividend distribution of one Class A Right for every
share of Class A Common Stock of the Company outstanding at the Close of
Business on August 14, 1998 (the "Dividend Record Date"), and (b) authorized the
issuance of, and agreed to issue, one Class A Right (as such number may be
adjusted in accordance with Section 11(i) or 11(p) hereof) for every share of
Class A Common Stock of the Company issued between the Dividend Record Date and
the Distribution Date (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, (iv) any Person organized,
appointed, or established by the Company or a Subsidiary of the Company pursuant
to the terms of any plan described in clause (iii) above or (v) any such Person
who has reported or is required to report such ownership on Schedule 13G under
the Exchange Act (or any comparable or successor report) or on Schedule 13D
under the Exchange Act (or any comparable or successor report) which Schedule
13D does not state any intention to or reserve the right to control or influence
the management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the Common
Stock) and, within 10 Business Days of being requested by the Company to advise
it regarding the same, certifies to the Company that such Person acquired shares
of Common Stock in excess of 14.9% inadvertently or without knowledge of the
terms
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of the Class A Rights and who, together with all of such Person's Affiliates,
thereafter does not acquire additional shares of Common Stock while the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding,
provided, however, that if the Person requested to so certify fails to do so
within 10 Business Days, then such Person shall become an Acquiring Person
immediately after such 10 Business Day Period.
(b) "Act" shall mean the Securities Act of 1933 (or any successor act),
as amended and as may from time to time be in effect.
(c) "Affiliate," with respect to any Person, shall mean any other Person
who is, or who would be deemed to be, an "affiliate" or an "associate" of such
Person within the respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as such Rule is in
effect on the Declaration Date; provided, that no Person shall be deemed an
affiliate of another Person solely as a result of such Persons' status as
directors of the Company.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own" or have "Beneficial Ownership" of, any securities:
(i) which such Person or any of such Person's Affiliates has
"beneficial ownership" of within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, as such Rule is in
effect on the Declaration Date;
(ii) which such Person or any of such Person's Affiliates has,
directly or indirectly, the right to acquire (whether such right is
exercisable immediately or after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion, exchange or other rights, warrants or
options, or otherwise;
(iii) which such Person or any of such Person's Affiliates has,
directly or indirectly, the right to vote or dispose of, including
pursuant to any agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security for
purposes of this Section 1(d)(iii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable proxy solicitation
rules and regulations promulgated under the Exchange Act or (B) is made
in connection with, or is to otherwise participate in, a proxy or
consent solicitation made, or to be made, pursuant to, and in accordance
with, the applicable proxy solicitation rules and regulations
promulgated under the Exchange Act, in either case described in clause
(A) or (B) above, whether or not such agreement, arrangement
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or understanding is also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iv) which are beneficially owned, directly or indirectly, by any
other Person or any Affiliate thereof with which such Person or any of
such Person's Affiliates has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or in connection with a
proxy or consent solicitation described in clause (A) or (B) of the
proviso to Section 1(d)(iii) hereof) or disposing of any securities of
the Company;
provided, however, that for purposes of this Section 1(d) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates until such tendered securities are accepted for
purchase or exchange, (B) securities issuable upon exercise of Class A Rights at
any time prior to the occurrence of a Common Stock Event, or (C) securities
issuable upon exercise of Class A Rights which were held by a Person or its
Affiliates prior to the Distribution Date as long as such Person is not
responsible for the occurrence of the Common Stock Event giving rise to the
Distribution Date; and provided, further, however, that nothing in this Section
1(d) shall cause a Person engaged in business as an underwriter of securities to
be the "Beneficial Owner" of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such acquisition.
(e) "Board" shall have the meaning set forth in the preamble to this
Agreement.
(f) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Vermont or the city in which
the principal office of the Rights Agent is located are authorized or obligated
by law or executive order to close.
(g) "Class A Common Stock" shall mean the Class A Common Stock, par
value $.033 per share, of the Company.
(h) "Class A Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(i) "Class A Rights" shall have the meaning set forth in the preamble to
this Agreement.
(j) "Class A Rights Certificates" shall have the meaning set forth in
Section 3(a) hereof.
(k) "Class B Common Stock" shall mean the Class B Common Stock, par
value $.033 per share, of the Company.
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(l) "Class B Rights Agreement" shall mean the Class B Rights Agreement
dated as of July 30, 1998 between the Company and American Stock Transfer Trust
Company, as Rights Agent.
(m) "Close of Business" on any given date shall mean 5:00 p.m.,
Burlington, Vermont time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 p.m., Burlington, Vermont time, on the
next succeeding Business Day.
(n) "Closing Price" shall have the meaning set forth in Section 11(d)
hereof.
(o) "Common Stock" shall mean collectively, the Class A Common Stock and
the Class B Common Stock of the Company, except that "Common Stock" when used
with respect to any Person other than the Company shall mean either (i) the
common stock (or other capital stock or shares of beneficial interest) of such
Person with the greatest voting power, or (ii) the equity securities or other
equity interests having power to control or direct the management and affairs of
such Person, or (iii) if such Person is a Subsidiary of another Person, the
Person (A) who ultimately controls such Person that is the Subsidiary and (B)
which has outstanding such common stock (or such other capital stock, equity
securities or interests).
(p) "Common Stock Event" shall mean the occurrence of any event
described in (i) Section 11(a)(ii) hereof or (ii) clause (a), (b) or (c) of the
first sentence of Section 13 hereof.
(q) "Company" shall have the meaning set forth in the preamble to this
Agreement.
(r) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(s) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(t) "Declaration Date" shall have the meaning set forth in the preamble
to this Agreement.
(u) "Directors" shall mean the members of the Board.
(v) "Disqualified Transferee" shall mean any Person who is a direct or
indirect transferee of any Class A Right from an Acquiring Person or an
Affiliate of an Acquiring Person and became such a transferee (x) after the
occurrence of a Common Stock Event or (y) prior to or concurrently with the
Acquiring Person becoming such and received such Class A Right pursuant to a
transfer (whether or not for value) (A) from the Acquiring Person to holders of
its Common Stock or other equity securities or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement, or understanding
(whether or not in writing) regarding the transferred Class A Right, or (B)
which a majority of the Board then in office reasonably determines is part of a
plan, arrangement, or understanding (whether
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or not in writing) which has as a primary purpose or effect, the avoidance of
Section 7(e) hereof.
(w) "Distribution Date" shall mean the date which is the later of (A)
the earlier of (x) the 10th Business Day following the Stock Acquisition Date or
(y) the 10th Business Day following the Offer Commencement Date or (B) such
specified or unspecified date thereafter which is on or after the Dividend
Record Date, as may be determined by a majority of the Board then in office.
(x) "Dividend Record Date" shall have the meaning set forth in the
preamble to this Agreement.
(y) "Excess Amount" shall have the meaning set forth in Section
11(a)(iii) hereof.
(z) "Exchange Act" shall mean the Securities Exchange Act of 1934 (or
any successor act), as in effect on the Declaration Date.
(aa) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(bb) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(cc) "Offer Commencement Date" shall mean the date of the commencement
by any Person, other than (i) the Company, (ii) a Subsidiary of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the
Company or (iv) any Person organized, appointed, or established by the Company
or such Subsidiary pursuant to the terms of any such plan, of a tender or
exchange offer (including when such offer is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and Regulations under
the Exchange Act) if upon consummation thereof the Person and Affiliates thereof
would be the Beneficial Owner of 15% or more of the then outstanding shares of
Common Stock (including any such date which is after the date of this Agreement
and prior to the issuance of the Class A Rights on the Dividend Record Date or
thereafter).
(dd) "Officers' Certificate" has the meaning set forth in Section 20(b)
hereof.
(ee) "Other Consideration" has the meaning set forth in Section 6(a)
hereof.
(ff) "Permitted Transferee" shall have the meaning set forth in
paragraph 4 of Section A of the Company's Articles of Incorporation.
(gg) "Person" shall mean a corporation, association, partnership, joint
venture, trust, limited liability company, estate, organization, business,
entity or individual.
(hh) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.
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(ii) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(jj) "Rights" shall have the meaning set forth in the preamble to this
Agreement.
(kk) "Rights Agent" shall have the meaning set forth in the preamble to
this Agreement subject to the appointment of a successor Rights Agent pursuant
to Section 21 hereof.
(ll) "Stock Acquisition Date" shall mean the later of (i) the date of
the first public announcement by an Acquiring Person or the Company that an
Acquiring Person has become such (including the first date on which any filing
with any governmental authority disclosing that an Acquiring Person has become
such becomes available to the public), or (ii) the date on which an executive
officer of the Company has actual knowledge that an Acquiring Person has become
such.
(mm) "Subsidiary" shall mean, as of any date, any Person of which the
Company (or other specified parent) owns directly, or indirectly through a
Subsidiary or Subsidiaries, at least a majority of the outstanding capital stock
(or other shares of beneficial interest) entitled to vote generally, or holds
directly, or indirectly through a Subsidiary or Subsidiaries, at least a
majority of partnership or similar interests, or is a general partner or of
which the Company (or other specified parent) owns voting securities sufficient
to elect at least a majority of the directors of such Person.
(nn) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(oo) "Summary of Class A Rights" shall have the meaning set forth in
Section 3(b) hereof.
(pp) "Trading Day" shall mean a day on which the principal national
securities exchange on which such security is listed or admitted to trading is
open for the transaction of business or, if such security is not listed or
admitted to trading on any national securities exchange, a day which is a
Business Day.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Class A Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of the Class A
Common Stock) in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time, upon
prior written notice to the Rights Agent, appoint such Co-Rights Agents as it
may deem necessary or desirable and the respective duties of the Rights Agent
and the Co-Rights Agent shall be as the Company shall determine.
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Section 3. Issuance of Class A Rights Certificates.
(a) Until the Distribution Date, (i) the Class A Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
representing shares of Class A Common Stock registered in the names of the
holders of the Class A Common Stock (which certificates shall be deemed also to
be certificates for the associated Class A Rights) and not by separate rights
certificates, and (ii) the Class A Rights will be transferable only in
connection with the transfer of the associated shares of Class A Common Stock.
As soon as practicable after the Distribution Date, the Rights Agent will send
by first-class, insured, postage prepaid mail, to each record holder of the
Class A Common Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the stock transfer records of the Company,
one or more rights certificates, in substantially the form of Exhibit A hereto
(the "Class A Rights Certificates"), evidencing in the aggregate that number of
Class A Rights to which such holder is entitled in accordance with the
provisions of this Agreement. As of and after the Distribution Date, the Class A
Rights will be evidenced solely by such Class A Rights Certificates. The Class A
Rights are exercisable only in accordance with the provisions of Section 7
hereof and are redeemable only in accordance with Section 23 hereof.
(b) As soon as practicable after the Dividend Record Date, the Company
will cause a copy of a Summary of Class A Rights, in substantially the form
attached hereto as Exhibit B (the "Summary of Class A Rights"), to be sent by
first-class, postage prepaid mail, to each record holder of the Class A Common
Stock as of the Close of Business on the Dividend Record Date, at the address of
such holder shown on the stock transfer records of the Company. With respect to
certificates for the Class A Common Stock outstanding as of the Dividend Record
Date, until the Distribution Date, the Class A Rights associated with the shares
of Class A Common Stock represented by such certificates will be evidenced by
such certificates for the Class A Common Stock and the registered holders of the
Class A Common Stock shall also be the registered holders of the associated
Class A Rights. Until the Distribution Date (or the earlier redemption,
expiration or termination of the Class A Rights), the surrender for transfer of
any of the certificates representing shares of the Class A Common Stock
outstanding on the Dividend Record Date, with or without a copy of the Summary
of Class A Rights, shall also constitute the transfer of the Class A Rights
associated with the Class A Common Stock represented by such certificate.
(c) Class A Rights shall be issued in respect of all shares of Class A
Common Stock issued (whether originally issued or delivered from the Company's
treasury) after the Dividend Record Date but prior to the earliest of (i) the
Distribution Date, (ii) the Expiration Date, or (iii) the redemption of the
Class A Rights, including in respect of all shares of Class A Common Stock
issued upon conversion of Class B Common Stock into Class A Common Stock.
Certificates representing such shares of Class A Common Stock and certificates
issued on transfer of such shares of Class A Common Stock, with or without a
copy of the Summary of Class A Rights, prior to the Distribution Date (or
earlier expiration or redemption of the
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Class A Rights) shall be deemed also to be certificates for the associated Class
A Rights, and commencing as soon as reasonably practicable following the
Dividend Record Date shall bear the following legend (or a legend substantially
in the form thereof):
This certificate also evidences and entitles the holder to Class A
Rights set forth in a Class A Rights Agreement between the issuer and
American Stock Transfer Trust Company, as Rights Agent (the "Rights
Agent"), dated as of July 30, 1998 (the "Class A Rights Agreement"), the
terms of which are incorporated herein by reference and a copy of which
is on file at the principal offices of both the issuer and the Rights
Agent. The Rights Agent will mail to the registered holder of this
certificate a copy of the Class A Rights Agreement, as in effect on the
date of mailing, without charge upon written request. Under certain
circumstances set forth in the Class A Rights Agreement, such Class A
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Under certain circumstances set forth in
the Class A Rights Agreement, Class A Rights issued to, or held by any
Person who is, was or becomes, or acquires shares from, an Acquiring
Person or any Affiliate of an Acquiring Person (as each such term is
defined in the Class A Rights Agreement and generally relating to the
ownership or purchase of large shareholdings), whether currently held by
or on behalf of such Person or Affiliate or by certain subsequent
holders, may become null and void.
Until the Distribution Date or the earlier redemption, expiration or termination
of the Class A Rights, the Class A Rights associated with the Class A Common
Stock shall be evidenced by the Class A Common Stock certificates alone and the
registered holders of Class A Common Stock shall also be the registered holders
of the associated Class A Rights, and the surrender for transfer of any of such
certificates shall also constitute the transfer of the Class A Rights associated
with the Class A Common Stock represented by such certificate. Rights shall be
issued to the extent provided in Section 22 hereof after the Distribution Date
and prior to the Expiration Date.
Section 4. Form of Class A Rights Certificates.
(a) The Class A Rights Certificates (and the form of assignment and the
form of exercise notice and certificate to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Class
A Rights may from time to time be listed or traded, or to conform to usage.
Subject to the provisions of Sections 11 and 22 hereof, the Class A Rights
Certificates, whenever distributed, shall be dated as of the Dividend Record
Date (or, if the shares pursuant to which the Class A Rights are attached are
issued thereafter, such date of issuance), shall include the date of
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countersignature and on their face shall entitle the holders thereof to purchase
such number of shares of Class A Common Stock as shall be set forth therein at
the Purchase Price (as hereinafter defined), but the amount and type of
securities issuable upon the exercise of each Class A Right and the Purchase
Price shall be subject to adjustment as provided herein.
(b) Any Class A Rights Certificate issued pursuant to Section 3(a) or 22
hereof that represents Class A Rights beneficially owned by (i) any Acquiring
Person or any Affiliate of an Acquiring Person, or (ii) any Disqualified
Transferee, and any other Class A Rights Certificate issued pursuant to Section
6 or 11 hereof upon the transfer, exchange, replacement, or adjustment of any
such Class A Rights Certificate shall contain (to the extent feasible) the
following legend:
The Class A Rights represented by this Class A Rights Certificate are or
were beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate (which includes both affiliates and associates)
of an Acquiring Person (as each such term is defined in the Class A
Rights Agreement between the issuer and American Stock Transfer Trust
Company, as Rights Agent, dated as of July 30, 1998 (the "Class A Rights
Agreement")). Accordingly, this Class A Rights Certificate and the Class
A Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Class A Rights Agreement.
The Rights Agent will mail to the registered holder of this certificate
a copy of the Class A Rights Agreement, as in effect on the date of such
mailing, without charge upon written request.
Section 5. Countersignature and Registration.
The Class A Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President, or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Class A Rights Certificates shall be countersigned, either manually or by
facsimile signature, by the Rights Agent and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Class A Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Class A Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, issued, and delivered with the same force and
effect as though the person who signed such Class A Rights Certificates had not
ceased to be such officer of the Company. Any Class A Rights Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Class A Rights Certificate, shall be a proper officer of the
Company to sign such Class A Rights Certificate, although at the date of the
execution of this Agreement any such person was not such an officer.
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Following the Distribution Date, the Rights Agent shall keep or cause to
be kept, at the office of the Rights Agent designated for such purpose, books
for registration and transfer of the Class A Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Class A Rights Certificates, the number of Class A Rights
evidenced on its face by each of the Class A Rights Certificates, and the date
of countersignature thereof by the Rights Agent.
Section 6. Transfer, Split Up, Combination and Exchange of Class A Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Class A Rights Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e), and 14 hereof, at
any time after the Close of Business on the Distribution Date, and at or prior
to the earlier of the Close of Business on the Expiration Date or the redemption
of the Class A Rights, any Class A Rights Certificate may be transferred, split
up, combined or exchanged for another Class A Rights Certificate or Class A
Rights Certificates, entitling the registered holder to purchase a like number
of shares of Class A Common Stock (or, following a Common Stock Event, Class A
Common Stock and/or such other securities (including Class B Common Stock),
cash, or other assets as shall be issuable in respect of the Class A Rights in
accordance with the terms of this Agreement (such other securities, cash or
other assets being referred to herein as "Other Consideration")) as the Class A
Rights Certificate surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Class A Rights Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender the Class
A Rights Certificate to be transferred, split up, combined, or exchanged at the
office of the Rights Agent designated for such purpose, accompanied by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request. Neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any such
surrendered Class A Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Class A Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner from whom the Class
A Rights evidenced by such Class A Rights Certificate are to be transferred (or
the Beneficial Owner to whom such Class A Rights are to be transferred) or
Affiliates thereof as the Company shall reasonably request. Thereupon, subject
to Sections 4(b), 7(e) and 14 hereof, the Company shall execute and the Rights
Agent shall countersign and deliver to the Person entitled thereto a Class A
Rights Certificate or Class A Rights Certificates, as the case may be, as so
requested. The Company may require payment by the holders of Class A Rights of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Class A
Rights Certificates which the Company is not required to pay in accordance with
Section 9(d) hereof.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Class A Rights Certificate,
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and, in case of loss, theft or destruction, the receipt of indemnity or security
satisfactory to them, and upon reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Class A Rights Certificate, if mutilated,
accompanied by a signature guarantee and such other documentation as the Rights
Agent may reasonably request, the Company will execute and deliver a new Class A
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Class A Rights Certificate so
lost, stolen, destroyed, or mutilated.
Section 7. Exercise of Class A Rights; Purchase Price; Expiration Date of Class
A Rights.
(a) Except as otherwise provided herein, the registered holder of any
Class A Rights Certificate may exercise the Class A Rights evidenced thereby in
whole or in part at any time from and after the Distribution Date and at or
prior to the Close of Business on July 30, 2008 (the "Expiration Date") or the
earlier redemption of the Class A Rights. Immediately upon the Close of Business
on the Expiration Date (or the earlier redemption of Class A Rights), all Class
A Rights shall be extinguished and all Class A Rights Certificates shall become
null and void. To exercise Class A Rights, the registered holder of the Class A
Rights Certificate evidencing such Class A Rights shall surrender such Class A
Rights Certificate, with the form of election to purchase on the reverse side
thereof and the certificate contained therein duly executed, to the Rights Agent
at the office of the Rights Agent designated for such purpose, accompanied by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request, together with payment in cash, only by electronic or wire
transfer, or by certified check or bank check, of the Purchase Price with
respect to the total number of shares of Class A Common Stock (or, after a
Common Stock Event, shares or similar units of Class A Common Stock and/or Other
Consideration) as to which the Class A Rights are exercised (which payment shall
include any additional amount payable by such Person in accordance with Section
9(d) hereof). The Rights Agent shall promptly deliver to the Company all
payments of the Purchase Price received in respect of Class A Rights
Certificates accepted for exercise.
(b) The purchase price for each share of Class A Common Stock issuable
pursuant to the exercise of a Class A Right (the "Purchase Price") shall
initially be $80.00, shall be subject to adjustment as provided in Section 11
hereof, and shall be payable in lawful money of the United States of America.
(c) Upon receipt of a Class A Rights Certificate representing the Class
A Rights, with the form of election to purchase set forth on the reverse side
thereof and the certificate contained therein duly executed, accompanied by
payment of the Purchase Price, with respect to each Class A Right so exercised,
the Rights Agent, subject to Sections 7(e), 11(a)(iii) and 20(k) hereof, shall
thereupon promptly (i) requisition from any transfer agent of the Class A Common
Stock (or from the Company if there shall be no such transfer agent, or make
available if the Rights Agent is such transfer agent) certificates for the total
number of shares
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of Class A Common Stock to be purchased and the Company hereby irrevocably
authorizes such transfer agent to comply with any such request, (ii) after
receipt of such certificates, cause the same to be delivered to or upon the
order of the registered holder of such Class A Rights Certificate, registered in
such name or names as may be designated in writing by such holder, and (iii)
when appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of a fractional share in accordance with Section 14 hereof and
after receipt promptly deliver such cash to or upon the order of the registered
holder of such Class A Rights Certificate. After the occurrence of a Common
Stock Event, the Company shall make all necessary arrangements so that any Other
Consideration then deliverable in respect of the Class A Rights is available for
distribution by the Rights Agent. For purposes of this Section 7, the Rights
Agent shall be entitled to rely, and shall be protected in relying, on an
Officers' Certificate from the Company to the effect that the Distribution Date
has occurred.
(d) Subject to Sections 4(b), 7(e) and 14 hereof, in case the registered
holder of any Class A Rights Certificate shall exercise less than all the Class
A Rights evidenced thereby, a new Class A Rights Certificate evidencing Class A
Rights equivalent to the Class A Rights remaining unexercised shall be executed
and delivered by the Company to the Rights Agent and countersigned and delivered
by the Rights Agent to the registered holder of such Class A Rights Certificate
or to such holder's duly authorized assigns.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Common Stock Event, any Class A Rights
beneficially owned by (i) an Acquiring Person or an Affiliate of an Acquiring
Person, or (ii) a Disqualified Transferee shall become null and void without any
further action, and no holder of such Class A Rights shall have any rights
whatsoever with respect to such Class A Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but the Company shall have no liability to any holder of Class A
Rights Certificates or other Person and none of the terms of this Agreement or
the Class A Rights shall be deemed to be waived with respect to such holder or
other Person as a result of any failure by the Company to make any
determinations with respect to an Acquiring Person or any Affiliate of an
Acquiring Person or Disqualified Transferees hereunder or any failure to have a
legend placed on any Class A Rights Certificate in accordance with Section 4(b)
hereof or on any Class A Common Stock certificate in accordance with Section
3(c) hereof.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a holder of any Class A Rights Certificate upon the occurrence of any
purported exercise thereof unless such holder shall have (i) completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Class A Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner from whom the Class A Rights evidenced by such Class A Rights
Certificate are to be
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transferred (or the Beneficial Owner to whom such Class A Rights are to be
transferred) or Affiliates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Class A Rights Certificates.
All Class A Rights Certificates surrendered for the purpose of and
accepted for exercise, or surrendered for the purpose of redemption, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any
of its agents (other than the Rights Agent), be delivered to the Rights Agent
for cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Class A Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Class A
Rights Certificates purchased or retired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Class A Rights
Certificates to the Company, or may, at the written request of the Company, but
shall not be required to, destroy such canceled Class A Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Class A Common Stock; Other
Covenants.
(a) The Company covenants and agrees that on and after the Distribution
Date, it shall use reasonable efforts to cause to be reserved and kept available
out of its authorized and unissued shares of Class A Common Stock (or, following
the occurrence of a Common Stock Event, out of its authorized and unissued
shares of Class A Common Stock and/or Other Consideration, or out of its
authorized and issued shares held in its treasury), the number of shares of
Class A Common Stock (or, following a Common Stock Event, shares and/or similar
units of Class A Common Stock and/or Other Consideration) that, except as
provided in Section 11(a)(iii) hereof, would then be sufficient to permit the
exercise in full of all outstanding Class A Rights; provided, however, that the
reservation of such shares shall be subject and subordinate to any other
reservation of such shares made by the Company at any time for any lawful
purpose; provided, further, however, that in no event shall such failure to so
reserve shares affect the rights of any holder of Class A Rights hereunder.
(b) The Company covenants and agrees that on and after the Distribution
Date so long as the Class A Common Stock (or, following a Common Stock Event,
shares and/or similar units of Class A Common Stock and/or Other Consideration)
issuable upon the exercise of Class A Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause all shares
(or similar units) reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
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(c) The Company covenants and agrees that it shall take all such action
as may be necessary to ensure that each share of Class A Common Stock (or,
following a Common Stock Event, each share and/or similar unit of Class A Common
Stock and/or Other Consideration) delivered upon exercise of Class A Rights
shall, at the time of delivery of the certificates for such shares (or units),
subject to payment in full of the Purchase Price, be duly and validly authorized
and issued and fully paid and nonassessable.
(d) The Company covenants and agrees that it shall pay when due and
payable any and all federal and state transfer taxes and similar charges which
may be payable in respect of the issuance or delivery of the Class A Rights
Certificates or of any shares of Class A Common Stock (or, following the
occurrence of a Common Stock Event, each share and/or similar unit of Class A
Common Stock and/or Other Consideration) upon the exercise of Class A Rights;
provided, however, that the Company shall not be required to pay any transfer
tax which may be payable in respect of any transfer involved in the transfer or
delivery of Class A Rights Certificates or in the issuance or delivery of
certificates for any shares of Class A Common Stock (or, following the
occurrence of a Common Stock Event, each share and/or similar unit of Class A
Common Stock and/or Other Consideration) in a name other than that of the
registered holder of the Class A Rights Certificate evidencing Class A Rights
surrendered for exercise or to issue or deliver any certificates for any shares
of Class A Common Stock (and, following the occurrence of a Common Stock Event,
any shares and/or similar units of Class A Common Stock and/or Other
Consideration) upon the exercise of any Class A Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Class A Rights
Certificate at the time of surrender thereof) or until it has been established
to the Company's satisfaction that no such tax is due.
(e) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the first occurrence of a Common
Stock Event on which the consideration to be delivered by the Company upon
exercise of the Class A Rights has been determined in accordance with this
Agreement, or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
securities issuable upon exercise of the Class A Rights on an appropriate form,
(ii) to cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Class A Rights are no
longer exercisable for such securities, or (B) the Expiration Date or earlier
redemption of the Class A Rights. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states of the United States in connection with the
exercisability of the Class A Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(e), the exercisability of the Class
A Rights in order to prepare and file such registration statement or to permit
it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Class A Rights has
been temporarily suspended. The Company shall
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thereafter issue a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Class A Rights shall not be exercisable in any jurisdiction unless
the requisite qualification in such jurisdiction shall have been obtained.
Section 10. Class A Common Stock Record Date; Etc.
Each Person in whose name any certificate for any shares of Class A
Common Stock (or, following the occurrence of a Common Stock Event, shares
and/or similar units of Class A Common Stock and/or Other Consideration) is
issued upon the exercise of Class A Rights shall for all purposes be deemed to
have become the holder of record of such shares of Class A Common Stock (or such
shares and/or similar units of Class A Common Stock and/or Other Consideration,
as the case may be) represented thereby, and such certificate shall be dated the
date which is the later of (i) the date upon which the Class A Rights
Certificate evidencing such Class A Rights was duly surrendered, or (ii) the
date upon which payment of the Purchase Price (and any applicable transfer
taxes) in respect thereof was made; provided, however, that if such date is a
date upon which the relevant transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares (or Other
Consideration) on, and such certificate shall be dated, the next succeeding
Business Day on which such transfer books of the Company are open; provided,
further, that the Company covenants and agrees that it shall not close such
transfer books for a period exceeding ten consecutive days. Prior to the
exercise of the Class A Rights evidenced thereby (which shall be deemed to have
occurred on the date such certificate for shares and/or similar units of Class A
Common Stock or Other Consideration shall be dated in accordance with this
Section 10), the holder of a Class A Rights Certificate, as such, shall not be
entitled to any rights of a security holder of the Company with respect to the
shares of Class A Common Stock (and/or such shares or similar units of Class A
Common Stock or Other Consideration) for which the Class A Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions, or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as expressly provided herein.
Section 11. Antidilution Adjustments.
The Purchase Price and the number and kind of securities covered by each
Class A Right and the number of Class A Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event that the Company shall at any time after the
Declaration Date (A) declare and pay a dividend on the Class A Common
Stock payable in shares of Class A Common Stock, (B) subdivide the
outstanding Class A Common Stock, (C) combine the outstanding Class A
Common Stock into a smaller number of shares, or (D) issue, change, or
alter any of its shares of capital stock in a reclassification or
recapitalization (including any such reclassification in connection with
a consolidation or merger in
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which the Company is the continuing or surviving Person), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, then,
and in each such case, the Purchase Price in effect at the time of the
record date for such dividend or the effective time of such subdivision,
combination, reclassification or recapitalization, and the number and
kind of shares of capital stock issuable upon exercise of the Class A
Rights at such time, shall be proportionately adjusted so that the
holder of any Class A Right exercised after such time shall be entitled
to receive the aggregate number and kind of shares of Class A Common
Stock or other capital stock which, if such Class A Right had been
exercised immediately prior to such time at the Purchase Price then in
effect and at a time when the transfer books for the Class A Common
Stock (or other capital stock) of the Company were open, such holder
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination, reclassification or
recapitalization. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) In the event
(A) any Person shall at any time after the Declaration
Date become an Acquiring Person; or
(B) any Acquiring Person or any Affiliate of any Acquiring
Person, at any time after the Declaration Date, directly or
indirectly, shall (1) merge into the Company or otherwise combine
with the Company, and the Company shall be the continuing or
surviving corporation of such merger or combination and the Class
A Common Stock of the Company shall remain outstanding and no
shares thereof shall be changed or otherwise transformed into
stock or other securities of any other Person or the Company or
cash or any other property, (2) in one or more transactions,
transfer any assets to the Company in exchange (in whole or in
part) for shares of any class of its equity securities or for
securities exercisable for or convertible into shares of any such
class or otherwise obtain from the Company, with or without
consideration, any additional shares of any such class or
securities exercisable for or convertible into shares of any such
class (other than as part of a pro rata distribution to all
holders of such class), (3) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one
transaction or a series of transactions) to, from or with the
Company or any of the Company's Subsidiaries, assets with an
aggregate fair market value in excess of 25% of the assets of the
Company and its Subsidiaries determined on a consolidated basis
on terms and conditions less favorable to the Company than the
Company would be able to obtain through arm's-length negotiation
with an unaffiliated third party, (4) receive any compensation
from the Company or any of the Company's Subsidiaries other than
compensation as
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a director of the Company or for full-time employment as a
regular employee at rates in accordance with the Company's (or
such Subsidiary's) past practices, (5) receive the benefit
(except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance
provided by the Company or any of its Subsidiaries on terms and
conditions less favorable to the Company (or such Subsidiary)
than the Company would be able to obtain through arm's-length
negotiation with an unaffiliated third party or (6) commence a
tender or exchange offer for securities of the Company; or
(C) during such time as there is an Acquiring Person at
any time after the Declaration Date, there shall be any
reclassification of securities (including any combination
thereof), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries
(whether or not with or into or otherwise involving an Acquiring
Person or any Affiliate of an Acquiring Person), or any
repurchase by the Company or any of its Subsidiaries of shares of
the Class A Common Stock of the Company, or any other class or
series of securities issued by the Company, which
reclassification, recapitalization, merger, consolidation or
repurchase is effected at a time when a majority of the Board
consists of persons who are the Acquiring Person or its
Affiliates, or nominees or designees of any thereof, which has
the effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class of
equity securities or securities exercisable for or convertible
into any class of equity securities of the Company or any of its
Subsidiaries which is directly or indirectly owned by an
Acquiring Person or any Affiliate of an Acquiring Person,
then, in each such case, upon the Close of Business 10 Business Days
after the occurrence of such event, proper provision shall be made so
that each holder of a Class A Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon exercise
thereof at the Purchase Price in effect at the time of exercise in
accordance with the terms of this Agreement, in lieu of one share of
Class A Common Stock, such number of shares of Class A Common Stock of
the Company as shall equal the result obtained by (x) multiplying an
amount equal to the then current Purchase Price by an amount equal to
the number of shares of Class A Common Stock for which a Class A Right
was or would have been exercisable immediately prior to the first
occurrence of any such event whether or not such Class A Right was then
exercisable, and (y) dividing that product by 50% of the Current Market
Price per share of the Class A Common Stock of the Company (as defined
in Section 11(d) hereof) determined as of the date of such first
occurrence.
(iii) In lieu of issuing whole or fractional shares of Class A
Common Stock in accordance with Section 7(c) hereof, the Company shall
(i) in the event that the number of shares of Class A Common Stock which
are authorized by the Company's charter
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but not outstanding or reserved for issuance for purposes other than
upon exercise of the Class A Rights are not sufficient to permit the
exercise in full of the Class A Rights in accordance with Section 7(c)
hereof, or (ii) if a majority of the Board then in office determines
that it would be appropriate and not contrary to the interests of the
holders of Class A Rights (other than any Acquiring Person or
Disqualified Transferee or any Affiliate of the Acquiring Person or
Disqualified Transferee), (A) determine an amount, if any, (the "Excess
Amount") equal to the excess of (1) the value (the "Current Value") of
the whole or fractional shares of Class A Common Stock issuable upon the
exercise of a Class A Right in accordance with Section 7(c) hereof, over
(2) the Purchase Price, and (B) with respect to each Class A Right,
(subject to Section 7(e) hereof) make adequate provision to substitute
for such whole or fractional shares of Class A Common Stock, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Class B Common Stock or other equity securities
of the Company (including, without limitation, shares or units of
preferred stock which the Board has deemed in good faith to have the
same value as a share of Class A Common Stock (such shares of equity
securities being referred to herein as "Class A Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing (which would include the additional
consideration provided to any holder by reducing the Purchase Price)
having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board; provided, however,
subject to the provisions of Section 9(e), that if the Company shall not
have made adequate provision to deliver value pursuant to clause (B)
above within 30 days following the Close of Business 10 Business Days
after the first occurrence of a Common Stock Event described in Section
11(a)(ii) hereof, then the Company shall be obligated to deliver, upon
the surrender for exercise of a Class A Right and without requiring
payment of the Purchase Price, whole or fractional shares of Class A
Common Stock (to the extent available) and then, if necessary, cash,
securities, and/or assets which in the aggregate are equal to the Excess
Amount. If the Board shall determine in good faith that it is likely
that sufficient additional shares of Class A Common Stock or Class A
Common Stock Equivalents could be authorized for issuance upon exercise
in full of the Class A Rights, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days following
the Close of Business 10 Business Days after the first occurrence of
such a Common Stock Event (such 30 day period) as it may be extended to
90 days, is referred to herein as the "Substitution Period"). To the
extent that the Company determines that some action is to be taken
pursuant to the preceding provisions of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that (except
as to the form of consideration which shall be determined as appropriate
by a majority of the Board then in office) such action shall apply
uniformly to all outstanding Class A Rights which shall not have become
null and void, and (y) may suspend the exercisability of the Class A
Rights until the expiration of the Substitution Period in order to seek
any authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such provisions and to
determine the value thereof. In the event
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of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Class A Rights has been
temporarily suspended. The Company shall thereafter issue a public
announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Class A Common
Stock issuable upon exercise of a Class A Right in accordance with
Section 7(c) hereof shall be the Current Market Price per share of the
Class A Common Stock (as determined pursuant to Section 11(d) hereof) on
the Close of Business 10 Business Days after the date of the first
occurrence of such a Common Stock Event and the value of any Class A
Common Stock Equivalent shall be deemed to be equal to the Current
Market Price per share of the Class A Common Stock on such date.
(b) In the event the Company shall, after the Dividend Record Date, fix
a record date for the issuance of any options, warrants, or other rights to all
holders of Class A Common Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase (i) Class A
Common Stock or (ii) Class A Common Stock Equivalents or (iii) securities
convertible into Class A Common Stock or Class A Common Stock Equivalents at a
price per share of Class A Common Stock or Class A Common Stock Equivalents (or
having a conversion price per share of Class A Common Stock, if a security is
convertible into Class A Common Stock or Class A Common Stock Equivalents) less
than the Current Market Price per share of Class A Common Stock (determined in
accordance with Section 11(d) hereof) determined as of such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Class A
Common Stock outstanding on such record date plus the number of shares of Class
A Common Stock and/or Class A Common Stock Equivalents which the aggregate
minimum offering price of the total number of shares of Class A Common Stock
and/or Class A Common Stock Equivalents so to be offered (and/or the aggregate
minimum conversion price of such convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be the
number of shares of Class A Common Stock outstanding on such record date plus
the maximum number of additional shares of Class A Common Stock and/or Class A
Common Stock Equivalents to be offered for subscription or purchase (or the
maximum number of shares into which such convertible securities so to be offered
are convertible). In case such subscription price may be paid by delivery of
consideration part or all of which shall be in a form other than cash, for
purposes of this Section 11(b) the value of such consideration shall be the fair
market value thereof as determined in good faith by the Board (which
determination shall be described in an Officers' Certificate filed with the
Rights Agent). Shares of Class A Common Stock owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such options, warrants or other rights are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed (subject,
however, to such other adjustments as are provided herein).
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(c) In the event that the Company shall, after the Dividend Record Date,
fix a record date for the making of a distribution to all holders of Class A
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving or continuing
Person) of evidences of indebtedness, cash (other than cash dividends paid out
of the earnings or retained earnings of the Company and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied), other property (other than a
dividend payable in a number of shares of Class A Common Stock, but including
any dividend payable in capital stock other than Class A Common Stock), or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, of which the numerator shall be (i) the Current
Market Price per share of Class A Common Stock (as defined in Section 11(d)
hereof) determined as of such record date, less (ii) the sum of (A) that portion
of cash plus (B) the fair market value, as determined in good faith by the Board
(which determination shall be described in an Officers' Certificate filed with
the Rights Agent) of that portion of such evidences of indebtedness, such other
property, and/or such subscription rights or warrants applicable to one share of
Class A Common Stock and of which the denominator shall be such Current Market
Price per share of the Class A Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed (subject, however, to such other adjustments as are provided herein).
(d) For purposes of any computation pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share (or unit) of any security on any
date shall be deemed to be the average of the daily Closing Price of such
security for the 10 consecutive Trading Days immediately after such date, and
for the purpose of any other computation hereunder, the "Current Market Price"
per share (or unit) of any security on any date shall be deemed to be the
average of the daily Closing Price of such security for the 20 consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the Current Market Price per share of such security is determined
during a period following the announcement by the issuer of such security of (i)
a dividend or distribution on such security payable in shares (or units) of such
security or securities convertible into shares (or units) of such security, or
(ii) any subdivision, combination or reclassification of such security, and
prior to the expiration of such 10 Trading Days or 20 Trading Days after (A) the
ex-dividend date for such dividend or distribution, or (B) the record date for
such subdivision, combination or reclassification, as the case may be, then, and
in each such case, the "Current Market Price" shall be the Closing Price of such
security on the last day of such respective 10 Trading Day or 20 Trading Day
period. For purposes of this Agreement, the "Closing Price" of any security on
any day shall be the last sale price, regular way, with respect to shares (or
units) of such security, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, with respect to such
security, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted
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to trading on the New York Stock Exchange; or, if such security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading; or, if such security is not so listed or admitted to
trading, the last quoted sale price with respect to shares (or units) of such
security, or, if not so quoted, as the average of the high bid and low asked
prices in the over-the-counter market with respect to shares (or units) of such
security, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other similar system then in use; or, if on
any such date such security is not quoted by any such organization, the average
of the closing bid and asked prices with respect to shares (or units) of such
security, as furnished by a professional market maker making a market in such
security selected by the Board; or, if no such market maker is available, the
fair market value of shares (or units) of such security as of such day as
determined in good faith by the Board (which determination shall be described in
an Officers' Certificate filed with the Rights Agent).
(e) No adjustment in the Purchase Price shall be required unless
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share (or similar
unit) of Class A Common Stock or other securities. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of the
transaction which mandates the adjustment or (ii) the Expiration Date. Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those
required by this Section 11, as it in its discretion shall determine to be
advisable in order that any dividends, subdivision of shares, distribution of
rights to purchase shares of beneficial interest or other stock or securities,
or distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
(f) In the event that at any time, as a result of an adjustment made in
respect of a Common Stock Event, the holder of any Class A Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than shares of Class A Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Class A Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
such other shares contained in Sections 11(a), (b), (c), (e), (g), (h), (i),
(j), (k), (m) and (p) hereof, and the provisions of Sections 7, 9, 10, 11(d), 13
and 14 hereof with respect to the shares of Class A Common Stock shall apply on
like terms to any such other shares.
(g) All Class A Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Class A Common
Stock purchasable from
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time to time hereunder upon exercise of the Class A Rights represented thereby,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made pursuant to Sections 11(b) and 11(c) hereof, each Class A
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of shares of Class A Common Stock (calculated to the nearest
ten-thousandth of a share) obtained by (i) multiplying (x) the number of shares
of Class A Common Stock covered by a Class A Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) Assuming that no other adjustment pursuant to this Section 11 has
been made, the Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Class A Rights in substitution for any
adjustment in the number of shares of Class A Common Stock purchasable upon the
exercise of a Class A Right. Each of the Class A Rights outstanding after such
adjustment of the number of Class A Rights shall be exercisable for the number
of shares of Class A Common Stock for which a Class A Right was exercisable
immediately prior to such adjustment. Each Class A Right held of record prior to
such adjustment of the number of Class A Rights shall become that number of
Class A Rights (calculated to the nearest ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price by the Purchase Price in effect immediately after such adjustment
of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Class A Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Class A Rights Certificates have been issued,
shall be at least 10 days later than the date of the public announcement. If
Class A Rights Certificates have been issued, upon each adjustment of the number
of Class A Rights pursuant to this Section 11(i) the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Class A Rights
Certificates on such record date Class A Rights Certificates evidencing, subject
to Section 14 hereof, the additional Class A Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Class A Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the Company,
new Class A Rights Certificates evidencing all the Class A Rights to which such
holders shall be entitled after such adjustment. Class A Rights Certificates so
to be distributed shall be issued, executed, and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Class A Rights Certificates on the record date specified in the public
announcement.
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(j) Irrespective of any adjustment or change in the Purchase Price or
the number of whole or fractional shares of Class A Common Stock issuable upon
exercise of such Class A Rights, the Class A Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share and the
number of shares of Class A Common Stock which were expressed in the initial
Class A Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of shares of
Class A Common Stock issuable upon exercise of the Class A Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue such number of
fully paid and nonassessable shares of Class A Common Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Class A Right exercised after such record
date of the number of shares of Class A Common Stock or other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of shares of Class A Common Stock or other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, by means of a resolution of the Board acting in good faith,
shall determine to be advisable in order that any consolidation or subdivision
of the Class A Common Stock, issuance wholly for cash of any Class A Common
Stock at less than the Current Market Price thereof, issuance wholly for cash of
Class A Common Stock (or other securities which by their terms are convertible
into or exchangeable for Class A Common Stock), dividends payable in shares of
Class A Common Stock or other capital stock or shares of beneficial interest, or
issuance of rights, options, or warrants referred to hereinabove in this Section
11, hereafter made or declared by the Company to the holders of its Class A
Common Stock, shall not be taxable to such holders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, more than 25% of (A) the assets
(taken at net asset value as stated on the books of the Company and determined
on a consolidated basis
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in accordance with generally accepted accounting principles consistently
applied) or (B) the earning power of the Company and its Subsidiaries
(determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied) to any other Person or Persons
(other than the Company or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale, there are any rights,
warrants or other instruments or securities outstanding or agreements (whether
or not in writing) in effect that would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Class A Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of such other Person shall have received a distribution
of Class A Rights previously owned by such Person or any of its Affiliates.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Class A Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Dividend Declaration Date and
prior to the Distribution Date (i) declare or pay a dividend on the outstanding
shares of Class A Common Stock payable in shares of Class A Common Stock, or
(ii) effect a subdivision, combination or consolidation of the outstanding Class
A Common Stock (by reclassification or otherwise than by payment of dividends in
shares of Class A Common Stock) into a greater or smaller number of shares, then
in any such case, (i) the number of shares of Class A Common Stock purchasable
after such event upon proper exercise of each Class A Right shall be determined
by multiplying the number of shares of Class A Common Stock so purchasable
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Class A Common Stock outstanding immediately prior
to the occurrence of the event and the denominator of which shall be the total
number of shares of Class A Common Stock outstanding immediately following the
occurrence of such event; and (ii) each share of Class A Common Stock
outstanding immediately after such event shall have issued with respect to it
that number of Class A Rights which each share of Class A Common Stock
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(p) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjustments.
Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall (a) promptly prepare an Officers' Certificate setting forth
such adjustment, including any adjustment in Purchase Price, the number of
shares or Other Consideration payable, and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights
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Agent and with the transfer agent for the Class A Common Stock a copy of such
Officers' Certificate, and (c) mail a brief summary thereof to each registered
holder of a Class A Rights Certificate in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such Officers'
Certificate and on any adjustment therein contained, and shall not be deemed to
have knowledge of any such adjustment unless and until it shall have received
such an Officers' Certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
In the event that, following the Stock Acquisition Date, directly or
indirectly, (a) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) and the Company shall not be the continuing
or surviving Person of such consolidation or merger, (b) any Person (other than
a Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) shall consolidate with, or merge with and into, the Company, the Company
shall be the continuing or surviving Person of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the Common Stock
of the Company shall be changed or otherwise transformed into other stock or
other securities of any other Person or the Company or cash or any other
property, or (c) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, more than 25% of (A) the assets (taken at net
asset value as stated on the books of the Company and determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied) or (B) the earning power of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any Person (other than
the Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof) then, from and after such event,
proper provision shall be made so that (i) each holder of a Class A Right,
except as provided in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the Purchase Price in effect at the time
of such exercise in accordance with the terms of this Agreement, such number of
whole or fractional shares of validly authorized and issued, fully paid,
non-assessable, and freely tradeable Common Stock of such other Person (or in
the case of a transaction or series of transactions described in clause (c)
above, the Person receiving the greatest amount of the assets or earning power
of the Company, or if the Common Stock of such other Person is not and has not
been continuously registered under Section 12 of the Exchange Act for the
preceding 12-month period and such Person is a direct or indirect Subsidiary of
another Person, that other Person, or if such other Person is a direct or
indirect Subsidiary of more than one other Person, the Common Stock of two or
more of which are and have been so registered, such other Person whose
outstanding Common Stock has the greatest aggregate value), free and clear of
any liens, encumbrances, rights of first refusal, or other adverse claims, as
shall be equal to the result obtained by (x) multiplying the Purchase Price in
effect immediately prior to the first occurrence of any Common Stock Event
described in this Section 13 by the number of shares of Class A Common Stock for
which a Class A Right is
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exercisable immediately prior to such first occurrence (and without taking into
account any prior adjustment made pursuant to 11(a)(ii)) and (y) dividing that
product by 50% of the Current Market Price per share (as defined in Section
11(d) hereof) of the Common Stock of such other Person determined as of the date
of consummation of such consolidation, merger, sale, or transfer; (ii) the
issuer of such Common Stock shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale, or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed, for all purposes of this Agreement, to refer to such
issuer, it being specifically intended that the provisions of Section 11 hereof
(other than Section 11(a)(ii) hereof) shall apply only to such issuer following
the first occurrence of a Common Stock Event described in this Section 13; (iv)
such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the whole or fractional shares of its Common Stock thereafter deliverable upon
the exercise of the Class A Rights; and (v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the first occurrence of any Common Stock
Event described in clauses (a), (b) or (c) of this Section 13. The Company shall
not consummate any such consolidation, merger, sale or transfer unless (i) such
issuer shall have a sufficient number of authorized shares of its Common Stock
which have not been issued or reserved for issuance as will permit the exercise
in full of the Class A Rights in accordance with this Section 13, and (ii) prior
thereto the Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing and further providing that as
soon as practicable after the date of any Common Stock Event described above in
this Section 13 such issuer shall (A) prepare and file a registration statement
under the Act, with respect to the Class A Rights and the securities purchasable
upon exercise of the Class A Rights on an appropriate form, and will use its
best efforts to cause such registration statement to (I) become effective as
soon as practicable after such filing and (II) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date, and (B) will deliver to holders of the Class A Rights
historical financial statements of such issuer and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act. Furthermore, in case the Person which is to be party to a
transaction referred to in this Section 13 has any provision in any of its
authorized securities or in its charter or by-laws or other agreement or
instrument governing its affairs, which provision would have the effect of
causing such Person to issue, in connection with, or as a consequence of, the
consummation of a Common Stock Event described in clauses (a), (b), or (c) of
this Section 13, whole or fractional shares of Common Stock of such Person at
less than the then Current Market Price per share thereof (as defined in Section
11(d) hereof), or to issue securities exercisable for, or convertible into,
Common Stock of such Person at less than such then Current Market Price, then,
in such event, the Company hereby agrees with each holder of the Class A Rights
that it shall not consummate any such transaction unless prior thereto the
Company and such Person shall have executed and delivered to the Rights Agent a
supplemental agreement providing that such provision in question shall have been
canceled, waived, or amended so that it will have no effect in
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connection with, or as a consequence of, the consummation of the proposed
transaction. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Common Stock Event described in this Section 13 shall occur at any time
after the occurrence of a Common Stock Event described in Section 11(a)(ii)
hereof, the Class A Rights which have not theretofore been exercised shall
thereafter become exercisable, except as provided in Section 7(e) hereof, in the
manner described in this Section 13.
Section 14. Fractional Class A Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Class A
Rights or to distribute fractions of Class A Rights, except prior to the
Distribution Date as provided in Section 11(i) hereof, or to distribute Class A
Rights Certificates which evidence fractional Class A Rights. In lieu of issuing
such fractional Class A Rights, at the election of the Company, there shall be
paid to the registered holders of the Class A Rights with regard to which such
fractional Class A Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Class A Right. For
the purposes of this Section 14(a), the current market value of a whole Class A
Right shall be the Closing Price of the Class A Rights for the Trading Day
immediately prior to the date on which such fractional Class A Rights would have
been otherwise issuable.
(b) The Company shall not be required to issue fractions of shares of
its capital stock upon exercise of the Class A Rights or to distribute
certificates which evidence fractional shares. In lieu of fractional shares, at
the election of the Company, there shall be paid to the registered holders of
Class A Rights at the time such Class A Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of a
share of such capital stock. For purposes of this Section 14(b), the current
market value of a share of such capital stock shall be the Closing Price of such
capital stock for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Class A Right, by the acceptance of the Class A
Right, expressly waives such holder's right to receive any fractional Class A
Rights or (except as provided in Section 14(b) hereof) any fractional share upon
exercise of a Class A Right.
Section 15. Rights of Action.
Excepting the rights of action given the Rights Agent under Section 18
hereof and except as set forth in Section 20(l) hereof, all rights of action in
respect of this Agreement are vested in the registered holder of each Class A
Right; and any registered holder of any Class A Right, without the consent of
the Rights Agent or of the holder of any other Class A Right, may, in its own
behalf and for its own benefit, enforce, and may institute and maintain any
suit, action, or proceeding against the Company to enforce, or otherwise act in
respect of, such registered holder's right to exercise the rights evidenced by
such Class A Right in the manner
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provided in such Class A Rights Certificate and in this Agreement, and the
Company hereby agrees to reimburse such registered holder for all expenses
(including reasonable attorneys' fees) incurred by such registered holder in
connection therewith. Without limiting the foregoing or any remedies available
to the holders of Class A Rights, it is specifically acknowledged that the
holders of Class A Rights would not have an adequate remedy at law for any
breach of the obligations hereunder, and shall be entitled to injunctive relief
against actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement.
Section 16. Agreement of Class A Rights Holders.
Every holder of a Class A Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other holder of a
Class A Right that:
(a) prior to the Distribution Date, the Class A Rights will be
transferable only in connection with the transfer of Class A Common Stock;
(b) from and after the Distribution Date, the Class A Rights
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer with a form of assignment and
certificate set forth on the reverse side thereof duly executed, accompanied by
a signature guarantee and such other documentation as the Rights Agent may
reasonably request;
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name a Class A Rights Certificate
(or, prior to the Distribution Date, the associated Class A Common Stock
certificate) is registered as the absolute owner thereof and of the Class A
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Class A Rights Certificate or, prior to the Distribution Date, the
associated Class A Common Stock certificate, made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Class A Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company agrees to use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
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Section 17. Class A Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Class A Rights Certificate shall be entitled
to vote, receive dividends, or otherwise be deemed for any purpose the holder of
any securities of the Company which may be issuable on the exercise of the Class
A Rights represented thereby, nor shall anything contained herein or in any
Class A Rights Certificate be construed to confer upon the holder of any Class A
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote in the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
action by the Company, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or preemptive rights, or otherwise, until the time specified in
Section 10 hereof.
Section 18. Concerning the Rights Agent.
The Company agrees to pay to the Rights Agent such reasonable
compensation as shall be agreed to in writing between the Company and the Rights
Agent for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any and all loss, liability, damages, claims or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses (including reasonable attorneys' fees and
expenses) of defending against any claim of liability for any of the foregoing.
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 Class A Rights
Certificate or certificate for any number of shares of Class A Common Stock or
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed and executed by the proper Person or Persons, and
verified or acknowledged as required by this Agreement.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the 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 shall be a party, or any corporation
succeeding to the shareholder services business of the Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties
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hereto; provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement and any of the Class A Rights Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Class A Rights Certificates so countersigned; and in case at that time any of
the Class A Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Class A 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 Class A Rights Certificates shall have the full force
provided in the Class A Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Class A Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver such Class A Rights Certificates so countersigned; and in
case at that time any of the Class A Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Class A Rights Certificates
either in its prior name or in its changed name; and in all such cases such
Class A Rights Certificates shall have the full force provided in the Class A
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes only the duties and obligations expressly
imposed upon it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent. The Rights Agent shall
perform its duties and obligations hereunder upon the following terms and
conditions:
(a) The Rights Agent may consult with legal counsel of its selection
(who may be legal counsel to the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate (an "Officers' 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 Officers' Certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such Officers' Certificate.
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(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Class A
Rights Certificates (except its countersignature on such Class A Rights
Certificate) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Class A Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Class A Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof or be responsible for the manner, method
or amount of any such adjustment or procedures or the ascertaining of the
existence of facts that would require any such adjustment or procedure (except
with respect to the exercise of Class A Rights evidenced by Class A Rights
Certificates after receipt of a certificate delivered pursuant to Section 12
hereof, describing any such adjustment or procedures); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Class A Common Stock or other securities to
be issued pursuant to this Agreement or any Class A Rights Certificate or as to
whether any shares of Class A Common Stock, or any shares or similar units of
other securities, will, when issued, be validly authorized and issued, fully
paid, and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of 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
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer. Any application by the
Rights Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent with respect to its duties or obligations under this Agreement
and the date on and/or after which such action shall be taken or omitted and the
Rights Agent shall not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after the date specified
therein (which date shall not be less than three Business Days after the date
any such officer actually receives such
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application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking or omitting any such action, the Rights
Agent has received written instructions from the Company in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer, or employee
of the Rights Agent may buy, sell, or deal in any of the Class A 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 entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, that reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Class A Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certification appearing on the
reverse side thereof following the form of election to purchase has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
(l) The provisions of this Section 20 are solely for the benefit of the
Rights Agent or the Company and any failure or omission under this Section 20
shall not affect the rights of the Company under this Agreement and neither the
Rights Agent nor the Company shall have any liability to any holder of Class A
Rights or other Person on account of such failure or omission.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to the transfer agent of the Class A Common Stock by
registered or certified mail, and, subsequent to the Distribution Date, to the
holders of the Class A Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
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writing, mailed to the Rights Agent, to the transfer agent of the Class A Common
Stock by registered or certified mail, and, subsequent to the Distribution Date,
to the holders of the Class A Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Class A Rights Certificate (who shall, with such notice, submit
such holder's Class A Rights Certificate for inspection by the Company), then
the registered holder of any Class A Rights Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States, the State of New York or the State of Vermont (or of any other State of
the United States so long as such corporation is authorized to do business as a
banking institution in the State of New York or the State of Vermont, in good
standing, having an office designated for such purpose in the State of New York
or the State of Vermont, which is authorized under such laws to exercise
corporate trust and/or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose; and,
except as the context herein otherwise requires, such successor Rights Agent
shall be deemed to be the "Rights Agent" for all purposes of this Agreement. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and the transfer
agent of the Class A Common Stock, and mail a notice thereof in writing to the
registered holders of the Class A Rights Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Class A Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Class
A Rights to the contrary, the Company may, at its option, issue new Class A
Rights Certificates evidencing Class A Rights in such form as may be approved by
the Board to reflect any adjustment or change in the Purchase Price per share
and the number or kind or class of shares of stock or other securities or
property purchasable under the Class A Rights Certificates made in accordance
with the provisions of this Agreement. In addition, following the Distribution
Date and prior to the redemption or expiration of the Class A Rights, the
Company shall issue Class A Rights Certificates representing the appropriate
number of Class A Rights in connection with (i) the conversion of Class B Rights
Certificates into Class A Rights Certificates pursuant to
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the last sentence of Section 6(a) of the Class B Rights Agreement or (ii) the
conversion of all Class B Rights Certificates into Class A Rights Certificates
pursuant to Section 7(g) of the Class B Rights Agreement. In addition, in
connection with the issuance or sale by the Company of shares of Class A Common
Stock following the Distribution Date and prior to the redemption or expiration
of the Class A Rights, the Company (a) shall, with respect to shares of Class A
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board, issue Class A
Rights Certificates representing the appropriate number of Class A Rights in
connection with such issuance or sale; provided, however, that (i) no such Class
A Rights evidenced by a Class A Rights Certificate shall be issued if, and to
the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Class A Rights would be issued, and (ii) no
such Class A Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
The Company, may, at its option, upon the affirmative vote or written
consent of not less than a majority of the Board then in office, at any time
prior to the earlier of (i) the Distribution Date or (ii) the Close of Business
on the Expiration Date, redeem all (but not less than all) of the then
outstanding Class A Rights at a redemption price of $.01 per Class A Right,
appropriately adjusted to reflect any stock split, stock dividend, combination
of shares, or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"). The
Company may, at its option, pay the Redemption Price in cash, Common Stock
(based on the Current Market Price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the
majority of the Board then in office. Immediately upon the taking of such action
ordering the redemption of all of the Class A Rights, evidence of which shall
have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Class A Rights so redeemed will
terminate and the only right thereafter of the holders of such Class A Rights so
redeemed shall be to receive the Redemption Price (without the payment of any
interest thereon). Within 10 days after such action ordering the redemption of
all of the Class A Rights, the Company shall give notice of such redemption to
the holders of the then outstanding Class A Rights by mailing such notice to all
such holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Class A Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price shall be made.
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Section 24. Exchange.
(a) The Board, by majority vote of the Directors then in office, may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Class A Rights for shares of
Class A Common Stock at an exchange ratio of one share of Class A Common Stock
per Class A Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio, as the same may be adjusted from time to time, being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall not
be empowered to effect such exchange at any time after any Person (other than
(i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit
plan of the Company or of any such Subsidiary, or (iv) any entity holding Common
Stock for or pursuant to the terms of any such plan), together with all
Affiliates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of
any Class A Rights pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Class A Rights
shall terminate and the only right thereafter of a holder of such Class A Rights
shall be to receive that number of shares of Class A Common Stock equal to the
number of such Class A Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Class A Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
shall state the method by which the exchange of the Class A Common Stock for
Class A Rights shall be effected and, in the event of any partial exchange, the
number of Class A Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Class A Rights (other than Class A
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Class A Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Class A Common Stock Equivalents for shares of
Class A Common Stock exchangeable for Rights.
(d) In the event that there shall not be sufficient shares of Class A
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Class A Rights as contemplated in accordance with this Section 24,
the Company shall take all such action as may be necessary to authorize
additional Class A Common Stock for issuance upon exchange of the Class A
Rights.
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(e) The Company shall not be required to issue fractions of shares of
Class A Common Stock or to distribute certificates which evidence fractional
shares of Class A Common Stock. In lieu of such fractional shares of Class A
Common Stock, the Company shall pay to each registered holder of a Class A Right
Certificate with regard to which a fractional share of Class A Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Class A Common Stock. For the purposes
of this paragraph (e), the current market value of a whole share of Class A
Common Stock shall be the Closing Price of a share of Class A Common Stock (as
determined pursuant to Section 11(d) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Proposed Actions.
In case the Company shall after the Distribution Date propose (a) to pay
any dividend payable in stock of any class to the holders of its Class A Common
Stock or to make any other distribution to the holders of its Class A Common
Stock (other than a cash dividend out of earnings or the retained earnings of
the Company), or (b) to offer to the holders of its Class A Common Stock rights
or warrants to subscribe for or to purchase any additional shares of Class A
Common Stock or shares of stock of any other class or any other securities,
rights, or options, or (c) to effect any reclassification of the Class A Common
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Class A Common Stock), or (d) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 25% of (i) the
assets of the Company and its Subsidiaries (taken at net asset value as stated
on the books of the Company and determined on a consolidated basis in accordance
with generally accepted accounting principles consistently applied) or (ii) the
earning power of the Company and its Subsidiaries (determined on a consolidated
basis in accordance with generally accepted accounting principles consistently
applied) to any other Person or Persons, or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and each holder of a Class A Right, in accordance
with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of Class A Common Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least twenty days prior to the
record date for determining holders of the Class A Common Stock for purposes of
such action, and in the case of any such other action, at least twenty days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Class A Common Stock whichever shall be
the earlier. The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
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In case any Common Stock Event described in Section 11(a)(ii) hereof
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and each holder of a Class A Rights
Certificate, in accordance with Section 26 hereof, a notice of the occurrence of
such Common Stock Event, which shall specify such event and the consequences of
the event to holders of Class A Rights under Section 11(a)(ii) hereof.
Notwithstanding anything in this Agreement to the contrary, prior to the
Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Class A Rights, for purposes of this Agreement and no
other notice need be given.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Class A Rights Certificate to the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Ben & Jerry's Homemade, Inc.
30 Community Drive
South Burlington, VT 05403-6828
Attn: Chief Executive Officer
Copy to: Ropes & Gray
One International Place
Boston, MA 02110-2624
Attn: Howard K. Fuguet, Esq.
Subject to the provisions of Sections 19 and 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Class A Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer Trust Company
40 Wall Street
New York, NY 10005
(Ben & Jerry's Homemade, Inc. Class A Rights Agreement)
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Class A Rights Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
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Section 27. Supplements and Amendments.
Prior to the Distribution Date, the Board, upon the vote of a majority
of the Board then in office, may from time to time supplement or amend this
Agreement without the approval of any holders of the Class A Rights. From and
after the Distribution Date, the Board may, upon the vote of a majority of the
Board then in office, from time to time amend this Agreement without the
approval of any holders of the Class A Rights in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
change any time period governing redemption of the Class A Rights or any other
time period or (iv) to make any other provisions in regard to matters or
questions arising hereunder which the Board, upon the vote of a majority of the
Board then in office, may deem necessary or desirable and which shall not
adversely affect the interests of the holders of the Class A Rights (other than
any Acquiring Person or Disqualified Transferee or any Affiliate of an Acquiring
Person or Disqualified Transferee). The Rights Agent shall join with the Company
in the execution and delivery of any such supplement or amendment, unless such
supplement or amendment affects any of the rights, duties, or obligations of the
Rights Agent hereunder, in which case the Rights Agent may, but shall not be
required to, join in such execution and delivery.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit
of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board; etc.
The Board 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 and with the
concurrence of a majority of the Board then in office shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Class A Rights and all other parties and (y) not subject any Director to any
liability to the holders of the Class A Rights.
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Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent, and the registered holders of the Class A
Rights (and, prior to the Distribution Date, the associated shares of Class A
Common Stock) any legal or equitable right, remedy, or claim under this
Agreement or the Class A Rights; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent, and the registered holders
of the Class A Rights (and, prior to the Distribution Date, the associated Class
A Common Stock).
Section 31. Severability.
The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth day following the date of such determination by
the Board.
Section 32. Governing Law.
This Agreement and each Class A Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Vermont and
for all purposes shall be governed by and construed in accordance with the laws
of said State applicable to contracts to be made and performed entirely within
said State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and set their respective hands and seals, all as of the day and
year first above written.
BEN & JERRY'S HOMEMADE, INC.
By: _______________________________
Title: President and
Chief Executive Officer
Attest:
By: ______________________________
Title:
AMERICAN STOCK TRANSFER TRUST COMPANY
By: ______________________________
Title:
Attest:
By: _______________________________
Title:
-40-
EXHIBIT A
FORM OF CLASS A RIGHTS CERTIFICATE
Certificate No. R- _______ Class A Rights
NOT EXERCISABLE AFTER JULY 30, 2008 OR EARLIER IF ORDER OF REDEMPTION IS GIVEN.
THE CLASS A RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER CLASS A RIGHT ON THE TERMS SET FORTH IN THE CLASS A RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, CLASS A RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES AND ASSOCIATES) OF AN
ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE CLASS A RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH CLASS A RIGHTS MAY BECOME NULL AND VOID. THE
CLASS A RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A
HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE ISSUANCE TO
SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE CLASS A RIGHTS IN SUCH
JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE CLASS A RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES AND
ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE CLASS A
RIGHTS AGREEMENT). ACCORDINGLY, THIS CLASS A RIGHTS CERTIFICATE AND THE CLASS A
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE CLASS A RIGHTS AGREEMENT.]*
Class A Rights Certificate
BEN & JERRY'S HOMEMADE, INC.
This certifies that , or registered
assigns, is the registered owner of the number of Class A Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions, and conditions of the Class A Rights Agreement dated as of July 30,
1998 (the "Class A Rights Agreement") between Ben &
- --------
* The portion of the legend in brackets shall be inserted only if applicable.
A-1
<PAGE>
Jerry's Homemade, Inc. (the "Company"), and American Stock Transfer Trust
Company (the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Class A Rights Agreement) and
prior to 5:00 p.m. (Burlington, Vermont time) on July 30, 2008 (the "Expiration
Date") at the office of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one share of Class A Common Stock, with a par value
of $.033 per share ("Class A Common Stock"), of the Company per each Class A
Right represented hereby, at a purchase price of $80.00 per share (the "Purchase
Price") upon presentation and surrender of this Class A Rights Certificate with
the Form of Election to Purchase set forth on the reverse side hereof and the
certificate contained therein duly completed and executed, accompanied by a
signature guarantee and such other documentation as the Rights Agent may
reasonably request. The number of Class A Rights evidenced by this Class A
Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of July 30, 1998 based on the shares
of Class A Common Stock of the Company as constituted at such date.
As more fully set forth in the Class A Rights Agreement, upon the
occurrence of a Common Stock Event (as such term is defined in the Class A
Rights Agreement), if the Class A Rights evidenced by this Class A Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate of
an Acquiring Person (as each such term is defined in the Class A Rights
Agreement) or (ii) a Disqualified Transferee (as defined in the Class A Rights
Agreement), such Class A Rights shall automatically become null and void and no
holder hereof shall have any right with respect to such Class A Rights from and
after the occurrence of such Common Stock Event.
The Class A Rights evidenced by this Class A Rights Certificate shall
not be exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such holder,
or the exercise by such holder, of the Class A Rights in such jurisdiction shall
not have been obtained or be obtainable.
As provided in the Class A Rights Agreement, the Purchase Price, and the
number and type of securities which may be purchased upon the exercise of the
Class A Rights evidenced by this Class A Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
In the circumstances described in Section 13 of the Class A Rights
Agreement, the securities issuable upon the exercise of the Class A Rights
evidenced hereby shall be the common stock or similar equity securities or
equity interests of an entity other than the Company.
This Class A Rights Certificate is subject to all of the terms,
provisions, and conditions of the Class A Rights Agreement, which terms,
provisions, and conditions are hereby incorporated herein by reference and made
a part hereof and to which Class A Rights
A-2
<PAGE>
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 Class A Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Class A Rights under the specific circumstances set forth
in the Class A Rights Agreement. Copies of the Class A Rights Agreement are on
file at the office of the Rights Agent designated for such purpose and may be
obtained by the holder of any Class A Rights upon written request to the Rights
Agent.
This Class A Rights Certificate, with or without other Class A Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, accompanied by a signature guarantee and such other documentation
as the Rights Agent designated for such purpose may reasonably request, may be
exchanged for another Class A Rights Certificate or Class A Rights Certificates
of like tenor and date evidencing Class A Rights entitling the holder to
purchase a like aggregate number of shares of Class A Common Stock (or other
consideration, as the case may be) as the Class A Rights evidenced by the Class
A Rights Certificate or Class A Rights Certificates surrendered shall have
entitled such holder to purchase. If this Class A Rights Certificate shall be
exercised in part, the holder shall be entitled to receive, upon surrender
hereof, another Class A Rights Certificate or Class A Rights Certificates for
the number of whole Class A Rights not exercised.
Subject to the provisions of the Class A Rights Agreement, the Class A
Rights evidenced by this Class A Rights Certificate may be redeemed by the
Company by a majority vote of the Board (as defined in the Class A Rights
Agreement) then in office at any time prior to the earlier of the Distribution
Date or the Expiration Date, at a redemption price of $.01 per Class A Right
(which amount is subject to adjustment as provided in the Class A Rights
Agreement). In addition, in certain circumstances, the Rights may be exchanged,
in whole or in part, for shares of Class A Common Stock. Immediately upon the
action of the Board ordering the exchange of any Rights and without any further
action and without any notice, the right to exercise such Rights will terminate
and the only right thereafter of a holder of such Rights will be to receive that
number of shares of Class A Common Stock issuable upon the exchange.
The Company is not obligated to issue whole or fractional shares of
Class A Common Stock (or other securities) upon the exercise of any Class A
Right or Class A Rights evidenced hereby, but in lieu thereof a cash payment may
be made at the election of the Company, as provided in the Class A Rights
Agreement.
No holder of this Class A Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of Class A
Common Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Class A
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting
A-3
<PAGE>
thereof, or to give or withhold consent to any action by the Company, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Class A Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Class A Right or Class A Rights
evidenced by this Class A Rights Certificate shall have been exercised as
provided in the Class A Rights Agreement.
This Class A Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
A-4
<PAGE>
WITNESS the facsimile signature of the proper officers and the seal of
the Company. Dated as of August 14, 1998.
BEN & JERRY'S HOMEMADE, INC.
By _________________________________
Title:
ATTEST:
_______________________________
Title:
Countersigned:
_______________________________
AMERICAN STOCK TRANSFER TRUST
COMPANY
By_____________________________
Authorized Signatory
Date of Countersignature:
A-5
<PAGE>
[Form of Reverse Side of Class A Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Class A Rights Certificate)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto ______________________
_____________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________ whose
social security or tax identification number is: ______________ the Class A
Rights evidenced by this Class A Rights Certificate, together with all right,
title and interest herein, and does hereby irrevocably constitute and appoint
____________________ Attorney, to transfer the within Class A Rights Certificate
on the books of the within-named Company, with full power of substitution.
Dated: _________________________, ____.
_______________________________
Signature
Signature Guaranteed:*
- --------
* Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantees medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
A-6
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Class A Rights evidenced by this Class A Rights Certificate [ ]
are [ ] are not being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate of an Acquiring Person (as
each such term is defined in the Class A Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Class A Rights evidenced by this Class A Rights
Certificate after the occurrence of a Common Stock Event from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate of an Acquiring
Person.
Dated:____________________ ______________________________________
Signature
Signature Guaranteed:*
____________________________
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Class A Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
A-7
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Class A Rights Certificate)
Ben & Jerry's Homemade, Inc.
The undersigned hereby irrevocably elects to exercise _________________
Class A Rights represented by this Class A Rights Certificate to purchase the
number of shares of Class A Common Stock (or other securities) issuable upon the
exercise of such Class A Rights and requests that certificates for such shares
be issued in the name of:
Please insert social security
or other identifying number ________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Class A Rights shall not be all the Class A Rights evidenced
by this Class A Rights Certificate, a new Class A Rights Certificate for the
balance remaining of such Class A Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number ________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: _______________________, ____
_______________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Class
A Rights Certificate)
Signature Guaranteed:**
- --------
** Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
A-8
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Class A Rights evidenced by this Class A Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate of any such Acquiring Person (as each such term
is defined in the Class A Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Class A Rights evidenced by this Class A Rights
Certificate after the occurrence of a Common Stock Event (as such term is
defined in the Class A Rights Agreement) from any Person who is, was, or
subsequently became an Acquiring Person or an Affiliate of an Acquiring Person.
Dated: _________________, ____ _________________________
Signature
Signature Guaranteed:***
__________________________
- --------
*** Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
A-9
EXHIBIT B
BEN & JERRY'S HOMEMADE, INC.
SUMMARY OF CLASS A PURCHASE RIGHTS
On July 30, 1998, the Board of Directors (the "Board") of Ben & Jerry's
Homemade, Inc. (the "Company") declared a dividend of one Class A purchase right
(a "Class A Right") for every outstanding share of the Company's Class A Common
Stock, $.033 par value per share (the "Class A Common Stock"). The Class A
Rights will be distributed on August 14, 1998 to stockholders of record as of
the close of business on August 14, 1998 (the "Dividend Record Date"). The terms
of the Class A Rights are set forth in a Class A Rights Agreement dated as of
July 30, 1998 (the "Class A Rights Agreement") between the Company and American
Stock Transfer Trust Company (the "Rights Agent"). The Class A Rights Agreement
provides for the issuance of one Class A Right for every share of Class A Common
Stock issued and outstanding on the Dividend Record Date and for each share of
Class A Common Stock which is issued or sold after that date and prior to the
"Distribution Date" (as defined below). A similar rights agreement has been
adopted for holders of the Company's Class B Common Stock, $.033 par value per
share (the "Class B Common Stock").
Each Class A Right entitles the holder to purchase from the Company one
share of Class A Common Stock at a price of $80.00 per share, subject to
adjustment. The Class A Rights will expire on July 30, 2008 (the "Expiration
Date"), or upon the earlier redemption of the Class A Rights, and are not
exercisable until the Distribution Date.
No separate certificates representing the Class A Rights will be issued
at the present time. Until the Distribution Date (or earlier redemption or
expiration of the Class A Rights), (i) the Class A Rights will be evidenced by
the Class A Common Stock certificates and will be transferred with and only with
such Class A Common Stock certificates, (ii) new Class A Common Stock
certificates issued after the Dividend Record Date upon transfer or new issuance
of the Company's Class A Common Stock will contain a notation incorporating the
Class A Rights Agreement by reference and (iii) the surrender for transfer of
any of the Company's Class A Common Stock certificates will also constitute the
transfer of the Class A Rights associated with the Class A Common Stock
represented by such certificate.
The Class A Rights will separate from the Class A Common Stock and
certificates representing the Class A Rights will be issued on the Distribution
Date. Unless otherwise determined by a majority of the Board then in office, the
Distribution Date will occur on the earlier of (i) the tenth business day
following the later of (A) the date of a public announcement that a person,
including affiliates or associates of such person (an "Acquiring Person"),
except as described below, has acquired or obtained the right to acquire,
beneficial ownership of 15%
B-1
<PAGE>
or more of the outstanding shares of Class A Common Stock and Class B Common
Stock, taken as a whole (collectively, the "Common Stock") or (B) the date on
which an executive officer of the Company has actual knowledge that an Acquiring
Person became such (the later being, the "Stock Acquisition Date") or (ii) the
tenth business day following commencement of a tender offer or exchange offer
that would result in any person, together with its affiliates and associates
owning 15% or more of the Company's outstanding Common Stock. In any event, the
Board of Directors may delay the distribution of the certificates. After the
Distribution Date, separate certificates evidencing the Class A Rights ("Class A
Rights Certificates") will be mailed to holders of record of the Company's Class
A Common Stock as of the close of business on the Distribution Date and
thereafter, such separate Class A Rights Certificates alone will evidence the
Class A Rights.
If, at any time after the Board declares the Class A Rights dividend,
any person or group of affiliated or associated persons (other than the Company
and its affiliates) shall become an Acquiring Person, each holder of a Class A
Right will have the right to receive shares of the Company's Class A Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a market value of two times the exercise price of the Class A
Right. For example, if the exercise price is $80.00, the holder of each Class A
Right would be entitled to receive $160.00 in market value of the Company's
Class A Common Stock for $80.00. Also, in the event that at any time after the
Stock Acquisition Date, the Company was acquired in a merger or other business
combination, or if more than 25% of its assets or earning power was sold, each
holder of a Class A Right would have the right to exercise such Class A Right
and thereby receive common stock of the acquiring company with a market value of
two times the exercise price of the Class A Right. Thus, if the exercise price
is $80.00, the holder of each Class A Right would be entitled to receive $160.00
in market value of the acquiring company's common stock upon payment of the
$80.00. Following the occurrence of any of the events described in this
paragraph, any Class A Rights that are, or (under certain circumstances
specified in the Class A Rights Agreement) were, beneficially owned by any
Acquiring Person or Disqualified Transferee shall immediately become null and
void.
The Board may, at its option, at any time after any person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Class A Rights for shares of Class A Common Stock (or, other securities of the
Company equivalent in value to such shares of Class A Common Stock) at an
exchange ratio of one share of Class A Common Stock (or other such
consideration) per Class A Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date of
declaration of the Class A Rights dividend (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). The Board, however, may not
effect an exchange at any time after any person (other than (i) the Company,
(ii) any subsidiary of the Company, (iii) any employee benefit plan of the
Company or any such subsidiary or any entity holding Common Stock for or
pursuant to the terms of any such plan), together with all affiliates of such
person, becomes the beneficial
B-2
<PAGE>
owner of 50% or more of the Common Stock then outstanding. Immediately upon the
action of the Board ordering the exchange of any Class A Rights and without any
further action and without any notice, the right to exercise such Class A Rights
will terminate and the only right thereafter of a holder of such Class A Rights
will be to receive that number of shares of Class A Common Stock equal to the
number of such Class A Rights held by the holder multiplied by the Exchange
Ratio.
The exercise price of the Class A Rights, and the number of shares of
Class A Common Stock or other consideration issuable upon exercise of the Class
A Rights, are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Class A Common Stock, (ii) upon the grant to holders of
the Class A Common Stock of certain rights or warrants to subscribe for shares
of the Class A Common Stock or convertible securities at less than the current
market price of the Class A Common Stock or (iii) upon the distribution to
holders of the Class A Common Stock of evidences of indebtedness or assets
(excluding cash dividends paid out of the earnings or retained earnings of the
Company and certain other distributions) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustments in the exercise price of the
Class A Rights will be required until cumulative adjustments equal at least 1%
in such price.
At any time prior to the earlier of (i) the Distribution Date or (ii)
the close of business ten years after the Class A Rights Agreement becomes
effective (the "Expiration Date"), the Company, by a majority vote of the Board
then in office, may redeem the Class A Rights at a redemption price of $.01 per
Class A Right (the "Redemption Price"), as described in the Class A Rights
Agreement. Immediately upon the action of the Board electing to redeem the Class
A Rights, the right to exercise the Class A Rights will terminate and the only
right of the holders of Class A Rights will be to receive the Redemption Price.
Until a Class A Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
Neither the distribution of the Class A Rights nor the subsequent
separation of the Class A Rights on the Distribution Date will be a taxable
event for the Company or its stockholders. Holders of Class A Rights may,
depending upon the circumstances, recognize taxable income upon the occurrence
of certain Class A Rights triggering events including a tender offer for 15% or
more of the Common Stock or a person or group attaining beneficial ownership of
15% or more of the Common Stock (collectively, "Common Stock Events"). In
addition, holders of Class A Rights may have taxable income as a result of (i)
an exchange by the Company of shares of Class A Common Stock for Class A Rights
as described above or (ii)
B-3
<PAGE>
certain anti-dilution adjustments made to the terms of the Class A Rights after
the Distribution Date. A redemption of the Class A Rights would be a taxable
event to holders.
The Class A Rights Agreement may be amended by the Board at any time
prior to the Distribution Date without the approval of the holders of the Class
A Rights. From and after the Distribution Date, the Class A Rights Agreement may
be amended by the Board without the approval of the holders of the Class A
Rights in order to cure any ambiguity, to correct any defective or inconsistent
provisions, to change any time period for redemption or any other time period
under the Class A Rights Agreement or to make any other changes that do not
adversely affect the interests of the holders of the Class A Rights (other than
any Acquiring Person or its affiliates or associates or their transferees).
A copy of the Class A Rights Agreement will be filed with the Securities
and Exchange Commission as an Exhibit to the Company's Form 8-A registration
statement with respect to the Class A Rights. A copy of the Class A Rights
Agreement is available free of charge from the Rights Agent, at the following
address:
American Stock Transfer Trust Company
40 Wall Street
New York, NY 10005
(Ben & Jerry's Homemade, Inc. Class A Rights Agreement)
This summary description of the Class A Rights does not purport to be complete
and is qualified in its entirety by reference to the Class A Rights Agreement,
which is incorporated herein by reference.
B-4
- --------------------------------------------------------------------------------
BEN & JERRY'S HOMEMADE, INC.
and
AMERICAN STOCK TRANSFER TRUST COMPANY
as Rights Agent
-------------
Class B Rights Agreement
Dated as of July 30, 1998
- --------------------------------------------------------------------------------
<PAGE>
Table of Contents
<TABLE>
<S> <C> <C>
Section 1. Certain Definitions..............................................................1
Section 2. Appointment of Rights Agent......................................................6
Section 3. Issuance of Class B Rights Certificates..........................................7
Section 4. Form of Class B Rights Certificates..............................................9
Section 5. Countersignature and Registration................................................9
Section 6. Transfer, Split Up, Combination and Exchange of Class B Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Class B Rights Certificates.........10
Section 7. Exercise of Class B Rights; Purchase Price; Expiration Date of Class B Rights...11
Section 8. Cancellation and Destruction of Class B Rights Certificates.....................13
Section 9. Reservation and Availability of Shares of Class B Common Stock; Other
Covenants....................................................................14
Section 10. Class B Common Stock Record Date; Etc..........................................15
Section 11. Antidilution Adjustments.......................................................16
Section 12. Certificate of Adjustments.....................................................25
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........25
Section 14. Fractional Class B Rights and Fractional Shares................................27
Section 15. Rights of Action...............................................................28
Section 16. Agreement of Class B Rights Holders............................................28
Section 17. Class B Rights Certificate Holder Not Deemed a Stockholder.....................29
Section 18. Concerning the Rights Agent....................................................30
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................30
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C> <C>
Section 20. Duties of Rights Agent.........................................................31
Section 21. Change of Rights Agent.........................................................33
Section 22. Issuance of New Class B Rights Certificates....................................34
Section 23. Redemption and Termination.....................................................35
Section 24. Exchange.......................................................................35
Section 25. Notice of Proposed Actions.....................................................36
Section 26. Notices........................................................................37
Section 27. Supplements and Amendments.....................................................38
Section 28. Successors.....................................................................39
Section 29. Determinations and Actions by the Board; etc...................................39
Section 30. Benefits of this Agreement.....................................................39
Section 31. Severability...................................................................39
Section 32. Governing Law..................................................................40
Section 33. Counterparts...................................................................40
Section 34. Descriptive Headings...........................................................40
</TABLE>
-ii-
<PAGE>
CLASS B RIGHTS AGREEMENT
This Class B Rights Agreement (the "Agreement") dated as of July 30,
1998 is between Ben & Jerry's Homemade, Inc., a Vermont corporation (the
"Company") and American Stock Transfer Trust Company, as rights agent (the
"Rights Agent").
W I T N E S S E T H:
WHEREAS, on July 30, 1998 the Board of Directors of the Company (the
"Board") authorized the issuance of rights (collectively, the "Class B Rights,"
and individually a "Class B Right"), each Class B Right being a right to
purchase, on the terms and subject to the provisions of this Agreement, one
share of the Company's Class B Common Stock; and
WHEREAS, on July 30, 1998 (the "Declaration Date") the Board (a)
authorized and declared a dividend distribution of one Class B Right for every
share of Class B Common Stock of the Company outstanding at the Close of
Business on August 14, 1998 (the "Dividend Record Date"), and (b) authorized the
issuance of, and agreed to issue, one Class B Right (as such number may be
adjusted in accordance with Section 11(i) or 11(p) hereof) for every share of
Class B Common Stock of the Company issued between the Dividend Record Date and
the Distribution Date (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates of such Person, shall be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, (iv) any Person organized,
appointed, or established by the Company or a Subsidiary of the Company pursuant
to the terms of any plan described in clause (iii) above or (v) any such Person
who has reported or is required to report such ownership on Schedule 13G under
the Exchange Act (or any comparable or successor report) or on Schedule 13D
under the Exchange Act (or any comparable or successor report) which Schedule
13D does not state any intention to or reserve the right to control or influence
the management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the Common
Stock) and, within 10 Business Days of being requested by the Company to advise
it regarding the same, certifies to the Company that such Person acquired shares
of Common Stock in excess of 14.9% inadvertently or without knowledge of the
terms
<PAGE>
of the Class B Rights and who, together with all of such Person's Affiliates,
thereafter does not acquire additional shares of Common Stock while the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding,
provided, however, that if the Person requested to so certify fails to do so
within 10 Business Days, then such Person shall become an Acquiring Person
immediately after such 10 Business Day Period.
(b) "Act" shall mean the Securities Act of 1933 (or any successor act),
as amended and as may from time to time be in effect.
(c) "Affiliate," with respect to any Person, shall mean any other Person
who is, or who would be deemed to be, an "affiliate" or an "associate" of such
Person within the respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as such Rule is in
effect on the Declaration Date; provided, that no Person shall be deemed an
affiliate of another Person solely as a result of such Persons' status as
directors of the Company.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own" or have "Beneficial Ownership" of, any securities:
(i) which such Person or any of such Person's Affiliates has
"beneficial ownership" of within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, as such Rule is in
effect on the Declaration Date;
(ii) which such Person or any of such Person's Affiliates has,
directly or indirectly, the right to acquire (whether such right is
exercisable immediately or after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion, exchange or other rights, warrants or
options, or otherwise;
(iii) which such Person or any of such Person's Affiliates has,
directly or indirectly, the right to vote or dispose of, including
pursuant to any agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security for
purposes of this Section 1(d)(iii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable proxy solicitation
rules and regulations promulgated under the Exchange Act or (B) is made
in connection with, or is to otherwise participate in, a proxy or
consent solicitation made, or to be made, pursuant to, and in accordance
with, the applicable proxy solicitation rules and regulations
promulgated under the Exchange Act, in either case described in clause
(A) or (B) above, whether or not such agreement, arrangement
-2-
<PAGE>
or understanding is also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report); or
(iv) which are beneficially owned, directly or indirectly, by any
other Person or any Affiliate thereof with which such Person or any of
such Person's Affiliates has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or in connection with a
proxy or consent solicitation described in clause (A) or (B) of the
proviso to Section 1(d)(iii) hereof) or disposing of any securities of
the Company;
provided, however, that for purposes of this Section 1(d) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates until such tendered securities are accepted for
purchase or exchange, (B) securities issuable upon exercise of Class B Rights at
any time prior to the occurrence of a Common Stock Event, or (C) securities
issuable upon exercise of Class B Rights which were held by a Person or its
Affiliates prior to the Distribution Date as long as such Person is not
responsible for the occurrence of the Common Stock Event giving rise to the
Distribution Date; and provided, further, however, that nothing in this Section
1(d) shall cause a Person engaged in business as an underwriter of securities to
be the "Beneficial Owner" of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such acquisition.
(e) "Board" shall have the meaning set forth in the preamble to this
Agreement.
(f) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Vermont or the city in which
the principal office of the Rights Agent is located are authorized or obligated
by law or executive order to close.
(g) "Class A Common Stock" shall mean the Class A Common Stock, par
value $.033 per share, of the Company.
(h) "Class A Rights Agreement" shall mean the Class A Rights Agreement
dated as of July 30, 1998 between the Company and American Stock Transfer Trust
Company, as Rights Agent.
(i) "Class B Common Stock" shall mean the Class B Common Stock, par
value $.033 per share, of the Company.
(j) "Class B Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
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(k) "Class B Rights" shall have the meaning set forth in the preamble to
this Agreement.
(l) "Class B Rights Certificates" shall have the meaning set forth in
Section 3(a) hereof.
(m) "Close of Business" on any given date shall mean 5:00 p.m.,
Burlington, Vermont time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 p.m., Burlington, Vermont time, on the
next succeeding Business Day.
(n) "Closing Price" shall have the meaning set forth in Section 11(d)
hereof.
(o) "Common Stock" shall mean collectively, the Class A Common Stock and
the Class B Common Stock of the Company, except that "Common Stock" when used
with respect to any Person other than the Company shall mean either (i) the
common stock (or other capital stock or shares of beneficial interest) of such
Person with the greatest voting power, or (ii) the equity securities or other
equity interests having power to control or direct the management and affairs of
such Person, or (iii) if such Person is a Subsidiary of another Person, the
Person (A) who ultimately controls such Person that is the Subsidiary and (B)
which has outstanding such common stock (or such other capital stock, equity
securities or interests).
(p) "Common Stock Event" shall mean the occurrence of any event
described in (i) Section 11(a)(ii) hereof or (ii) clause (a), (b) or (c) of the
first sentence of Section 13 hereof.
(q) "Company" shall have the meaning set forth in the preamble to this
Agreement.
(r) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(s) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(t) "Declaration Date" shall have the meaning set forth in the preamble
to this Agreement.
(u) "Directors" shall mean the members of the Board.
(v) "Disqualified Transferee" shall mean any Person who is a direct or
indirect transferee of any Class B Right from an Acquiring Person or an
Affiliate of an Acquiring Person and became such a transferee (x) after the
occurrence of a Common Stock Event or (y) prior to or concurrently with the
Acquiring Person becoming such and received such Class B Right pursuant to a
transfer (whether or not for value) (A) from the Acquiring Person to holders of
its Common Stock or other equity securities or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement, or understanding
(whether or
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not in writing) regarding the transferred Class B Right, or (B) which a majority
of the Board then in office reasonably determines is part of a plan,
arrangement, or understanding (whether or not in writing) which has as a primary
purpose or effect, the avoidance of Section 7(e) hereof.
(w) "Distribution Date" shall mean the date which is the later of (A)
the earlier of (x) the 10th Business Day following the Stock Acquisition Date or
(y) the 10th Business Day following the Offer Commencement Date or (B) such
specified or unspecified date thereafter which is on or after the Dividend
Record Date, as may be determined by a majority of the Board then in office.
(x) "Dividend Record Date" shall have the meaning set forth in the
preamble to this Agreement.
(y) "Excess Amount" shall have the meaning set forth in Section
11(a)(iii) hereof.
(z) "Exchange Act" shall mean the Securities Exchange Act of 1934 (or
any successor act), as in effect on the Declaration Date.
(aa) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(bb) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(cc) "Offer Commencement Date" shall mean the date of the commencement
by any Person, other than (i) the Company, (ii) a Subsidiary of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the
Company or (iv) any Person organized, appointed, or established by the Company
or such Subsidiary pursuant to the terms of any such plan, of a tender or
exchange offer (including when such offer is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and Regulations under
the Exchange Act) if upon consummation thereof the Person and Affiliates thereof
would be the Beneficial Owner of 15% or more of the then outstanding shares of
Common Stock (including any such date which is after the date of this Agreement
and prior to the issuance of the Class B Rights on the Dividend Record Date or
thereafter).
(dd) "Officers' Certificate" has the meaning set forth in Section 20(b)
hereof.
(ee) "Other Consideration" has the meaning set forth in Section 6(a)
hereof.
(ff) "Permitted Transferee" shall have the meaning set forth in
paragraph 4 of Section A of the Company's Articles of Incorporation as in effect
from time to time.
(gg) "Person" shall mean a corporation, association, partnership, joint
venture, trust, limited liability company, estate, organization, business,
entity or individual.
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(hh) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.
(ii) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(jj) "Rights" shall have the meaning set forth in the preamble to this
Agreement.
(kk) "Rights Agent" shall have the meaning set forth in the preamble to
this Agreement subject to the appointment of a successor Rights Agent pursuant
to Section 21 hereof.
(ll) "Stock Acquisition Date" shall mean the later of (i) the date of
the first public announcement by an Acquiring Person or the Company that an
Acquiring Person has become such (including the first date on which any filing
with any governmental authority disclosing that an Acquiring Person has become
such becomes available to the public), or (ii) the date on which an executive
officer of the Company has actual knowledge that an Acquiring Person has become
such.
(mm) "Subsidiary" shall mean, as of any date, any Person of which the
Company (or other specified parent) owns directly, or indirectly through a
Subsidiary or Subsidiaries, at least a majority of the outstanding capital stock
(or other shares of beneficial interest) entitled to vote generally, or holds
directly, or indirectly through a Subsidiary or Subsidiaries, at least a
majority of partnership or similar interests, or is a general partner or of
which the Company (or other specified parent) owns voting securities sufficient
to elect at least a majority of the directors of such Person.
(nn) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(oo) "Summary of Class B Rights" shall have the meaning set forth in
Section 3(b) hereof.
(pp) "Trading Day" shall mean a day on which the principal national
securities exchange on which such security is listed or admitted to trading is
open for the transaction of business or, if such security is not listed or
admitted to trading on any national securities exchange, a day which is a
Business Day.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Class B Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of the Class B
Common Stock) in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time, upon
prior written notice to the Rights Agent, appoint such
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Co-Rights Agents as it may deem necessary or desirable and the respective duties
of the Rights Agent and the Co-Rights Agent shall be as the Company shall
determine..
Section 3. Issuance of Class B Rights Certificates.
(a) Until the Distribution Date, (i) the Class B Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
representing shares of Class B Common Stock registered in the names of the
holders of the Class B Common Stock (which certificates shall be deemed also to
be certificates for the associated Class B Rights) and not by separate rights
certificates, and (ii) the Class B Rights will be transferable only in
connection with the transfer of the associated shares of Class B Common Stock,
subject to the limitations set forth in Section 3(d) hereof. As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Class B
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the stock transfer records of the Company, one
or more rights certificates, in substantially the form of Exhibit A hereto (the
"Class B Rights Certificates"), evidencing in the aggregate that number of Class
B Rights to which such holder is entitled in accordance with the provisions of
this Agreement. As of and after the Distribution Date, the Class B Rights will
be evidenced solely by such Class B Rights Certificates. The Class B Rights are
exercisable only in accordance with the provisions of Section 7 hereof and are
redeemable only in accordance with Section 23 hereof.
(b) As soon as practicable after the Dividend Record Date, the Company
will cause a copy of a Summary of Class B Rights, in substantially the form
attached hereto as Exhibit B (the "Summary of Class B Rights"), to be sent by
first-class, postage prepaid mail, to each record holder of the Class B Common
Stock as of the Close of Business on the Dividend Record Date, at the address of
such holder shown on the stock transfer records of the Company. With respect to
certificates for the Class B Common Stock outstanding as of the Dividend Record
Date, until the Distribution Date, the Class B Rights associated with the shares
of Class B Common Stock represented by such certificates will be evidenced by
such certificates for the Class B Common Stock and the registered holders of the
Class B Common Stock shall also be the registered holders of the associated
Class B Rights. Until the Distribution Date (or the earlier redemption,
expiration or termination of the Class B Rights) and subject to the limitations
set forth in Section 3(d) hereof, the surrender for transfer of any of the
certificates representing shares of the Class B Common Stock outstanding on the
Dividend Record Date, with or without a copy of the Summary of Class B Rights,
shall also constitute the transfer of the Class B Rights associated with the
Class B Common Stock represented by such certificate.
(c) Class B Rights shall be issued in respect of all shares of Class B
Common Stock issued (whether originally issued or delivered from the Company's
treasury) after the Dividend Record Date but prior to the earliest of (i) the
Distribution Date, (ii) the Expiration Date, or (iii) the redemption of the
Class B Rights. Certificates representing such shares of Class B
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Common Stock and, subject to the limitations set forth in Section 3(d) hereof,
certificates issued on transfer of such shares of Class B Common Stock, with or
without a copy of the Summary of Class B Rights, prior to the Distribution Date
(or earlier expiration or redemption of the Class B Rights) shall be deemed also
to be certificates for the associated Class B Rights, and commencing as soon as
reasonably practicable following the Dividend Record Date shall bear the
following legend (or a legend substantially in the form thereof):
This certificate also evidences and entitles the holder to Class B
Rights set forth in a Class B Rights Agreement between the issuer and
American Stock Transfer Trust Company, as Rights Agent (the "Rights
Agent"), dated as of July 30, 1998 (the "Class B Rights Agreement"), the
terms of which are incorporated herein by reference and a copy of which
is on file at the principal offices of both the issuer and the Rights
Agent. The Rights Agent will mail to the registered holder of this
certificate a copy of the Class B Rights Agreement, as in effect on the
date of mailing, without charge upon written request. Under certain
circumstances set forth in the Class B Rights Agreement, such Class B
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Under certain circumstances set forth in
the Class B Rights Agreement, Class B Rights issued to, or held by any
Person who is, was or becomes, or acquires shares from, an Acquiring
Person or any Affiliate of an Acquiring Person (as each such term is
defined in the Class B Rights Agreement and generally relating to the
ownership or purchase of large shareholdings), whether currently held by
or on behalf of such Person or Affiliate or by certain subsequent
holders, may become null and void. The Class B rights, when transferred
under certain circumstances set forth in the Class B Rights Agreement,
become Class A Rights governed by the Class A Rights Agreement.
Until the Distribution Date or the earlier redemption, expiration or termination
of the Class B Rights, the Class B Rights associated with the Class B Common
Stock shall be evidenced by the Class B Common Stock certificates alone and the
registered holders of Class B Common Stock shall also be the registered holders
of the associated Class B Rights, and, subject to the limitations set forth in
Section 3(d) hereof, the surrender for transfer of any of such certificates
shall also constitute the transfer of the Class B Rights associated with the
Class B Common Stock represented by such certificate. Rights shall be issued to
the extent provided in Section 22 hereof after the Distribution Date and prior
to the Expiration Date.
(d) Notwithstanding anything in this Agreement to the contrary, pursuant
to Section A.4.(a) of the Company's Articles of Incorporation, as in effect from
time to time, any purported transfer of shares of Class B Common Stock, other
than to a Permitted Transferee, shall be null and void and such purported
transfer by a holder of Class B Common Stock, other than to a Permitted
Transferee, will result in the immediate and automatic conversion of the shares
of Class B Common Stock of such holder into shares of Class A Common Stock. Upon
any such conversion of Class B Common Stock into Class A Common Stock prior to
the Distribution Date, the Class B Rights associated with such shares of Class B
Common Stock
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shall also be null and void and pursuant to Section 3(c) of the Class A Rights
Agreement, each share of Class A Common Stock issued upon the automatic
conversion of the Class B Common Stock into Class A Common Stock shall have
attached to it a Class A Right.
Section 4. Form of Class B Rights Certificates.
(a) The Class B Rights Certificates (and the form of assignment and the
form of exercise notice and certificate to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Class
B Rights may from time to time be listed or traded, or to conform to usage.
Subject to the provisions of Sections 11 and 22 hereof, the Class B Rights
Certificates, whenever distributed, shall be dated as of the Dividend Record
Date (or, if the shares pursuant to which the Class B Rights are attached are
issued thereafter, such date of issuance), shall include the date of
countersignature and on their face shall entitle the holders thereof to purchase
such number of shares of Class B Common Stock as shall be set forth therein at
the Purchase Price (as hereinafter defined), but the amount and type of
securities issuable upon the exercise of each Class B Right and the Purchase
Price shall be subject to adjustment as provided herein.
(b) Any Class B Rights Certificate issued pursuant to Section 3 or 22
hereof that represents Class B Rights beneficially owned by (i) any Acquiring
Person or any Affiliate of an Acquiring Person, or (ii) any Disqualified
Transferee, and any other Class B Rights Certificate issued pursuant to Section
6 or 11 hereof upon the transfer, exchange, replacement, or adjustment of any
such Class B Rights Certificate shall contain (to the extent feasible) the
following legend:
The Class B Rights represented by this Class B Rights Certificate are or
were beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate (which includes both affiliates and associates)
of an Acquiring Person (as each such term is defined in the Class B
Rights Agreement between the issuer and American Stock Transfer Trust
Company, as Rights Agent, dated as of July 30, 1998 (the "Class B Rights
Agreement")). Accordingly, this Class B Rights Certificate and the Class
B Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Class B Rights Agreement.
The Rights Agent will mail to the registered holder of this certificate
a copy of the Class B Rights Agreement, as in effect on the date of such
mailing, without charge upon written request.
Section 5. Countersignature and Registration.
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The Class B Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President, or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Class B Rights Certificates shall be countersigned, either manually or by
facsimile signature, by the Rights Agent and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Class B Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Class B Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, issued, and delivered with the same force and
effect as though the person who signed such Class B Rights Certificates had not
ceased to be such officer of the Company. Any Class B Rights Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Class B Rights Certificate, shall be a proper officer of the
Company to sign such Class B Rights Certificate, although at the date of the
execution of this Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent shall keep or cause to
be kept, at the office of the Rights Agent designated for such purpose, books
for registration and transfer of the Class B Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Class B Rights Certificates, the number of Class B Rights
evidenced on its face by each of the Class B Rights Certificates, and the date
of countersignature thereof by the Rights Agent.
Section 6. Transfer, Split Up, Combination and Exchange of Class B Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Class B Rights Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e), and 14 hereof and
the last sentence of this Section 6(a), at any time after the Close of Business
on the Distribution Date, and at or prior to the earlier of the Close of
Business on the Expiration Date or the earlier redemption of the Class B Rights,
any Class B Rights Certificate may be transferred, split up, combined or
exchanged for another Class B Rights Certificate or Class B Rights Certificates,
entitling the registered holder to purchase a like number of shares of Class B
Common Stock (or, following a Common Stock Event, Class B Common Stock and/or
such other securities (including Class A Common Stock), cash, or other assets as
shall be issuable in respect of the Class B Rights in accordance with the terms
of this Agreement (such other securities, cash or other assets being referred to
herein as "Other Consideration")) as the Class B Rights Certificate surrendered
then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Class B Rights Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Class B Rights
Certificate to be transferred, split up, combined, or exchanged at the office of
the Rights Agent designated for such purpose, accompanied by a signature
guarantee and such other documentation as the Rights Agent may reasonably
request. Neither
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the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Class B Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Class B Rights Certificate and shall have provided such additional evidence of
the identity of the Beneficial Owner from whom the Class B Rights evidenced by
such Class B Rights Certificate are to be transferred (or the Beneficial Owner
to whom such Class B Rights are to be transferred) or Affiliates thereof as the
Company shall reasonably request. Thereupon, subject to Sections 4(b), 7(e) and
14 hereof and the last sentence of this Section 6(a), the Company shall execute
and the Rights Agent shall countersign and deliver to the Person entitled
thereto a Class B Rights Certificate or Class B Rights Certificates, as the case
may be, as so requested. The Company may require payment by the holders of Class
B Rights of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Class B Rights Certificates which the Company is not required to pay in
accordance with Section 9(d) hereof. At any time after the close of Business on
the Distribution Date, and at or prior to the earlier of the Close of Business
on the Expiration Date or the earlier redemption of the Class B Rights, any
transfer of any Class B Rights Certificate to a Person other than a Permitted
Transferee shall automatically convert such Class B Rights Certificate into a
Class A Rights Certificate governed by the terms of the Class A Rights Agreement
and such Class B Rights Certificate shall become null and void.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Class B Rights Certificate, and, in case of loss, theft or destruction, the
receipt of indemnity or security satisfactory to them, and upon reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Class B Rights
Certificate, if mutilated, accompanied by a signature guarantee and such other
documentation as the Rights Agent may reasonably request, the Company will
execute and deliver a new Class B Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of the
Class B Rights Certificate so lost, stolen, destroyed, or mutilated.
Section 7. Exercise of Class B Rights; Purchase Price; Expiration Date of Class
B Rights.
(a) Except as otherwise provided herein, the registered holder of any
Class B Rights Certificate may exercise the Class B Rights evidenced thereby in
whole or in part at any time from and after the Distribution Date and at or
prior to the Close of Business on July 30, 2008 (the "Expiration Date") or the
earlier redemption of the Class B Rights. Immediately upon the Close of Business
on the Expiration Date (or the earlier redemption of Class B Rights), all Class
B Rights shall be extinguished and all Class B Rights Certificates shall become
null and void. To exercise Class B Rights, the registered holder of the Class B
Rights Certificate evidencing such Class B Rights shall surrender such Class B
Rights Certificate, with the form of election to purchase on the reverse side
thereof and the certificate contained therein duly
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executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, accompanied by a signature guarantee and such other documentation
as the Rights Agent may reasonably request, together with payment in cash, only
by electronic or wire transfer, or by certified check or bank check, of the
Purchase Price with respect to the total number of shares of Class B Common
Stock (or, after a Common Stock Event, shares or similar units of Class B Common
Stock and/or Other Consideration) as to which the Class B Rights are exercised
(which payment shall include any additional amount payable by such Person in
accordance with Section 9(d) hereof). The Rights Agent shall promptly deliver to
the Company all payments of the Purchase Price received in respect of Class B
Rights Certificates accepted for exercise.
(b) The purchase price for each share of Class B Common Stock issuable
pursuant to the exercise of a Class B Right (the "Purchase Price") shall
initially be $80.00, shall be subject to adjustment as provided in Section 11
hereof, and shall be payable in lawful money of the United States of America.
(c) Upon receipt of a Class B Rights Certificate representing the Class
B Rights, with the form of election to purchase set forth on the reverse side
thereof and the certificate contained therein duly executed, accompanied by
payment of the Purchase Price, with respect to each Class B Right so exercised,
the Rights Agent, subject to Sections 7(e), 11(a)(iii) and 20(k) hereof, shall
thereupon promptly (i) requisition from any transfer agent of the Class B Common
Stock (or from the Company if there shall be no such transfer agent, or make
available if the Rights Agent is such transfer agent) certificates for the total
number of shares of Class B Common Stock to be purchased and the Company hereby
irrevocably authorizes such transfer agent to comply with any such request, (ii)
after receipt of such certificates, cause the same to be delivered to or upon
the order of the registered holder of such Class B Rights Certificate,
registered in such name or names as may be designated in writing by such holder,
and (iii) when appropriate, requisition from the Company the amount of cash to
be paid in lieu of issuance of a fractional share in accordance with Section 14
hereof and after receipt promptly deliver such cash to or upon the order of the
registered holder of such Class B Rights Certificate. After the occurrence of a
Common Stock Event, the Company shall make all necessary arrangements so that
any Other Consideration then deliverable in respect of the Class B Rights is
available for distribution by the Rights Agent. For purposes of this Section 7,
the Rights Agent shall be entitled to rely, and shall be protected in relying,
on an Officers' Certificate from the Company to the effect that the Distribution
Date has occurred.
(d) Subject to Sections 4(b), 7(e) and 14 hereof, in case the registered
holder of any Class B Rights Certificate shall exercise less than all the Class
B Rights evidenced thereby, a new Class B Rights Certificate evidencing Class B
Rights equivalent to the Class B Rights remaining unexercised shall be executed
and delivered by the Company to the Rights Agent and countersigned and delivered
by the Rights Agent to the registered holder of such Class B Rights Certificate
or subject to the last sentence of Section 6(a) hereof, to such holder's duly
authorized assigns.
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(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Common Stock Event, any Class B Rights
beneficially owned by (i) an Acquiring Person or an Affiliate of an Acquiring
Person, or (ii) a Disqualified Transferee shall become null and void without any
further action, and no holder of such Class B Rights shall have any rights
whatsoever with respect to such Class B Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but the Company shall have no liability to any holder of Class B
Rights Certificates or other Person and none of the terms of this Agreement or
the Class B Rights shall be deemed to be waived with respect to such holder or
other Person as a result of any failure by the Company to make any
determinations with respect to an Acquiring Person or any Affiliate of an
Acquiring Person or Disqualified Transferees hereunder or any failure to have a
legend placed on any Class B Rights Certificate in accordance with Section 4(b)
hereof or on any Class B Common Stock certificate in accordance with Section
3(c) hereof.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a holder of any Class B Rights Certificate upon the occurrence of any
purported exercise thereof unless such holder shall have (i) completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Class B Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner from whom the Class B Rights evidenced by such Class B Rights
Certificate are to be transferred (or the Beneficial Owner to whom such Class B
Rights are to be transferred) or Affiliates thereof as the Company shall
reasonably request.
(g) Notwithstanding anything in this Agreement to the contrary, if on or
after the Distribution Date all outstanding shares of Class B Common Stock shall
have been converted into Class A Common Stock pursuant to the terms of Section
A.3.(f) of the Company's Articles of Incorporation, all Class B Rights
Certificates issued and outstanding hereunder shall be null and void and shall
automatically be converted into Class A Rights Certificates governed by the
Class A Rights Agreement
Section 8. Cancellation and Destruction of Class B Rights Certificates.
All Class B Rights Certificates surrendered for the purpose of and
accepted for exercise, or surrendered for the purpose of redemption, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any
of its agents (other than the Rights Agent), be delivered to the Rights Agent
for cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Class B Rights Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Class B
Rights Certificates purchased or retired by the Company otherwise than upon the
exercise thereof. The Rights
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Agent shall deliver all canceled Class B Rights Certificates to the Company, or
may, at the written request of the Company, but shall not be required to,
destroy such canceled Class B Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Class B Common Stock; Other
Covenants.
(a) The Company covenants and agrees that on and after the Distribution
Date, it shall use reasonable efforts to cause to be reserved and kept available
out of its authorized and unissued shares of Class B Common Stock (or, following
the occurrence of a Common Stock Event, out of its authorized and unissued
shares of Class B Common Stock and/or Other Consideration, or out of its
authorized and issued shares held in its treasury), the number of shares of
Class B Common Stock (or, following a Common Stock Event, shares and/or similar
units of Class B Common Stock and/or Other Consideration) that, except as
provided in Section 11(a)(iii) hereof, would then be sufficient to permit the
exercise in full of all outstanding Class B Rights; provided, however, that the
reservation of such shares shall be subject and subordinate to any other
reservation of such shares made by the Company at any time for any lawful
purpose; provided, further, however, that in no event shall such failure to so
reserve shares affect the rights of any holder of Class B Rights hereunder.
(b) The Company covenants and agrees that on and after the Distribution
Date so long as the Class B Common Stock (or, following a Common Stock Event,
shares and/or similar units of Class B Common Stock and/or Other Consideration)
issuable upon the exercise of Class B Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause all shares
(or similar units) reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it shall take all such action
as may be necessary to ensure that each share of Class B Common Stock (or,
following a Common Stock Event, each share and/or similar unit of Class B Common
Stock and/or Other Consideration) delivered upon exercise of Class B Rights
shall, at the time of delivery of the certificates for such shares (or units),
subject to payment in full of the Purchase Price, be duly and validly authorized
and issued and fully paid and nonassessable.
(d) The Company covenants and agrees that it shall pay when due and
payable any and all federal and state transfer taxes and similar charges which
may be payable in respect of the issuance or delivery of the Class B Rights
Certificates or of any shares of Class B Common Stock (or, following the
occurrence of a Common Stock Event, each share and/or similar unit of Class B
Common Stock and/or Other Consideration) upon the exercise of Class B Rights;
provided, however, that the Company shall not be required to pay any transfer
tax which may be payable in respect of any transfer involved in the transfer or
delivery of Class B Rights Certificates or in the issuance or delivery of
certificates for any shares of Class B Common
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Stock (or, following the occurrence of a Common Stock Event, each share and/or
similar unit of Class B Common Stock and/or Other Consideration) in a name other
than that of the registered holder of the Class B Rights Certificate evidencing
Class B Rights surrendered for exercise or to issue or deliver any certificates
for any shares of Class B Common Stock (and, following the occurrence of a
Common Stock Event, any shares and/or similar units of Class B Common Stock
and/or Other Consideration) upon the exercise of any Class B Rights until any
such tax shall have been paid (any such tax being payable by the holder of such
Class B Rights Certificate at the time of surrender thereof) or until it has
been established to the Company's satisfaction that no such tax is due.
(e) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the first occurrence of a Common
Stock Event on which the consideration to be delivered by the Company upon
exercise of the Class B Rights has been determined in accordance with this
Agreement, or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
securities issuable upon exercise of the Class B Rights on an appropriate form,
(ii) to cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Class B Rights are no
longer exercisable for such securities, or (B) the Expiration Date or earlier
redemption of the Class B Rights. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states of the United States in connection with the
exercisability of the Class B Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(e), the exercisability of the Class
B Rights in order to prepare and file such registration statement or to permit
it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Class B Rights has
been temporarily suspended. The Company shall thereafter issue a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Class B
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
Section 10. Class B Common Stock Record Date; Etc.
Each Person in whose name any certificate for any shares of Class B
Common Stock (or, following the occurrence of a Common Stock Event, shares
and/or similar units of Class B Common Stock and/or Other Consideration) is
issued upon the exercise of Class B Rights shall for all purposes be deemed to
have become the holder of record of such shares of Class B Common Stock (or such
shares and/or similar units of Class B Common Stock and/or Other Consideration,
as the case may be) represented thereby, and such certificate shall be dated the
date which is the later of (i) the date upon which the Class B Rights
Certificate evidencing such Class B Rights was duly surrendered, or (ii) the
date upon which payment of the Purchase
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Price (and any applicable transfer taxes) in respect thereof was made; provided,
however, that if such date is a date upon which the relevant transfer books of
the Company are closed, such Person shall be deemed to have become the record
holder of such shares (or Other Consideration) on, and such certificate shall be
dated, the next succeeding Business Day on which such transfer books of the
Company are open; provided, further, that the Company covenants and agrees that
it shall not close such transfer books for a period exceeding ten consecutive
days. Prior to the exercise of the Class B Rights evidenced thereby (which shall
be deemed to have occurred on the date such certificate for shares and/or
similar units of Class B Common Stock or Other Consideration shall be dated in
accordance with this Section 10), the holder of a Class B Rights Certificate, as
such, shall not be entitled to any rights of a security holder of the Company
with respect to the shares of Class B Common Stock (and/or such shares or
similar units of Class B Common Stock or Other Consideration) for which the
Class B Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions, or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as expressly provided herein.
Section 11. Antidilution Adjustments.
The Purchase Price and the number and kind of securities covered by each
Class B Right and the number of Class B Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event that the Company shall at any time after the
Declaration Date (A) declare and pay a dividend on the Class B Common
Stock payable in shares of Class B Common Stock, (B) subdivide the
outstanding Class B Common Stock, (C) combine the outstanding Class B
Common Stock into a smaller number of shares, or (D) issue, change, or
alter any of its shares of capital stock in a reclassification or
recapitalization (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or
surviving Person), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, then, and in each such case, the Purchase Price
in effect at the time of the record date for such dividend or the
effective time of such subdivision, combination, reclassification or
recapitalization, and the number and kind of shares of capital stock
issuable upon exercise of the Class B Rights at such time, shall be
proportionately adjusted so that the holder of any Class B Right
exercised after such time shall be entitled to receive the aggregate
number and kind of shares of Class B Common Stock or other capital stock
which, if such Class B Right had been exercised immediately prior to
such time at the Purchase Price then in effect and at a time when the
transfer books for the Class B Common Stock (or other capital stock) of
the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination, reclassification or recapitalization. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment
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provided in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
(ii) In the event
(A) any Person shall at any time after the Declaration
Date become an Acquiring Person; or
(B) any Acquiring Person or any Affiliate of any Acquiring
Person, at any time after the Declaration Date, directly or
indirectly, shall (1) merge into the Company or otherwise combine
with the Company, and the Company shall be the continuing or
surviving corporation of such merger or combination and the Class
B Common Stock of the Company shall remain outstanding and no
shares thereof shall be changed or otherwise transformed into
stock or other securities of any other Person or the Company or
cash or any other property, (2) in one or more transactions,
transfer any assets to the Company in exchange (in whole or in
part) for shares of any class of its equity securities or for
securities exercisable for or convertible into shares of any such
class or otherwise obtain from the Company, with or without
consideration, any additional shares of any such class or
securities exercisable for or convertible into shares of any such
class (other than as part of a pro rata distribution to all
holders of such class), (3) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one
transaction or a series of transactions) to, from or with the
Company or any of the Company's Subsidiaries, assets with an
aggregate fair market value in excess of 25% of the assets of the
Company and its Subsidiaries determined on a consolidated basis
on terms and conditions less favorable to the Company than the
Company would be able to obtain through arm's-length negotiation
with an unaffiliated third party, (4) receive any compensation
from the Company or any of the Company's Subsidiaries other than
compensation as a director of the Company or for full-time
employment as a regular employee at rates in accordance with the
Company's (or such Subsidiary's) past practices, (5) receive the
benefit (except proportionately as a stockholder), of any loans,
advances, guarantees, pledges or other financial assistance
provided by the Company or any of its Subsidiaries on terms and
conditions less favorable to the Company (or such Subsidiary)
than the Company would be able to obtain through arm's-length
negotiation with an unaffiliated third party or (6) commence a
tender or exchange offer for securities of the Company; or
(C) during such time as there is an Acquiring Person at
any time after the Declaration Date, there shall be any
reclassification of securities (including any combination
thereof), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries
(whether or not with or into or otherwise involving an Acquiring
Person or any Affiliate of an
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Acquiring Person), or any repurchase by the Company or any of its
Subsidiaries of shares of the Class B Common Stock of the
Company, or any other class or series of securities issued by the
Company, which reclassification, recapitalization, merger,
consolidation or repurchase is effected at a time when a majority
of the Board consists of persons who are the Acquiring Person or
its Affiliates, or nominees or designees of any thereof, which
has the effect, directly or indirectly, of increasing by more
than 1% the proportionate share of the outstanding shares of any
class of equity securities or securities exercisable for or
convertible into any class of equity securities of the Company or
any of its Subsidiaries which is directly or indirectly owned by
an Acquiring Person or any Affiliate of an Acquiring Person,
then, in each such case, upon the Close of Business 10 Business Days
after the occurrence of such event, proper provision shall be made so
that each holder of a Class B Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon exercise
thereof at the Purchase Price in effect at the time of exercise in
accordance with the terms of this Agreement, in lieu of one share of
Class B Common Stock, such number of shares of Class B Common Stock of
the Company as shall equal the result obtained by (x) multiplying an
amount equal to the then current Purchase Price by an amount equal to
the number of shares of Class B Common Stock for which a Class B Right
was or would have been exercisable immediately prior to the first
occurrence of any such event whether or not such Class B Right was then
exercisable, and (y) dividing that product by 50% of the Current Market
Price per share of the Class B Common Stock of the Company (as defined
in Section 11(d) hereof) determined as of the date of such first
occurrence.
(iii) In lieu of issuing whole or fractional shares of Class B
Common Stock in accordance with Section 7(c) hereof, the Company shall
(i) in the event that the number of shares of Class B Common Stock which
are authorized by the Company's charter but not outstanding or reserved
for issuance for purposes other than upon exercise of the Class B Rights
are not sufficient to permit the exercise in full of the Class B Rights
in accordance with Section 7(c) hereof, or (ii) if a majority of the
Board then in office determines that it would be appropriate and not
contrary to the interests of the holders of Class B Rights (other than
any Acquiring Person or Disqualified Transferee or any Affiliate of the
Acquiring Person or Disqualified Transferee), (A) determine an amount,
if any, (the "Excess Amount") equal to the excess of (1) the value (the
"Current Value") of the whole or fractional shares of Class B Common
Stock issuable upon the exercise of a Class B Right in accordance with
Section 7(c) hereof, over (2) the Purchase Price, and (B) with respect
to each Class B Right, (subject to Section 7(e) hereof) make adequate
provision to substitute for such whole or fractional shares of Class B
Common Stock, upon payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Class A Common Stock or other
equity securities of the Company (including, without limitation, shares
or units of preferred stock which
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the Board has deemed in good faith to have the same value as a share of
Class B Common Stock (such shares of equity securities being referred to
herein as "Class B Common Stock Equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing
(which would include the additional consideration provided to any holder
by reducing the Purchase Price) having an aggregate value equal to the
Current Value, where such aggregate value has been determined by the
Board; provided, however, subject to the provisions of Section 9(e),
that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within 30 days following the Close of
Business 10 Business Days after the first occurrence of a Common Stock
Event described in Section 11(a)(ii) hereof, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Class B Right
and without requiring payment of the Purchase Price, whole or fractional
shares of Class B Common Stock (to the extent available) and then, if
necessary, cash, securities, and/or assets which in the aggregate are
equal to the Excess Amount. If the Board shall determine in good faith
that it is likely that sufficient additional shares of Class B Common
Stock or Class B Common Stock Equivalents could be authorized for
issuance upon exercise in full of the Class B Rights, the 30-day period
set forth above may be extended to the extent necessary, but not more
than 90 days following the Close of Business 10 Business Days after the
first occurrence of such a Common Stock Event (such 30 day period) as it
may be extended to 90 days, is referred to herein as the "Substitution
Period"). To the extent that the Company determines that some action is
to be taken pursuant to the preceding provisions of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that (except as to the form of consideration which shall be
determined as appropriate by a majority of the Board then in office)
such action shall apply uniformly to all outstanding Class B Rights
which shall not have become null and void, and (y) may suspend the
exercisability of the Class B Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
pursuant to such provisions and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Class B Rights has
been temporarily suspended. The Company shall thereafter issue a public
announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Class B Common
Stock issuable upon exercise of a Class B Right in accordance with
Section 7(c) hereof shall be the Current Market Price per share of the
Class B Common Stock (as determined pursuant to Section 11(d) hereof) on
the Close of Business 10 Business Days after the date of the first
occurrence of such a Common Stock Event and the value of any Class B
Common Stock Equivalent shall be deemed to be equal to the Current
Market Price per share of the Class B Common Stock on such date.
(b) In the event the Company shall, after the Dividend Record Date, fix
a record date for the issuance of any options, warrants, or other rights to all
holders of Class B Common Stock entitling them (for a period expiring within 45
calendar days after such record
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date) to subscribe for or purchase (i) Class B Common Stock or (ii) Class B
Common Stock Equivalents or (iii) securities convertible into Class B Common
Stock or Class B Common Stock Equivalents at a price per share of Class B Common
Stock or Class B Common Stock Equivalents (or having a conversion price per
share of Class B Common Stock, if a security is convertible into Class B Common
Stock or Class B Common Stock Equivalents) less than the Current Market Price
per share of Class B Common Stock (determined in accordance with Section 11(d)
hereof) determined as of such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Class B Common Stock outstanding on such
record date plus the number of shares of Class B Common Stock and/or Class B
Common Stock Equivalents which the aggregate minimum offering price of the total
number of shares of Class B Common Stock and/or Class B Common Stock Equivalents
so to be offered (and/or the aggregate minimum conversion price of such
convertible securities so to be offered) would purchase at such Current Market
Price, and the denominator of which shall be the number of shares of Class B
Common Stock outstanding on such record date plus the maximum number of
additional shares of Class B Common Stock and/or Class B Common Stock
Equivalents to be offered for subscription or purchase (or the maximum number of
shares into which such convertible securities so to be offered are convertible).
In case such subscription price may be paid by delivery of consideration part or
all of which shall be in a form other than cash, for purposes of this Section
11(b) the value of such consideration shall be the fair market value thereof as
determined in good faith by the Board (which determination shall be described in
an Officers' Certificate filed with the Rights Agent). Shares of Class B Common
Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed; and in the event that
such options, warrants or other rights are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed (subject, however, to such other adjustments as
are provided herein).
(c) In the event that the Company shall, after the Dividend Record Date,
fix a record date for the making of a distribution to all holders of Class B
Common Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving or continuing
Person) of evidences of indebtedness, cash (other than cash dividends paid out
of the earnings or retained earnings of the Company and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles consistently applied), other property (other than a
dividend payable in a number of shares of Class B Common Stock, but including
any dividend payable in capital stock other than Class B Common Stock), or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, of which the numerator shall be (i) the Current
Market Price per share of Class B Common Stock (as defined in Section 11(d)
hereof) determined as of such record date, less (ii) the sum of (A) that portion
of cash plus (B) the fair market value, as determined in good faith by the Board
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(which determination shall be described in an Officers' Certificate filed with
the Rights Agent) of that portion of such evidences of indebtedness, such other
property, and/or such subscription rights or warrants applicable to one share of
Class B Common Stock and of which the denominator shall be such Current Market
Price per share of the Class B Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed (subject, however, to such other adjustments as are provided herein).
(d) For purposes of any computation pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share (or unit) of any security on any
date shall be deemed to be the average of the daily Closing Price of such
security for the 10 consecutive Trading Days immediately after such date, and
for the purpose of any other computation hereunder, the "Current Market Price"
per share (or unit) of any security on any date shall be deemed to be the
average of the daily Closing Price of such security for the 20 consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the Current Market Price per share of such security is determined
during a period following the announcement by the issuer of such security of (i)
a dividend or distribution on such security payable in shares (or units) of such
security or securities convertible into shares (or units) of such security, or
(ii) any subdivision, combination or reclassification of such security, and
prior to the expiration of such 10 Trading Days or 20 Trading Days after (A) the
ex-dividend date for such dividend or distribution, or (B) the record date for
such subdivision, combination or reclassification, as the case may be, then, and
in each such case, the "Current Market Price" shall be the Closing Price of such
security on the last day of such respective 10 Trading Day or 20 Trading Day
period. For purposes of this Agreement, the "Closing Price" of any security on
any day shall be the last sale price, regular way, with respect to shares (or
units) of such security, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, with respect to such
security, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange; or, if such security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such security is listed or
admitted to trading; or, if such security is not so listed or admitted to
trading, the last quoted sale price with respect to shares (or units) of such
security, or, if not so quoted, as the average of the high bid and low asked
prices in the over-the-counter market with respect to shares (or units) of such
security, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other similar system then in use; or, if on
any such date such security is not quoted by any such organization, the average
of the closing bid and asked prices with respect to shares (or units) of such
security, as furnished by a professional market maker making a market in such
security selected by the Board; or, if no such market maker is available, the
fair market value of shares (or units) of such security as of such day as
determined in good faith by the Board (which determination shall be described in
an Officers' Certificate filed with the Rights Agent).
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(e) No adjustment in the Purchase Price shall be required unless
adjustment would require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share (or similar
unit) of Class B Common Stock or other securities. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three years from the date of the
transaction which mandates the adjustment or (ii) the Expiration Date. Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those
required by this Section 11, as it in its discretion shall determine to be
advisable in order that any dividends, subdivision of shares, distribution of
rights to purchase shares of beneficial interest or other stock or securities,
or distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
(f) In the event that at any time, as a result of an adjustment made in
respect of a Common Stock Event, the holder of any Class B Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than shares of Class B Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Class B Right and the Purchase
Price thereof shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect to
such other shares contained in Sections 11(a), (b), (c), (e), (g), (h), (i),
(j), (k), (m) and (p) hereof, and the provisions of Sections 7, 9, 10, 11(d), 13
and 14 hereof with respect to the shares of Class B Common Stock shall apply on
like terms to any such other shares.
(g) All Class B Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Class B Common
Stock purchasable from time to time hereunder upon exercise of the Class B
Rights represented thereby, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made pursuant to Sections 11(b) and 11(c) hereof, each Class B
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of shares of Class B Common Stock (calculated to the nearest
ten-thousandth of a share) obtained by (i) multiplying (x) the number of shares
of Class B Common Stock covered by a Class B Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
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(i) Assuming that no other adjustment pursuant to this Section 11 has
been made, the Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Class B Rights in substitution for any
adjustment in the number of shares of Class B Common Stock purchasable upon the
exercise of a Class B Right. Each of the Class B Rights outstanding after such
adjustment of the number of Class B Rights shall be exercisable for the number
of shares of Class B Common Stock for which a Class B Right was exercisable
immediately prior to such adjustment. Each Class B Right held of record prior to
such adjustment of the number of Class B Rights shall become that number of
Class B Rights (calculated to the nearest ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price by the Purchase Price in effect immediately after such adjustment
of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Class B Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Class B Rights Certificates have been issued,
shall be at least 10 days later than the date of the public announcement. If
Class B Rights Certificates have been issued, upon each adjustment of the number
of Class B Rights pursuant to this Section 11(i) the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Class B Rights
Certificates on such record date Class B Rights Certificates evidencing, subject
to Section 14 hereof, the additional Class B Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Class B Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the Company,
new Class B Rights Certificates evidencing all the Class B Rights to which such
holders shall be entitled after such adjustment. Class B Rights Certificates so
to be distributed shall be issued, executed, and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Class B Rights Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of whole or fractional shares of Class B Common Stock issuable upon
exercise of such Class B Rights, the Class B Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share and the
number of shares of Class B Common Stock which were expressed in the initial
Class B Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of shares of
Class B Common Stock issuable upon exercise of the Class B Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue such number of
fully paid and nonassessable shares of Class B Common Stock at such adjusted
Purchase Price.
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(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Class B Right exercised after such record
date of the number of shares of Class B Common Stock or other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of shares of Class B Common Stock or other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, by means of a resolution of the Board acting in good faith,
shall determine to be advisable in order that any consolidation or subdivision
of the Class B Common Stock, issuance wholly for cash of any Class B Common
Stock at less than the Current Market Price thereof, issuance wholly for cash of
Class B Common Stock (or other securities which by their terms are convertible
into or exchangeable for Class B Common Stock), dividends payable in shares of
Class B Common Stock or other capital stock or shares of beneficial interest, or
issuance of rights, options, or warrants referred to hereinabove in this Section
11, hereafter made or declared by the Company to the holders of its Class B
Common Stock, shall not be taxable to such holders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, more than 25% of (A) the assets
(taken at net asset value as stated on the books of the Company and determined
on a consolidated basis in accordance with generally accepted accounting
principles consistently applied) or (B) the earning power of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any other Person or
Persons (other than the Company or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale, there are any
rights, warrants or other instruments or securities outstanding or agreements
(whether or not in writing) in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Class B Rights
or (y) prior to, simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of such other Person shall have received a
distribution of Class B Rights previously owned by such Person or any of its
Affiliates.
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(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Class B Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Dividend Declaration Date and
prior to the Distribution Date (i) declare or pay a dividend on the outstanding
shares of Class B Common Stock payable in shares of Class B Common Stock, or
(ii) effect a subdivision, combination or consolidation of the outstanding Class
B Common Stock (by reclassification or otherwise than by payment of dividends in
shares of Class B Common Stock) into a greater or smaller number of shares, then
in any such case, (i) the number of shares of Class B Common Stock purchasable
after such event upon proper exercise of each Class B Right shall be determined
by multiplying the number of shares of Class B Common Stock so purchasable
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Class B Common Stock outstanding immediately prior
to the occurrence of the event and the denominator of which shall be the total
number of shares of Class B Common Stock outstanding immediately following the
occurrence of such event; and (ii) each share of Class B Common Stock
outstanding immediately after such event shall have issued with respect to it
that number of Class B Rights which each share of Class B Common Stock
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(p) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjustments.
Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall (a) promptly prepare an Officers' Certificate setting forth
such adjustment, including any adjustment in Purchase Price, the number of
shares or Other Consideration payable, and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and with
the transfer agent for the Class B Common Stock a copy of such Officers'
Certificate, and (c) mail a brief summary thereof to each registered holder of a
Class B Rights Certificate in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such Officers' Certificate and
on any adjustment therein contained, and shall not be deemed to have knowledge
of any such adjustment unless and until it shall have received such an Officers'
Certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
In the event that, following the Stock Acquisition Date, directly or
indirectly, (a) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) and the
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Company shall not be the continuing or surviving Person of such consolidation or
merger, (b) any Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof) shall consolidate with, or merge with
and into, the Company, the Company shall be the continuing or surviving Person
of such consolidation or merger and, in connection with such consolidation or
merger, all or part of the Common Stock of the Company shall be changed or
otherwise transformed into other stock or other securities of any other Person
or the Company or cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, more than 25%
of (A) the assets (taken at net asset value as stated on the books of the
Company and determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) or (B) the earning power of
the Company and its Subsidiaries (determined on a consolidated basis in
accordance with generally accepted accounting principles consistently applied)
to any Person (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o) hereof) then, from
and after such event, proper provision shall be made so that (i) each holder of
a Class B Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the Purchase Price in
effect at the time of such exercise in accordance with the terms of this
Agreement, such number of whole or fractional shares of validly authorized and
issued, fully paid, non-assessable, and freely tradeable Common Stock of such
other Person (or in the case of a transaction or series of transactions
described in clause (c) above, the Person receiving the greatest amount of the
assets or earning power of the Company, or if the Common Stock of such other
Person is not and has not been continuously registered under Section 12 of the
Exchange Act for the preceding 12-month period and such Person is a direct or
indirect Subsidiary of another Person, that other Person, or if such other
Person is a direct or indirect Subsidiary of more than one other Person, the
Common Stock of two or more of which are and have been so registered, such other
Person whose outstanding Common Stock has the greatest aggregate value), free
and clear of any liens, encumbrances, rights of first refusal, or other adverse
claims, as shall be equal to the result obtained by (x) multiplying the Purchase
Price in effect immediately prior to the first occurrence of any Common Stock
Event described in this Section 13 by the number of shares of Class B Common
Stock for which a Class B Right is exercisable immediately prior to such first
occurrence (and without taking into account any prior adjustment made pursuant
to 11(a)(ii)) and (y) dividing that product by 50% of the Current Market Price
per share (as defined in Section 11(d) hereof) of the Common Stock of such other
Person determined as of the date of consummation of such consolidation, merger,
sale, or transfer; (ii) the issuer of such Common Stock shall thereafter be
liable for, and shall assume, by virtue of such consolidation, merger, sale, or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed, for all purposes
of this Agreement, to refer to such issuer, it being specifically intended that
the provisions of Section 11 hereof (other than Section 11(a)(ii) hereof) shall
apply only to such issuer following the first occurrence of a Common Stock Event
described in this Section 13; (iv) such issuer shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with such
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consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
whole or fractional shares of its Common Stock thereafter deliverable upon the
exercise of the Class B Rights; and (v) the provisions of Section 11(a)(ii)
hereof shall be of no effect following the first occurrence of any Common Stock
Event described in clauses (a), (b) or (c) of this Section 13. The Company shall
not consummate any such consolidation, merger, sale or transfer unless (i) such
issuer shall have a sufficient number of authorized shares of its Common Stock
which have not been issued or reserved for issuance as will permit the exercise
in full of the Class B Rights in accordance with this Section 13, and (ii) prior
thereto the Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing and further providing that as
soon as practicable after the date of any Common Stock Event described above in
this Section 13 such issuer shall (A) prepare and file a registration statement
under the Act, with respect to the Class B Rights and the securities purchasable
upon exercise of the Class B Rights on an appropriate form, and will use its
best efforts to cause such registration statement to (I) become effective as
soon as practicable after such filing and (II) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date, and (B) will deliver to holders of the Class B Rights
historical financial statements of such issuer and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act. Furthermore, in case the Person which is to be party to a
transaction referred to in this Section 13 has any provision in any of its
authorized securities or in its charter or by-laws or other agreement or
instrument governing its affairs, which provision would have the effect of
causing such Person to issue, in connection with, or as a consequence of, the
consummation of a Common Stock Event described in clauses (a), (b), or (c) of
this Section 13, whole or fractional shares of Common Stock of such Person at
less than the then Current Market Price per share thereof (as defined in Section
11(d) hereof), or to issue securities exercisable for, or convertible into,
Common Stock of such Person at less than such then Current Market Price, then,
in such event, the Company hereby agrees with each holder of the Class B Rights
that it shall not consummate any such transaction unless prior thereto the
Company and such Person shall have executed and delivered to the Rights Agent a
supplemental agreement providing that such provision in question shall have been
canceled, waived, or amended so that it will have no effect in connection with,
or as a consequence of, the consummation of the proposed transaction. The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Common Stock
Event described in this Section 13 shall occur at any time after the occurrence
of a Common Stock Event described in Section 11(a)(ii) hereof, the Class B
Rights which have not theretofore been exercised shall thereafter become
exercisable, except as provided in Section 7(e) hereof, in the manner described
in this Section 13.
Section 14. Fractional Class B Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Class B
Rights or to distribute fractions of Class B Rights, except prior to the
Distribution Date as provided in
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Section 11(i) hereof, or to distribute Class B Rights Certificates which
evidence fractional Class B Rights. In lieu of issuing such fractional Class B
Rights, at the election of the Company, there shall be paid to the registered
holders of the Class B Rights with regard to which such fractional Class B
Rights would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Class B Right. For the purposes of this
Section 14(a), the current market value of a whole Class B Right shall be the
Closing Price of the Class B Rights for the Trading Day immediately prior to the
date on which such fractional Class B Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of shares of
its capital stock upon exercise of the Class B Rights or to distribute
certificates which evidence fractional shares. In lieu of fractional shares, at
the election of the Company, there shall be paid to the registered holders of
Class B Rights at the time such Class B Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of a
share of such capital stock. For purposes of this Section 14(b), the current
market value of a share of such capital stock shall be the Closing Price of such
capital stock for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Class B Right, by the acceptance of the Class B
Right, expressly waives such holder's right to receive any fractional Class B
Rights or (except as provided in Section 14(b) hereof) any fractional share upon
exercise of a Class B Right.
Section 15. Rights of Action.
Excepting the rights of action given the Rights Agent under Section 18
hereof and except as set forth in Section 20(l) hereof, all rights of action in
respect of this Agreement are vested in the registered holder of each Class B
Right; and any registered holder of any Class B Right, without the consent of
the Rights Agent or of the holder of any other Class B Right, may, in its own
behalf and for its own benefit, enforce, and may institute and maintain any
suit, action, or proceeding against the Company to enforce, or otherwise act in
respect of, such registered holder's right to exercise the rights evidenced by
such Class B Right in the manner provided in such Class B Rights Certificate and
in this Agreement, and the Company hereby agrees to reimburse such registered
holder for all expenses (including reasonable attorneys' fees) incurred by such
registered holder in connection therewith. Without limiting the foregoing or any
remedies available to the holders of Class B Rights, it is specifically
acknowledged that the holders of Class B Rights would not have an adequate
remedy at law for any breach of the obligations hereunder, and shall be entitled
to injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
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Section 16. Agreement of Class B Rights Holders.
Every holder of a Class B Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other holder of a
Class B Right that:
(a) prior to the Distribution Date, the Class B Rights will be
transferable only in connection with the transfer of Class B Common Stock,
subject to the limitations set forth in Section 3(d) hereof;
(b) from and after the Distribution Date, the Class B Rights
Certificates are transferable, subject to the limitations set forth in the last
sentence of Section 6(a) hereof, only on the registry books of the Rights Agent
if surrendered at the principal office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer with a form of assignment and
certificate set forth on the reverse side thereof duly executed, accompanied by
a signature guarantee and such other documentation as the Rights Agent may
reasonably request;
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name a Class B Rights Certificate
(or, prior to the Distribution Date, the associated Class B Common Stock
certificate) is registered as the absolute owner thereof and of the Class B
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Class B Rights Certificate or, prior to the Distribution Date, the
associated Class B Common Stock certificate, made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Class B Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company agrees to use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Class B Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Class B Rights Certificate shall be entitled
to vote, receive dividends, or otherwise be deemed for any purpose the holder of
any securities of the Company which may be issuable on the exercise of the Class
B Rights represented thereby, nor shall anything contained herein or in any
Class B Rights Certificate be construed to confer upon the holder of any Class B
Rights Certificate, as such, any of the rights of a stockholder of
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the Company or any right to vote in the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any action by the Company, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or preemptive rights, or otherwise, until the time specified in
Section 10 hereof.
Section 18. Concerning the Rights Agent.
The Company agrees to pay to the Rights Agent such reasonable
compensation as shall be agreed to in writing between the Company and the Rights
Agent for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any and all loss, liability, damages, claims or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses (including reasonable attorneys' fees and
expenses) of defending against any claim of liability for any of the foregoing.
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 Class B Rights
Certificate or certificate for any number of shares of Class B Common Stock or
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed and executed by the proper Person or Persons, and
verified or acknowledged as required by this Agreement.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the 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 shall be a party, or any corporation
succeeding to the shareholder services business of the Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement and any of the Class B Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Class B Rights
Certificates so countersigned; and in case at that time any of the Class B
Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign
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such Class B 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
Class B Rights Certificates shall have the full force provided in the Class B
Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Class B Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver such Class B Rights Certificates so countersigned; and in
case at that time any of the Class B Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Class B Rights Certificates
either in its prior name or in its changed name; and in all such cases such
Class B Rights Certificates shall have the full force provided in the Class B
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes only the duties and obligations expressly
imposed upon it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent. The Rights Agent shall
perform its duties and obligations hereunder upon the following terms and
conditions:
(a) The Rights Agent may consult with legal counsel of its selection
(who may be legal counsel to the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate (an "Officers' 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 Officers' Certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such Officers' Certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Class B
Rights Certificates (except its
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countersignature on such Class B Rights Certificate) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Class B Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Class B Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Sections 11 or 13 hereof or be responsible for the manner, method
or amount of any such adjustment or procedures or the ascertaining of the
existence of facts that would require any such adjustment or procedure (except
with respect to the exercise of Class B Rights evidenced by Class B Rights
Certificates after receipt of a certificate delivered pursuant to Section 12
hereof, describing any such adjustment or procedures); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Class B Common Stock or other securities to
be issued pursuant to this Agreement or any Class B Rights Certificate or as to
whether any shares of Class B Common Stock, or any shares or similar units of
other securities, will, when issued, be validly authorized and issued, fully
paid, and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of 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
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer. Any application by the
Rights Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent with respect to its duties or obligations under this Agreement
and the date on and/or after which such action shall be taken or omitted and the
Rights Agent shall not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after the date specified
therein (which date shall not be less than three Business Days after the date
any such officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking or
omitting any such action, the Rights Agent has received written instructions
from the Company in response to such application specifying the action to be
taken or omitted.
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(h) The Rights Agent and any stockholder, director, officer, or employee
of the Rights Agent may buy, sell, or deal in any of the Class B 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 entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, that reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Class B Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certification appearing on the
reverse side thereof following the form of election to purchase has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
(l) The provisions of this Section 20 are solely for the benefit of the
Rights Agent or the Company and any failure or omission under this Section 20
shall not affect the rights of the Company under this Agreement and neither the
Rights Agent nor the Company shall have any liability to any holder of Class B
Rights or other Person on account of such failure or omission.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to the transfer agent of the Class B Common Stock by
registered or certified mail, and, subsequent to the Distribution Date, to the
holders of the Class B Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent, to the transfer agent of the Class B Common
Stock by registered or certified mail, and, subsequent to the Distribution Date,
to the holders of the Class B Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the
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Rights Agent. If the Company shall fail to make such appointment within a period
of 30 days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Class B Rights Certificate (who shall, with
such notice, submit such holder's Class B Rights Certificate for inspection by
the Company), then the registered holder of any Class B Rights Certificate may
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of the
United States, the State of New York or the State of Vermont (or of any other
State of the United States so long as such corporation is authorized to do
business as a banking institution in the State of New York or the State of
Vermont, in good standing, having an office designated for such purpose in the
State of New York or the State of Vermont, which is authorized under such laws
to exercise corporate trust and/or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose; and,
except as the context herein otherwise requires, such successor Rights Agent
shall be deemed to be the "Rights Agent" for all purposes of this Agreement. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and the transfer
agent of the Class B Common Stock, and mail a notice thereof in writing to the
registered holders of the Class B Rights Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Class B Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Class
B Rights to the contrary, the Company may, at its option, issue new Class B
Rights Certificates evidencing Class B Rights in such form as may be approved by
the Board to reflect any adjustment or change in the Purchase Price per share
and the number or kind or class of shares of stock or other securities or
property purchasable under the Class B Rights Certificates made in accordance
with the provisions of this Agreement. In addition, in connection with the
issuance or sale by the Company of shares of Class B Common Stock following the
Distribution Date and prior to the redemption or expiration of the Class B
Rights, the Company (a) shall, with respect to shares of Class B Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board, issue Class B Rights Certificates
representing the appropriate number of Class B Rights in connection with such
issuance or sale; provided,
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however, that (i) no such Class B Rights evidenced by a Class B Rights
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Class B Rights would be issued, and (ii) no such Class B Rights Certificate
shall be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
The Company may, at its option, upon the affirmative vote or written
consent of not less than a majority of the Board then in office at any time
prior to the earlier of the (i) Distribution Date or (ii) the Close of Business
on the Expiration Date, redeem all (but not less than all) of the then
outstanding Class B Rights at a redemption price of $.01 per Class B Right,
appropriately adjusted to reflect any stock split, stock dividend, combination
of shares, or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"). The
Company may, at its option, pay the Redemption Price in cash, Common Stock
(based on the Current Market Price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the
majority of the Board then in office. Immediately upon the taking of such action
ordering the redemption of all of the Class B Rights, evidence of which shall
have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Class B Rights so redeemed will
terminate and the only right thereafter of the holders of such Class B Rights so
redeemed shall be to receive the Redemption Price (without the payment of any
interest thereon). Within 10 days after such action ordering the redemption of
all of the Class B Rights, the Company shall give notice of such redemption to
the holders of the then outstanding Class B Rights by mailing such notice to all
such holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Class B Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price shall be made.
Section 24. Exchange.
(a) The Board, by majority vote of the Directors then in office, may, at
its option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Class B Rights for shares of
Class B Common Stock at an exchange ratio of one share of Class B Common Stock
per Class B Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio, as the same may be adjusted from time to time, being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall not
be empowered to effect such exchange at any time after any Person (other than
(i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit
plan of the Company or of any
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<PAGE>
such Subsidiary, or (iv) any entity holding Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of
any Class B Rights pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Class B Rights
shall terminate and the only right thereafter of a holder of such Class B Rights
shall be to receive that number of shares of Class B Common Stock equal to the
number of such Class B Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Class B Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
shall state the method by which the exchange of the Class B Common Stock for
Class B Rights shall be effected and, in the event of any partial exchange, the
number of Class B Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Class B Rights (other than Class B
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Class B Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Class B Common Stock Equivalents for shares of
Class B Common Stock exchangeable for Rights.
(d) In the event that there shall not be sufficient shares of Class B
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Class B Rights as contemplated in accordance with this Section 24,
the Company shall take all such action as may be necessary to authorize
additional Class B Common Stock for issuance upon exchange of the Class B
Rights.
(e) The Company shall not be required to issue fractions of shares of
Class B Common Stock or to distribute certificates which evidence fractional
shares of Class B Common Stock. In lieu of such fractional shares of Class B
Common Stock, the Company shall pay to each registered holder of a Class B Right
Certificate with regard to which a fractional share of Class B Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Class B Common Stock. For the purposes
of this paragraph (e), the current market value of a whole share of Class B
Common Stock shall be the Closing Price of a share of Class B Common Stock (as
determined pursuant to Section 11(d) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Proposed Actions.
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In case the Company shall after the Distribution Date propose (a) to pay
any dividend payable in stock of any class to the holders of its Class B Common
Stock or to make any other distribution to the holders of its Class B Common
Stock (other than a cash dividend out of earnings or the retained earnings of
the Company), or (b) to offer to the holders of its Class B Common Stock rights
or warrants to subscribe for or to purchase any additional shares of Class B
Common Stock or shares of stock of any other class or any other securities,
rights, or options, or (c) to effect any reclassification of the Class B Common
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Class B Common Stock), or (d) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 25% of (i) the
assets of the Company and its Subsidiaries (taken at net asset value as stated
on the books of the Company and determined on a consolidated basis in accordance
with generally accepted accounting principles consistently applied) or (ii) the
earning power of the Company and its Subsidiaries (determined on a consolidated
basis in accordance with generally accepted accounting principles consistently
applied) to any other Person or Persons, or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and each holder of a Class B Right, in accordance
with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of Class B Common Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least twenty days prior to the
record date for determining holders of the Class B Common Stock for purposes of
such action, and in the case of any such other action, at least twenty days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of Class B Common Stock whichever shall be
the earlier. The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
In case any Common Stock Event described in Section 11(a)(ii) hereof
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and each holder of a Class B Rights
Certificate, in accordance with Section 26 hereof, a notice of the occurrence of
such Common Stock Event, which shall specify such event and the consequences of
the event to holders of Class B Rights under Section 11(a)(ii) hereof.
Notwithstanding anything in this Agreement to the contrary, prior to the
Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Class B Rights, for purposes of this Agreement and no
other notice need be given.
Section 26. Notices.
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<PAGE>
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Class B Rights Certificate to the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Ben & Jerry's Homemade, Inc.
30 Community Drive
South Burlington, VT 05403-6828
Attn: Chief Executive Officer
Copy to: Ropes & Gray
One International Place
Boston, MA 02110-2624
Attn: Howard K. Fuguet, Esq.
Subject to the provisions of Sections 19 and 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Class B Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer Trust Company
40 Wall Street
New York, NY 10005
(Ben & Jerry's Homemade, Inc. Class B Rights Agreement)
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Class B Rights Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments.
Prior to the Distribution Date, the Board, upon the vote of a majority
of the Board then in office, may from time to time supplement or amend this
Agreement without the approval of any holders of the Class B Rights. From and
after the Distribution Date, the Board may, upon the vote of a majority of the
Board then in office, from time to time amend this Agreement without the
approval of any holders of the Class B Rights in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
change any time period governing redemption of the Class B Rights or any other
time period or (iv) to make any other provisions in regard to matters or
questions arising hereunder which the Board, upon the vote of a majority of the
Board then in office, may deem necessary or desirable and which shall not
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<PAGE>
adversely affect the interests of the holders of the Class B Rights (other than
any Acquiring Person or Disqualified Transferee or any Affiliate of an Acquiring
Person or Disqualified Transferee). The Rights Agent shall join with the Company
in the execution and delivery of any such supplement or amendment, unless such
supplement or amendment affects any of the rights, duties, or obligations of the
Rights Agent hereunder, in which case the Rights Agent may, but shall not be
required to, join in such execution and delivery.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit
of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board; etc.
The Board 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 and with the
concurrence of a majority of the Board then in office shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Class B Rights and all other parties and (y) not subject any Director to any
liability to the holders of the Class B Rights.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent, and the registered holders of the Class B
Rights (and, prior to the Distribution Date, the associated shares of Class B
Common Stock) any legal or equitable right, remedy, or claim under this
Agreement or the Class B Rights; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent, and the registered holders
of the Class B Rights (and, prior to the Distribution Date, the associated Class
B Common Stock).
Section 31. Severability.
The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions,
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<PAGE>
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth day following the date of such determination by
the Board.
Section 32. Governing Law.
This Agreement and each Class B Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Vermont and
for all purposes shall be governed by and construed in accordance with the laws
of said State applicable to contracts to be made and performed entirely within
said State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and set their respective hands and seals, all as of the day and
year first above written.
BEN & JERRY'S HOMEMADE, INC.
By: _______________________________
Title: President and
Chief Executive Officer
Attest:
By: ___________________________________
Title:
AMERICAN STOCK TRANSFER TRUST
COMPANY
By: ______________________________
Title:
Attest:
By: ___________________________________
Title:
-41-
EXHIBIT A
FORM OF CLASS B RIGHTS CERTIFICATE
Certificate No. R- _______ Class B Rights
NOT EXERCISABLE AFTER JULY 30, 2008 OR EARLIER IF ORDER OF REDEMPTION IS GIVEN.
THE CLASS B RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER CLASS B RIGHT ON THE TERMS SET FORTH IN THE CLASS B RIGHTS AGREEMENT.
THE CLASS B RIGHTS, WHEN TRANSFERRED UNDER CERTAIN CIRCUMSTANCES SET FORTH IN
THE CLASS B RIGHTS AGREEMENT, BECOME CLASS A RIGHTS GOVERNED BY THE CLASS A
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, CLASS B RIGHTS BENEFICIALLY OWNED
BY AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES AND
ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE CLASS B
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH CLASS B RIGHTS MAY BECOME
NULL AND VOID. THE CLASS B RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO
LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION
TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE CLASS B
RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE
CLASS B RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY
A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES
AFFILIATES AND ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED
IN THE CLASS B RIGHTS AGREEMENT). ACCORDINGLY, THIS CLASS B RIGHTS CERTIFICATE
AND THE CLASS B RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE CLASS B RIGHTS AGREEMENT.]*
Class B Rights Certificate
BEN & JERRY'S HOMEMADE, INC.
This certifies that , or registered
- --------
* The portion of the legend in brackets shall be inserted only if applicable.
A-1
<PAGE>
assigns, is the registered owner of the number of Class B Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions, and conditions of the Class B Rights Agreement dated as of July 30,
1998 (the "Class B Rights Agreement") between Ben & Jerry's Homemade, Inc. (the
"Company"), and American Stock Transfer Trust Company (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Class B Rights Agreement) and prior to 5:00 p.m. (Burlington,
Vermont time) on July 30, 2008 (the "Expiration Date") at the office of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
share of Class B Common Stock, with a par value of $.033 per share ("Class B
Common Stock"), of the Company per each Class B Right represented hereby, at a
purchase price of $80.00 per share (the "Purchase Price") upon presentation and
surrender of this Class B Rights Certificate with the Form of Election to
Purchase set forth on the reverse side hereof and the certificate contained
therein duly completed and executed, accompanied by a signature guarantee and
such other documentation as the Rights Agent may reasonably request. The number
of Class B Rights evidenced by this Class B Rights Certificate (and the number
of shares which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as
of July 30, 1998 based on the shares of Class B Common Stock of the Company as
constituted at such date.
As more fully set forth in the Class B Rights Agreement, upon the
occurrence of a Common Stock Event (as such term is defined in the Class B
Rights Agreement), if the Class B Rights evidenced by this Class B Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate of
an Acquiring Person (as each such term is defined in the Class B Rights
Agreement) or (ii) a Disqualified Transferee (as defined in the Class B Rights
Agreement), such Class B Rights shall automatically become null and void and no
holder hereof shall have any right with respect to such Class B Rights from and
after the occurrence of such Common Stock Event.
The Class B Rights evidenced by this Class B Rights Certificate shall
not be exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such holder,
or the exercise by such holder, of the Class B Rights in such jurisdiction shall
not have been obtained or be obtainable.
As provided in the Class B Rights Agreement, the Purchase Price, and the
number and type of securities which may be purchased upon the exercise of the
Class B Rights evidenced by this Class B Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
In the circumstances described in Section 13 of the Class B Rights
Agreement, the securities issuable upon the exercise of the Class B Rights
evidenced hereby shall be the common stock or similar equity securities or
equity interests of an entity other than the Company.
A-2
<PAGE>
This Class B Rights Certificate is subject to all of the terms,
provisions, and conditions of the Class B Rights Agreement, which terms,
provisions, and conditions are hereby incorporated herein by reference and made
a part hereof and to which Class B 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 Class B Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Class B Rights under the
specific circumstances set forth in the Class B Rights Agreement. Copies of the
Class B Rights Agreement are on file at the office of the Rights Agent
designated for such purpose and may be obtained by the holder of any Class B
Rights upon written request to the Rights Agent.
This Class B Rights Certificate, with or without other Class B Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, accompanied by a signature guarantee and such other documentation
as the Rights Agent designated for such purpose may reasonably request, may be
exchanged for another Class B Rights Certificate or Class B Rights Certificates
of like tenor and date evidencing Class B Rights entitling the holder to
purchase a like aggregate number of shares of Class B Common Stock (or other
consideration, as the case may be) as the Class B Rights evidenced by the Class
B Rights Certificate or Class B Rights Certificates surrendered shall have
entitled such holder to purchase. If this Class B Rights Certificate shall be
exercised in part, the holder shall be entitled to receive, upon surrender
hereof, another Class B Rights Certificate or Class B Rights Certificates for
the number of whole Class B Rights not exercised.
Subject to the provisions of the Class B Rights Agreement, the Class B
Rights evidenced by this Class B Rights Certificate may be redeemed by the
Company by a majority vote of the Board (as defined in the Class B Rights
Agreement) then in office at any time prior to the earlier of the Distribution
Date or the Expiration Date, at a redemption price of $.01 per Class B Right
(which amount is subject to adjustment as provided in the Class B Rights
Agreement). In addition, in certain circumstances, the Rights may be exchanged,
in whole or in part, for shares of Class B Common Stock. Immediately upon the
action of the Board ordering the exchange of any Rights and without any further
action and without any notice, the right to exercise such Rights will terminate
and the only right thereafter of a holder of such Rights will be to receive that
number of shares of Class B Common Stock issuable upon the exchange.
The Company is not obligated to issue whole or fractional shares of
Class B Common Stock (or other securities) upon the exercise of any Class B
Right or Class B Rights evidenced hereby, but in lieu thereof a cash payment may
be made at the election of the Company, as provided in the Class B Rights
Agreement.
No holder of this Class B Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of Class B
Common Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall
A-3
<PAGE>
anything contained in the Class B Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any action by the Company, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Class B Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Class B Right or Class B Rights evidenced by this Class B Rights Certificate
shall have been exercised as provided in the Class B Rights Agreement.
This Class B Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
A-4
<PAGE>
WITNESS the facsimile signature of the proper officers and the seal of
the Company. Dated as of August 14, 1998.
BEN & JERRY'S HOMEMADE, INC.
By _____________________________________
Title:
ATTEST:
_______________________________
Title:
Countersigned:
________________________________________
AMERICAN STOCK TRANSFER TRUST
COMPANY
By _____________________________
Authorized Signatory
Date of Countersignature:
A-5
<PAGE>
[Form of Reverse Side of Class B Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Class B Rights Certificate)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto ______________________
____________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________ whose
social security or tax identification number is: ______________ the Class B
Rights evidenced by this Class B Rights Certificate, together with all right,
title and interest herein, and does hereby irrevocably constitute and appoint
____________________ Attorney, to transfer the within Class B Rights Certificate
on the books of the within-named Company, with full power of substitution.
Dated: _________________________, ____.
__________________________
Signature
Signature Guaranteed:*
- --------
* Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantees medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
A-6
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Class B Rights evidenced by this Class B Rights Certificate
[ ] are [ ] are not being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate of an Acquiring Person
(as each such term is defined in the Class B Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Class B Rights evidenced by this Class B Rights
Certificate after the occurrence of a Common Stock Event from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate of an Acquiring
Person.
Dated:____________________ ______________________________________
Signature
Signature Guaranteed:*
_______________________________
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Class B Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
A-7
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Class B Rights Certificate)
Ben & Jerry's Homemade, Inc.
The undersigned hereby irrevocably elects to exercise _________________
Class B Rights represented by this Class B Rights Certificate to purchase the
number of shares of Class B Common Stock (or other securities) issuable upon the
exercise of such Class B Rights and requests that certificates for such shares
be issued in the name of:
Please insert social security
or other identifying number ________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Class B Rights shall not be all the Class B Rights evidenced
by this Class B Rights Certificate, a new Class B Rights Certificate for the
balance remaining of such Class B Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number ________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: _______________________, ____
________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this Class
B Rights Certificate)
Signature Guaranteed:**
- --------
** Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
A-8
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Class B Rights evidenced by this Class B Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate of any such Acquiring Person (as each such term
is defined in the Class B Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Class B Rights evidenced by this Class B Rights
Certificate after the occurrence of a Common Stock Event (as such term is
defined in the Class B Rights Agreement) from any Person who is, was, or
subsequently became an Acquiring Person or an Affiliate of an Acquiring Person.
Dated: _________________, ____ _________________________
Signature
Signature Guaranteed:***
______________________________
- --------
*** Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
A-9
EXHIBIT B
BEN & JERRY'S HOMEMADE, INC.
SUMMARY OF CLASS B PURCHASE RIGHTS
On July 30, 1998, the Board of Directors (the "Board") of Ben & Jerry's
Homemade, Inc. (the "Company") declared a dividend of one Class B purchase right
(a "Class B Right") for every outstanding share of the Company's Class B Common
Stock, $.033 par value per share (the "Class B Common Stock"). The Class B
Rights will be distributed on August 14, 1998 to stockholders of record as of
the close of business on August 14, 1998 (the "Dividend Record Date"). The terms
of the Class B Rights are set forth in a Class B Rights Agreement dated as of
July 30, 1998 (the "Class B Rights Agreement") between the Company and American
Stock Transfer Trust Company (the "Rights Agent"). The Class B Rights Agreement
provides for the issuance of one Class B Right for every share of Class B Common
Stock issued and outstanding on the Dividend Record Date and for each share of
Class B Common Stock which is issued or sold after that date and prior to the
"Distribution Date" (as defined below). A similar rights agreement has been
adopted for holders of the Company's Class A Common Stock, $.033 par value per
share (the "Class A Common Stock").
Each Class B Right entitles the holder to purchase from the Company one
share of Class B Common Stock at a price of $80.00 per share, subject to
adjustment. The Class B Rights will expire on July 30, 2008 (the "Expiration
Date"), or upon the earlier redemption of the Class B Rights, and are not
exercisable until the Distribution Date.
No separate certificates representing the Class B Rights will be issued
at the present time. Until the Distribution Date (or earlier redemption or
expiration of the Class B Rights), (i) the Class B Rights will be evidenced by
the Class B Common Stock certificates and will be transferred with and only with
such Class B Common Stock certificates, (ii) new Class B Common Stock
certificates issued after the Dividend Record Date upon transfer or new issuance
of the Company's Class B Common Stock will contain a notation incorporating the
Class B Rights Agreement by reference and (iii) the surrender for transfer of
any of the Company's Class B Common Stock certificates will also constitute the
transfer of the Class B Rights associated with the Class B Common Stock
represented by such certificate.
The Class B Rights will separate from the Class B Common Stock and
certificates representing the Class B Rights will be issued on the Distribution
Date. Unless otherwise determined by a majority of the Board then in office, the
Distribution Date will occur on the earlier of (i) the tenth business day
following the later of (A) the date of a public announcement that a person,
including affiliates or associates of such person (an "Acquiring Person"),
except as described below, has acquired or obtained the right to acquire,
beneficial ownership of 15%
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or more of the outstanding shares of Class B Common Stock and Class A Common
Stock, taken as a whole (collectively, the "Common Stock") or (B) the date on
which an executive officer of the Company has actual knowledge that an Acquiring
Person became such (the later being, the "Stock Acquisition Date") or (ii) the
tenth business day following commencement of a tender offer or exchange offer
that would result in any person, together with its affiliates and associates
owning 15% or more of the Company's outstanding Common Stock. In any event, the
Board of Directors may delay the distribution of the certificates. After the
Distribution Date, separate certificates evidencing the Class B Rights ("Class B
Rights Certificates") will be mailed to holders of record of the Company's Class
B Common Stock as of the close of business on the Distribution Date and
thereafter, such separate Class B Rights Certificates alone will evidence the
Class B Rights.
If, at any time after the Board declares the Class B Rights dividend,
any person or group of affiliated or associated persons (other than the Company
and its affiliates) shall become an Acquiring Person, each holder of a Class B
Right will have the right to receive shares of the Company's Class B Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a market value of two times the exercise price of the Class B
Right. For example, if the exercise price is $80.00, the holder of each Class B
Right would be entitled to receive $160.00 in market value of the Company's
Class B Common Stock for $80.00. Also, in the event that at any time after the
Stock Acquisition Date, the Company was acquired in a merger or other business
combination, or if more than 25% of its assets or earning power was sold, each
holder of a Class B Right would have the right to exercise such Class B Right
and thereby receive common stock of the acquiring company with a market value of
two times the exercise price of the Class B Right. Thus, if the exercise price
is $80.00, the holder of each Class B Right would be entitled to receive $160.00
in market value of the acquiring company's common stock upon payment of the
$80.00. Following the occurrence of any of the events described in this
paragraph, any Class B Rights that are, or (under certain circumstances
specified in the Class B Rights Agreement) were, beneficially owned by any
Acquiring Person or Disqualified Transferee shall immediately become null and
void.
The Board may, at its option, at any time after any person becomes an
Acquiring Person, exchange all or part of the then outstanding and exercisable
Class B Rights for shares of Class B Common Stock (or, other securities of the
Company equivalent in value to such shares of Class B Common Stock) at an
exchange ratio of one share of Class B Common Stock (or other such
consideration) per Class B Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date of
declaration of the Class B Rights dividend (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). The Board, however, may not
effect an exchange at any time after any person (other than (i) the Company,
(ii) any subsidiary of the Company, (iii) any employee benefit plan of the
Company or any such subsidiary or any entity holding Common Stock for or
pursuant to the terms of any such plan), together with all affiliates of such
person, becomes the beneficial
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owner of 50% or more of the Common Stock then outstanding. Immediately upon the
action of the Board ordering the exchange of any Class B Rights and without any
further action and without any notice, the right to exercise such Class B Rights
will terminate and the only right thereafter of a holder of such Class B Rights
will be to receive that number of shares of Class B Common Stock equal to the
number of such Class B Rights held by the holder multiplied by the Exchange
Ratio.
The exercise price of the Class B Rights, and the number of shares of
Class B Common Stock or other consideration issuable upon exercise of the Class
B Rights, are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Class B Common Stock, (ii) upon the grant to holders of
the Class B Common Stock of certain rights or warrants to subscribe for shares
of the Class B Common Stock or convertible securities at less than the current
market price of the Class B Common Stock or (iii) upon the distribution to
holders of the Class B Common Stock of evidences of indebtedness or assets
(excluding cash dividends paid out of the earnings or retained earnings of the
Company and certain other distributions) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustments in the exercise price of the
Class B Rights will be required until cumulative adjustments equal at least 1%
in such price.
At any time prior to the earlier of (i) the Distribution Date or (ii)
the close of business ten years after the Class B Rights Agreement becomes
effective (the "Expiration Date"), the Company, by a majority vote of the Board
then in office, may redeem the Class B Rights at a redemption price of $.01 per
Class B Right (the "Redemption Price"), as described in the Class B Rights
Agreement. Immediately upon the action of the Board electing to redeem the Class
B Rights, the right to exercise the Class B Rights will terminate and the only
right of the holders of Class B Rights will be to receive the Redemption Price.
Until a Class B Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
Neither the distribution of the Class B Rights nor the subsequent
separation of the Class B Rights on the Distribution Date will be a taxable
event for the Company or its stockholders. Holders of Class B Rights may,
depending upon the circumstances, recognize taxable income upon the occurrence
of certain Class B Rights triggering events including a tender offer for 15% or
more of the Common Stock or a person or group attaining beneficial ownership of
15% or more of the Common Stock (collectively, "Common Stock Events"). In
addition, holders of Class B Rights may have taxable income as a result of (i)
an exchange by the Company of shares of Class B Common Stock for Class B Rights
as described above or (ii)
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certain anti-dilution adjustments made to the terms of the Class B Rights after
the Distribution Date. A redemption of the Class B Rights would be a taxable
event to holders.
The Class B Rights Agreement may be amended by the Board at any time
prior to the Distribution Date without the approval of the holders of the Class
B Rights. From and after the Distribution Date, the Class B Rights Agreement may
be amended by the Board without the approval of the holders of the Class B
Rights in order to cure any ambiguity, to correct any defective or inconsistent
provisions, to change any time period for redemption or any other time period
under the Class B Rights Agreement or to make any other changes that do not
adversely affect the interests of the holders of the Class B Rights (other than
any Acquiring Person or its affiliates or associates or their transferees).
A copy of the Class B Rights Agreement will be filed with the Securities
and Exchange Commission as an Exhibit to the Company's Form 8-A registration
statement with respect to the Class B Rights. A copy of the Class B Rights
Agreement is available free of charge from the Rights Agent, at the following
address:
American Stock Transfer Trust Company
40 Wall Street
New York, NY 10005
(Ben & Jerry's Homemade, Inc. Class B Rights Agreement)
This summary description of the Class B Rights does not purport to be complete
and is qualified in its entirety by reference to the Class B Rights Agreement,
which is incorporated herein by reference.
B-4
BEN & JERRY'S HOMEMADE, INC. ADOPTS SHAREHOLDER RIGHTS PLANS
SOUTH BURLINGTON, VT -- August 13, 1998 -- Ben & Jerry's Homemade, Inc.
(NASDAQ NMS: BJICA) announced today that its Board of Directors has adopted
shareholder rights plans for each of its Class A Common Stock and Class B Common
Stock. Ben & Jerry's stated that the rights plans are designed to assure that
Ben & Jerry's shareholders receive fair and equitable treatment in the event of
an unsolicited attempt to acquire the company. Under the plans embodied in the
two Rights Agreements, each holder of record of Class A Common Stock on August
14, 1998 will receive a dividend of one Class A right for each such share and
each holder of record of Class B Common Stock on August 14, 1998 will receive a
dividend of one Class B right for each such share. Shares of Class A Common
Stock issued after that date will be issued with an attached Class A right and
shares of Class B Common Stock issued after that date will be issued with an
attached Class B right.
Each right entitles shareholders to buy one share of Ben & Jerry's Class
A or Class B Common Stock, as the case may be, at an exercise price of $80 per
share, subject to adjustments for stock dividends, splits and similar events.
The rights will be exercisable for shares of Ben & Jerry's stock if a person or
group (an acquiring person) acquires 15% or more of the outstanding shares of
Ben & Jerry's Class A and Class B common stock (taken together as a single
class) or announces a tender or exchange offer that would result in an acquiring
person owning 15% or more of the outstanding Class A and Class B common stock
(taken together as a single class). The rights will be exercisable for the stock
of an acquiring person if at any time after Ben & Jerry's has knowledge that any
person has become an acquiring person, Ben & Jerry's is acquired in a merger or
other business combination, or more than 25% of the assets or earning power of
Ben & Jerry's is sold.
The Board of Directors may redeem the rights at a redemption price of
$.01 per right at any time prior to the earlier of the separation of the rights
from underlying Class A or Class B Common Stock after a triggering event or July
30, 2008, and may freely amend the rights without approval of the holders of the
Class A rights or the Class B rights, as the case may be, until the rights
become exercisable, and thereafter to a much more limited extent. Distribution
of the rights is not a taxable event to shareholders. Additional details
regarding the respective shareholder rights plans will be outlined in letters
that will be mailed to Class A and Class B shareholders respectively.
Although Dreyer's Grand Ice Cream, Inc. had made overtures towards
acquiring the Company earlier in 1998, Ben & Jerry's stated that the rights
plans were not adopted in response to any outside effort to gain control of the
company, and that it is not aware of any takeover attempt.
Ben & Jerry's produces super premium ice cream, ice cream novelties,
low-fat ice cream, low-fat and non-fat frozen yogurt, and sorbet using Vermont
dairy products, Vermont spring water, and high quality natural ingredients.
Ben & Jerry's products are distributed nationwide and in selected foreign
countries in supermarkets, grocery stores, convenience stores, scoop shops,
restaurants and other venues.
