SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
------------------------
FORM 8-A/A-1
AMENDING FORM 8-A DATED, OCTOBER 18, 1995
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PIONEER HI-BRED INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
IOWA 42-0470520
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
700 Capital Square, 400 Locust Street,
Des Moines, Iowa 50309
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class registered Name of each exchange on which
each class is registered
- ------------------------------ --------------------------------
Preferred Share Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
- --------------------------------------------------------------------------------
(Title of Class)
<PAGE>
This Form 8-A/A-1 amends and supplements in its entirety the Form 8-A (the "Form
8-A") filed by Pioneer Hi-Bred International, Inc., an Iowa corporation (the
"Company") on October 18, 1995 with respect to the Shareholders Rights Plan of
the Company.
Item 1. Description of Securities to be Registered.
On April 6, 1989, the Board of Directors of the Company declared
a dividend of one common share purchase right (a "Right") for each outstanding
share of Common Stock, par value of One Dollar ($.1.00) per share (the "Common
Shares"), of the Company. The dividend was paid to the stockholders of record as
of 5:00 P.M., Boston, Massachusetts time, on April 6, 1989 (the "Record Date"),
and either was paid or is payable with respect to Common Shares issued
thereafter until the Distribution Date (as hereinafter defined) and, in certain
circumstances, is payable with respect to Common Shares issued after the
Distribution Date. Since April 6, 1989, the terms of the Rights have been
amended on December 13, 1994 and on December 13, 1996 to, among other things,
modify the Rights so that each Right represents the Right to purchase one
one-thousandth of a Preferred Share (as hereinafter defined).
On December 13, 1996, the Board of Directors of the Company
adopted amendments to the Rights Agreement (the "Prior Rights Agreement"), dated
as of April 6, 1989, as amended and restated on December 13, 1994 between the
Company and The First National Bank of Boston (the "Rights Agent") pursuant to
which the Rights registered under this Form 8-A were issued. The amendments are
set forth in an Amended and Restated Rights Agreement (the "Rights Agreement")
dated as of December 13, 1996 between the Company and the Rights Agent, which
supersedes the Prior Rights Agreement. A copy of the Rights Agreement is
attached as an exhibit hereto and is hereby incorporated by reference. The
following summary of the Rights is qualified in its entirety by reference to the
Rights Agreement.
Pursuant to the Rights Agreement, as of the date of this Form
8-A/A-1, there is associated with each outstanding Common Share one Right which,
except as set forth below, when exercisable, entitles the registered holder to
purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred Shares"), at a
price of $250.00 per one one-thousandth of a Preferred Share (the "Purchase
Price"), subject to adjustment.
The Rights are attached to all certificates representing
outstanding Common Shares, and no separate Right Certificates (as hereinafter
defined) have been distributed. The Rights will separate from the Common Shares
on the earliest to occur of (i) the first date of public announcement that a
person or "group" (other than a Grandfathered Person, as hereinafter defined)
has acquired beneficial ownership of the Trigger Amount (as hereinafter defined)
or more of the outstanding Common Shares (except pursuant to a Permitted Offer,
as hereinafter defined); or (ii) ten (10) business days (or such later date as
the Board of Directors of the Company may determine) following the commencement
of, or announcement of an intention to commence, a tender offer or exchange
offer the consummation of which would result in a person or group becoming an
Acquiring Person (as hereinafter defined) (the earliest of such dates being
called the "Distribution Date"). A person or group whose acquisition of Common
Shares causes a Distribution Date pursuant to clause (i) above is an "Acquiring
Person". The first date of public announcement that a person or group has become
an Acquiring Person is the "Shares Acquisition Date". The "Trigger Amount" means
the lesser of: (i) 15% of the outstanding Common Shares, or (ii) 10% of
outstanding Common Shares, provided that such 10% represents one-fourth (1/4) of
the combined voting power of the Common Shares then outstanding for the election
of directors generally. "Grandfathered Persons" include any descendant of Henry
A. Wallace (the deceased founder of the Corporation), or any spouse, widow or
widower of any such descendant, and certain affiliated entities of any of the
foregoing; provided, however, that a Grandfathered Person shall cease to be a
Grandfathered Person if any of the following occur at any time: (A) all or any
part of such Grandfathered Person's interest in the Common Shares becomes
reportable on a Schedule 13D under the Exchange Act (or any comparable or
successor report) as part of a "group" (as such term is defined or used under
Rule 13d-5(b) of the General Rules and Regulations under the Exchange Act) which
Beneficially Owns, directly or indirectly, the Trigger Amount or more of the
then outstanding Common Shares and includes one or more Persons (including any
Affiliate or Associate thereof) who (x) are not Grandfathered Persons and (y)
individually or in the aggregate beneficially own, directly or indirectly, in
excess of 1% of the then outstanding Common Shares; (B) such Grandfathered
Person, individually or together with one or more other Persons, acting together
or as part of a "group", Beneficially Owns (together with all Common Shares then
Beneficially Owned) 20% or more of the outstanding Common Shares; (C) such
Grandfathered Person (together with any spouse and any children under the age of
18 years of that Grandfathered Person) individually Beneficially Owns the
Trigger Amount or more (but excluding any Common Shares that such Grandfathered
Person may be deemed to be Beneficially Owned by reason of being part of a
"group"); provided, however, that no Grandfathered Person shall lose its, his or
her status as a Grandfathered Person pursuant to this clause (C) if a bona fide
gift or bona fide inheritance (including being named as executor or to another
similar position) causes the Beneficial Ownership of Common Shares by such
Grandfathered Person (together with any spouse and any children under the age of
18 years of that Grandfathered Person) to equal or exceed the Trigger Amount (it
being understood, however, that the foregoing proviso shall not apply if such
Grandfathered Person (together with any spouse and any children under the age of
18 years of that Grandfathered Person) increases its, his or her Beneficial
Ownership after equaling or exceeding the Trigger Amount except by bona fide
gift or bona fide inheritance (including being named as executor or to another
similar position)); or (D) such Grandfathered Person (together with any spouse
and children under the age of 18 years of that Grandfathered Person)
individually Beneficially Owns 15% or more of the outstanding Common Shares
(excluding any Common Shares that such Grandfathered Person may be deemed to be
Beneficially Owned by reason of being part of a group).
The Rights Agreement provides that until the Distribution Date
the Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares have contained and will continue to contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date (and to each initial record
holder of certain Common Shares issued after the Distribution Date), and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M., Boston, Massachusetts time, on December 13, 2006,
unless earlier redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a Permitted Offer as hereinafter defined), each holder of a Right
will have (subject to the terms of the Rights Agreement) the right (the "Flip-In
Right") to receive upon exercise the number of Common Shares, or, in the
discretion of the Board of Directors of the Company, the number of one
one-thousandths of a Preferred Share (or, in certain circumstances, other
securities of the Company) having a value (immediately prior to such triggering
event) equal to two times the Purchase Price. Notwithstanding the foregoing,
following the occurrence of the event described above, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or associate thereof
will be null and void. A "Permitted Offer" is a tender or exchange offer for all
outstanding Common Shares which is at a price and on terms determined, prior to
the purchase of shares under such tender or exchange offer, by a majority of
Disinterested Directors (as hereinafter defined) to be adequate (taking into
account all factors that such Disinterested Directors deem relevant) and
otherwise in the best interests of the Company and its stockholders (other than
the person or any affiliate or associate thereof on whose basis the offer is
being made) taking into account all factors that such Disinterested Directors
may deem relevant. "Disinterested Directors" are directors of the Company who
are not officers of the Company and who are not Acquiring Persons or affiliates
or associates thereof, or representatives of any of them, or any person who was
directly or indirectly proposed or nominated as a director of the Company by an
Interested Stockholder (as hereinafter defined). "Interested Stockholder" is any
stockholder of the Company who is also an Acquiring Person or its Affiliates or
Associates.
In the event that, at any time following the Shares Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Company's assets or earning power is sold or transferred, in either case with or
to an Acquiring Person or any affiliate or associate thereof, or any other
person in which such Acquiring Person, affiliate or associate has an interest,
or any person acting on behalf of or in concert with such Acquiring Person,
affiliate or associate, or, if in such transaction all holders of Common Shares
are not treated alike, any other person, then each holder of a Right (except
Rights which previously have been voided as set forth above) shall thereafter
have the right (the "Flip-Over Right") to receive, upon exercise, common shares
of the acquiring company having a value equal to two times the Purchase Price.
The Purchase Price payable, and the number of one-thousandths of
a Preferred Share or other securities issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of indebtedness
or assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
The Purchase Price is also subject to adjustment in the event of
a stock split of the Common Shares, or a stock dividend on the Common Shares
payable in Common Shares, or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional one-thousandths of a Preferred Share will be
issued, and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $230.00 per share but, if greater, will be
entitled to an aggregate dividend per share of 1,000 times the dividend declared
per Common Share. In the event of liquidation, the holders of the Preferred
Shares will be entitled to a minimum preferential liquidation payment of
$1,000.00 but will be entitled to an aggregate payment per share of 1,000 times
the aggregate payment made per Common Share. Each Preferred Share will have five
thousand votes (or one thousand votes if the holder thereof would have been
entitled to no more than one vote per share under Article IV.B of the Amended
and Restated Articles of Incorporation of the Company had such Preferred Share
been a Common Share), voting together with the Common Shares. These rights are
protected by customary antidilution provisions. In the event that the amount of
accrued and unpaid dividends on the Preferred Shares is equivalent to at least
six full quarterly dividends, the holders of the Preferred Shares shall have the
right, voting as a class, to elect two directors in addition to the directors
elected by the holders of the Common Shares until all dividends in default on
the Preferred Shares have been paid in full and dividends for the current
dividend period declared and funds therefor set apart.
At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights, the Company
may redeem the Rights in whole, but not in part, at a price of one-third of a
cent per Right (the "Redemption Price"), which redemption shall be effective
upon the action of the Board of Directors of the Company. Additionally, the
Company may redeem the then outstanding Rights in whole, but not in part, at the
Redemption Price after the triggering of the Flip-In Right and before the
expiration of any period during which the Flip-In Right may be exercised (x) in
connection with a merger or other business combination transaction or series of
transactions involving the Company in which all holders of Common Shares are
treated alike but not involving an Interested Stockholder or (y) if the
Acquiring Person no longer Beneficially Owns 10% or more of the then outstanding
Common Shares and no other Persons are Acquiring Persons. Upon the effective
date of the redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Until 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. While the distribution of the Rights
will not be taxable to stockholders of the Company, stockholders may, depending
upon the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.
The form of Rights Agreement specifying the terms of the Rights,
Exhibit A thereto -- the Form of Articles of Amendment setting forth the terms
of the Series A Junior Participating Preferred Stock, Exhibit B thereto -- the
Form of Rights Certificate, and Exhibit C thereto -- the Summary of Rights to
Purchase Preferred Shares, are attached hereto as Exhibit 1 and are incorporated
herein by reference. The foregoing description of the Rights is qualified by
reference to the Amended and Restated Rights Agreement.
Item 2. Exhibits.
1 Form of Amended and Restated Rights Agreement (the "Rights
Agreement") dated as of December 13, 1996 between Pioneer
Hi-Bred International, Inc. and The First National Bank of
Boston which includes, as Exhibit A thereto, the Form of
Articles of Amendment specifying the terms of the Series A
Junior Participating Preferred Stock, as Exhibit B
thereto, the form of Rights Certificate and as Exhibit C
thereto, the Summary of Rights to Purchase Preferred
Shares. Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until a person acquires
beneficial ownership of the Trigger Amount (as defined in
the Rights Agreement) or more of the Common Shares or 10
days (or such later date as the Board of Directors of the
Company may determine) after a person commences or
announces its intention to commence an offer if, upon
consummation thereof, such person would become an
Acquiring Person (as defined in the Rights Agreement) or
prior to certain transactions involving the Company.
2 Press release announcing the amendment of the Rights Plan
dated December 13, 1996.
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereto duly authorized.
Pioneer Hi-Bred International, Inc.
By: /s/ Charles S. Johnson
_________________________
Name: Charles S. Johnson
Title: President and Chief
Executive Officer
Date: December 13, 1996
<PAGE>
EXHIBIT INDEX
Exhibit Description
1 Form of Amended and Restated Rights Agreement (the "Rights
Agreement") dated as of December 13, 1996 between Pioneer
Hi-Bred International, Inc. and The First National Bank of
Boston which includes, as Exhibit A thereto, the Form of
Articles of Amendment specifying the terms of the Series A
Junior Participating Preferred Stock, as Exhibit B thereto, the
form of Rights Certificate and as Exhibit C thereto, the
Summary of Rights to Purchase Preferred Shares. Pursuant to the
Rights Agreement, Rights Certificates will not be mailed until
a person acquires beneficial ownership of the Trigger Amount
(as defined in the Rights Agreement) or more of the Common
Shares or 10 days (or such later date as the Board of Directors
of the Company may determine) after a person commences or
announces its intention to commence an offer if, upon
consummation thereof, such person would become an Acquiring
Person (as defined in the Rights Agreement) or prior to certain
transactions involving the Company.
2 Press release announcing the amendment of the Rights Plan
dated December 13, 1996.
<PAGE>
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PIONEER HI-BRED INTERNATIONAL, INC.
and
THE FIRST NATIONAL BANK OF BOSTON, as
Rights Agent
-----------------------------
Amended and Restated Rights Agreement
-----------------------------
Dated as of December 13, 1996
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<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Certain Definitions.........................................2
SECTION 2. Appointment of Rights Agent................................10
SECTION 3. Issue of Right Certificates................................11
SECTION 4. Form of Right Certificate..................................14
SECTION 5. Countersignature and Registration..........................15
SECTION 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificate........................................16
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights................................................17
SECTION 8. Cancellation and Destruction of Right Certificates.........21
SECTION 9. Reservation and Availability of Capital Stock..............21
SECTION 10. Preferred Shares Record Date...............................23
SECTION 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights...............................24
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares...................................................36
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.........................................36
SECTION 14. Fractional Rights and Fractional Shares....................40
SECTION 15. Rights of Action...........................................43
SECTION 16. Agreement of Right Holders.................................43
SECTION 17. Right Certificate Holder Not Deemed a Stockholder..........45
SECTION 18. Concerning the Rights Agent................................45
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agent....................................................46
SECTION 20. Duties of Rights Agent.....................................47
SECTION 21. Change of Rights Agent.....................................50
SECTION 22. Issuance of New Right Certificates.........................51
SECTION 23. Redemption and Termination.................................52
SECTION 24. Exchange...................................................54
SECTION 25. Notice of Certain Events...................................56
SECTION 26. Notices....................................................57
SECTION 27. Supplements and Amendments.................................58
SECTION 28. Determination and Actions by the Board, etc................59
SECTION 29. Successors.................................................60
SECTION 30. Benefits of this Agreement.................................60
SECTION 31. Severability...............................................60
SECTION 32. Governing Law..............................................60
SECTION 33. Counterparts...............................................61
SECTION 34. Descriptive Headings.......................................62
EXHIBIT A - Certificate of Designation, Preferences and Rights of
Series A Participating Preferred Stock of Pioneer Hi-Bred
International, Inc.
EXHIBIT B - Form of Right Certificate
EXHIBIT C - Revised Summary of Rights to Purchase Preferred Shares
<PAGE>
DEFINED TERM CROSS REFERENCE SHEET
Acquiring Person............................................... Section 1(a)
Act............................................................ Section 1(b)
Adjusted Number of Shares...................................... Section 11(a)
Adjusted Purchase Price........................................ Section 11(a)
Adjustment Shares.............................................. Section 11(a)
Affiliate..................................................... Section 1(c)
Agreement...................................................... Preface
Amended and Restated Rights Agreement.......................... Section 3(c)
Associate...................................................... Section 1(c)
beneficially own............................................... Section 1(d)
Beneficial Owner............................................... Section 1(d)
Board.......................................................... Preface
Business Day................................................... Section 1(e)
capital stock equivalent....................................... Section 11(a)
Close of Business.............................................. Section 1(f)
Common Shares.................................................. Section 1(g)
Company........................................................ Preface
current per share market price................................. Section 11(d)
Disinterested Directors........................................ Section 1(h)
Distribution Date.............................................. Section 3(a)
equivalent preferred shares.................................... Section 11(b)
Exchange Act................................................... Section 1(c)
Exchange Ratio................................................. Section 24(a)
Final Expiration Date.......................................... Section 7(a)
Grandfathered Person........................................... Section 1(i)
Interested Stockholder......................................... Section 1(j)
NASDAQ......................................................... Section 11(d)
Permitted Offer................................................ Section 1(k)
Person......................................................... Section 1(l)
Preferred Shares............................................... Section 1(m)
Principal Party............................................... Section 13(b)
Proration Factor............................................... Section 11(a)
Purchase Price................................................ Section 4(a)
Record Date.................................................... Preface
Redemption Date................................................ Section 7(a)
Redemption Price............................................... Section 23(a)
Revised Summary of Rights...................................... Section 3(b)
Right.......................................................... Preface
Right Certificate.............................................. Section 3(a)
Rights Agent................................................... Preface
Section 11(a)(ii) Event........................................ Section 1(n)
Section 13 Event............................................... Section 1(o)
Security....................................................... Section 11(d)
Shares Acquisition Date........................................ Section 1(p)
Subsidiary..................................................... Section 1(q)
Summary of Rights.............................................. Section 3(b)
then outstanding............................................... Section 1(d)
Trading Day.................................................... Section 11(d)
Trigger Amount................................................. Section 1(r)
Triggering Event............................................... Section 1(s)
voting securities.............................................. Section 13(a)
<PAGE>
AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of December 13,
1996, between Pioneer Hi-Bred International, Inc., an Iowa corporation (the
"Company"), and The First National Bank of Boston, a national banking
association ("Rights Agent").
On April 6, 1989, the Board of Directors of the Company (the
"Board") authorized and declared a dividend of one common share purchase right
(a "Right") for each Common Share (as hereinafter defined) of the Company
outstanding at the Close of Business (as hereinafter defined) on April 6, 1989
(the "Record Date"), each Right representing the right to purchase one (subject
to adjustment as provided herein) Common Share (as hereinafter defined), upon
the terms and subject to the conditions herein set forth, and has further
authorized the issuance of one Right with respect to each Common Share that
shall become outstanding between the Record Date and the Distribution Date (as
such term is hereinafter defined); provided, however, that Rights may be issued
with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date and the Final
Expiration Date in accordance with the provisions of Section 22 hereof.
On December 13, 1994, the Board previously amended and modified
the terms of the Rights Agreement, dated as of April 6, 1989, between the
Company and the Rights Agent, and on December 13, 1996, the Board authorized the
execution and delivery of this Agreement which amends and restates such Rights
Agreement in its entirety to, among other things, modify the Rights so that each
Right represents the right to purchase one one-thousandth of a Preferred Share
(as hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
<PAGE>
SECTION 1. Certain Definitions. For purposes of this Agreement,
the following terms shall have the meanings indicated:
(a)...."Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of the Trigger Amount or more of the then outstanding Common
Shares (other than as a result of a Permitted Offer) or was such a Beneficial
Owner at any time after the date hereof, whether or not such person continues to
be the Beneficial Owner of the Trigger Amount or more of the then outstanding
Common Shares. Notwithstanding the foregoing, (i) the term "Acquiring Person"
shall not include (A) the Company, (B) any Subsidiary of the Company, (C) any
employee benefit plan of the Company or of any Subsidiary of the Company, (D)
any Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan acting in such capacity or (E) any
Grandfathered Person; and (ii) no Person shall become an "Acquiring Person" (x)
as a result of the acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding, increases the proportional
number of shares beneficially owned by such Person together with all Affiliates
and Associates of such Person, provided, that if (1) a Person would become an
Acquiring Person (but for the operation of this clause (x)) as a result of the
acquisition of Common Shares by the Company, and (2) after such share
acquisition by the Company, such Person, or an Affiliate or Associate of such
Person, becomes the Beneficial Owner of any additional Common Shares, then such
Person shall be deemed an Acquiring Person, or (y) if (1) within five Business
Days after such Person would otherwise have become or, if such Person did so
inadvertently, after such Person discovers that such Person would otherwise have
become, an Acquiring Person (but for the operation of this clause (y)), such
Person notifies the Board that such Person did so inadvertently, and (2) within
two Business Days after such notification (or such greater period of time as may
be determined by action of the Board, but in no event greater than five Business
Days), such Person divests itself of a sufficient number of Common Shares so
that such Person is the Beneficial Owner of such number of Common Shares that
such Person no longer would be an Acquiring Person.
(b)...."Act" shall mean the Securities Act of 1933, as amended
and as in effect on the date of this Agreement.
(c)...."Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and as in
effect on the date of this Agreement (the "Exchange Act").
(d)....A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, or
(B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities)
relating to the acquisition, holding, voting (except to the extent
contemplated by the proviso to Section l(d)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of a Beneficial Owner
to the contrary, the phrase "then outstanding", when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e)...."Business Day" shall mean any day other than a Saturday,
Sunday, U.S. federal holiday or any day on which banking institutions in Boston
are authorized or obligated by law or executive order to close.
(f)...."Close of Business" on any given date shall mean 5:00
P.M., Boston time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston time, on the next succeeding
Business Day.
(g)...."Common Shares" when used with reference to the Company
shall mean the shares of Common Stock, par value of One Dollar ($1.00) per
share, of the Company or, in the event of a subdivision, combination or
consolidation with respect to such shares of Common Stock, the shares of Common
Stock resulting from such subdivision, combination or consolidation. "Common
Shares" when used with reference to any Person other than the Company shall mean
the capital stock (or equity interest) with the greatest combined economic and
voting power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person.
(h)...."Disinterested Directors" shall mean the members of the
Board who are not (i) employees of the Company, (ii) Acquiring Persons or their
Affiliates or Associates or representatives of any of them, or (iii) any Person
who was directly or indirectly proposed or nominated as a director of the
Company by an Interested Stockholder.
(i)...."Grandfathered Person" shall mean any of the following:
(i) any descendant of Henry A. Wallace (the deceased
founder of the Corporation), or any spouse, widow or widower of
any such descendant (any such descendants, spouses, widows and
widowers collectively defined as the "Wallace Family Members");
(ii) any trust (including any voting trust) which is in
existence on the date of this Agreement and which has been
established by Henry A. Wallace or one or more Wallace Family
Members, any estate of, or the executor or administrator of any
estate of, or any guardian or custodian for, a Wallace Family
Member who died on or before the date of this Agreement provided
that one or more Wallace Family Members or Wallace Family
Entities, collectively, are the beneficiaries of 80% of the
actuarially-determined beneficial interests in such estate or
trust (such trusts, estates, executors, administrators or
guardians or custodians collectively defined as the "Wallace
Family Entities");
(iii) any estate of, or the executor or administrator of
any estate of, or any guardian or custodian for, a Wallace Family
Member who dies after the date of this Agreement, or any trust
established after the date hereof by one or more Wallace Family
Members or Wallace Family Entities, provided that one or more
Wallace Family Members or Wallace Family Entities, collectively,
are the beneficiaries of 80% of the actuarially-determined
beneficial interests in such estate or trust;
(iv) any charitable organization which qualifies as an
exempt organization under Section 501(c) of the Internal Revenue
Code of 1986, as amended ("Charitable Organization") which is
established by one or more Wallace Family Members or Wallace
Family Entities (a "Wallace Family Charitable Organization");
(v) any corporation of which 100% of the voting power and
100% of the equity interest is held, directly or indirectly, by
or for the benefit of one or more Wallace Family Members, Wallace
Family Entities, estates, executors, administrators, guardians or
custodians or trusts described in clause (iii) above, or Wallace
Family Charitable Organizations; and
(vi) any general partnership, limited partnership,
organization or other entity or arrangement of which 100% of the
voting interest and 100% of the economic interest is held,
directly or indirectly, by or for the benefit of one or more
Wallace Family Members, Wallace Family Entities, estates,
executors, administrators, guardians or custodians, or trusts
described in clause (iii) above, or Wallace Family Charitable
Organizations;
provided, however, that a Grandfathered Person shall cease to be
a Grandfathered Person if any of the following occur at any time:
(A) all or any part of such Grandfathered Person's interest in
the Common Shares becomes reportable on a Schedule 13D under the
Exchange Act (or any comparable or successor report) as part of a
"group" (as such term is defined or used under Rule 13d-5(b) of
the General Rules and Regulations under the Exchange Act) which
Beneficially Owns, directly or indirectly, the Trigger Amount or
more of the then outstanding Common Shares and includes one or
more Persons (including any Affiliate or Associate thereof) who
(x) are not Grandfathered Persons and (y) individually or in the
aggregate beneficially own, directly or indirectly, in excess of
1% of the then outstanding Common Shares; (B) such Grandfathered
Person, individually or together with one or more other Persons,
acting together or as part of a "group", Beneficially Owns
(together with all Common Shares then Beneficially Owned) 20% or
more of the outstanding Common Shares; (C) such Grandfathered
Person (together with any spouse and any children under the age
of 18 years of that Grandfathered Person) individually
Beneficially Owns the Trigger Amount or more (but excluding any
Common Shares that such Grandfathered Person may be deemed to be
Beneficially Owned by reason of being part of a "group");
provided, however, that no Grandfathered Person shall lose its,
his or her status as a Grandfathered Person pursuant to this
clause (C) if a bona fide gift or bona fide inheritance
(including being named as executor or to another similar
position) causes the Beneficial Ownership of Common Shares by
such Grandfathered Person (together with any spouse and any
children under the age of 18 years of that Grandfathered Person)
to equal or exceed the Trigger Amount (it being understood,
however, that the foregoing proviso shall not apply if such
Granfathered Person (together with any spouse and any children
under the age of 18 years of that Grandfathered Person) increases
its, his or her Beneficial Ownership after equalling or exceeding
the Trigger Amount except by bona fide gift or bona fide
inheritance (including being named as executor or to another
similar position)); or (D) such Grandfathered Person (together
with any spouse and children under the age of 18 years of that
Grandfathered Person) individually Beneficially Owns 15% or more
of the outstanding Common Shares (excluding any Common Shares
that such Grandfathered Person may be deemed to be Beneficially
Owned by reason of being part of a group).
For purposes of the definition of Grandfathered Person, the term
"descendant" shall be deemed to include adopted children and the issue of such
adopted children, including adopted issue, provided that any such adoptee is
adopted before his or her eighteenth birthday.
(j)...."Interested Stockholder" shall mean any Acquiring Person
or any Affiliate or Associate of an Acquiring Person or any other Person in
which any such Acquiring Person, Affiliate or Associate has an interest which
represents in excess of 5% of the total combined economic or voting power of
such Person, or any other Person acting directly or indirectly on behalf of, or
in concert with, any such Acquiring Person, Affiliate or Associate.
(k)...."Permitted Offer" shall mean a tender or exchange offer
for all outstanding Common Shares which is at a price and on terms determined,
prior to the purchase of such shares under such tender or exchange offer, by at
least a majority of the Disinterested Directors, to be adequate and otherwise in
the best interests of the Company and its stockholders (other than the Person,
or any Affiliate or Associate thereof, on whose behalf the offer is being made)
taking into account all factors, including, without limitation, consideration of
interests as provided in Section 490.1108 of the Iowa Business Corporation Act,
that such Disinterested Directors may deem relevant.
(l)...."Person" shall mean any individual, firm, partnership,
corporation, trust, association, joint venture or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(m)...."Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, without par value, of the Company having the
relative rights, preferences and limitations set forth in the Form of
Certificate of Designation, Preferences and Rights attached to this Agreement as
Exhibit A.
(n)...."Section 11(a)(ii) Event" shall mean any event defined in
Section 11(a)(ii) hereof.
(o)...."Section 13 Event" shall mean any event described in
clause (i), (ii) or (iii) of Section 13(a) hereof.
(p)...."Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such.
(q)...."Subsidiary" of any Person shall mean any corporation or
other Person of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
(r)...."Trigger Amount" shall mean the lesser of:
(i) 15% or more of the Common Shares then outstanding;
or
(ii) 10% or more of the Common Shares then outstanding,
but only when and if such Common Shares represent one-fourth
(1/4) or more of the combined voting power of the Common Shares
then outstanding for the election of directors generally. As to
any Beneficial Owner (and its Affiliates and Associates) with
respect to which the Trigger Amount is being determined, the
voting power will be determined by the Company in the ordinary
course of corporate governance relating to the determination of
voting power with respect to actions submitted to a vote of
stockholders assuming such holder has taken the necessary
documentation steps to have effectuated the right to have five
votes per Common Share.
(s)...."Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
SECTION 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of Common Shares) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable.
SECTION 3. Issue of Right Certificates. (a) The Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
for Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and not by separate
Right Certificates, and the right to receive Right Certificates will be
transferable only in connection with the transfer of the underlying Common
Shares (including a transfer to the Company) until the earlier to occur of (i)
the Shares Acquisition Date or (ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by action of the Board) after the
date of the commencement by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) of, or of the first
public announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) to
commence (which intention to commence remains in effect for five (5) Business
Days after such announcement), a tender or exchange offer the consummation of
which would result in any Person becoming an Acquiring Person (including, in the
case of both clauses (i) and (ii) of this Section 3(a), any such date which is
after the date of this Agreement and prior to the issuance of the Rights), the
earlier of such dates being herein referred to as the "Distribution Date";
provided, however, that if the tender offer is terminated prior to the
occurrence of a Distribution Date, then no Distribution Date shall occur as a
result of such tender offer. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign and
send, or cause to be sent, by first-class, insured, postage prepaid mail, to
each record holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, substantially in the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right for each Common Share so held. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b)....Following the Record Date, the Company sent a copy of a
Summary of Rights (the "Summary of Rights"), by first-class, postage prepaid
mail, to each record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company.
Upon the execution and delivery of this Agreement (as amended as of December 13,
1996), or as soon as practicable thereafter, the Company shall file with the
Securities and Exchange Commission the full text of this Agreement and a revised
summary thereof, which revised summary shall be in substantially the form of
Exhibit C hereto (the "Revised Summary of Rights"). With respect to certificates
for Common Shares outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates registered in the names
of the holders thereof together with a copy of the Summary of Rights attached
thereto (which Summary of Rights shall be deemed amended and restated from and
after the date hereof by the Revised Summary of Rights). Until the Distribution
Date (or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto
(which Summary of Rights shall be deemed amended and restated from and after the
date hereof by the Revised Summary of Rights), shall also constitute the
transfer of the Rights associated with such Common Shares. As a result of the
execution of this Agreement on December 13, 1996, each Common Stock outstanding
as of the Close of Business on December 13, 1996 shall, subject to the terms and
conditions of this Agreement, also represent one Right, each of which Rights
shall be deemed amended in its entirety by reason of this Agreement and shall,
subject to the terms and conditions of this Agreement, represent the right to
purchase one one-thousandth of a share of Preferred Stock.
(c)....Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this Section 3(c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
be deemed also to be certificates for Rights and from and after the date hereof
shall bear a legend substantially in the following form:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between
Pioneer Hi-Bred International, Inc. and the First National Bank
of Boston (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the principal executive offices of Pioneer Hi-Bred
International, Inc. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. Pioneer Hi-Bred International, Inc. will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor
from such holder. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and
certain related persons, whether currently held by or on
behalf of such Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares which are
no longer outstanding.
SECTION 4. Form of Right Certificate. (a) The Right
Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11 and 23 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a Preferred Share as shall be set forth therein at the price
per one one-thousandth of a Preferred Share set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b)....Any Right Certificate issued pursuant to Section 3(a) or
22 hereof that represents Rights which are null and void pursuant to Section
7(e) hereof and any Right Certificate issued pursuant to Section 6 or 11 hereof
upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent feasible)
the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are
defined in the Amended and Restated Rights Agreement).
Accordingly, this Right Certificate and the Rights represented
hereby are null and void.
Provisions of Section 7(e) hereof shall be operative whether or not the
foregoing legend is contained on any such Right Certificate.
SECTION 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates
may nevertheless be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated as the appropriate place for
surrender of such Right Certificate for transfer, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
certificate number and the date of each of the Right Certificates.
SECTION 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; M 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 Close of Business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split-up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
one one-thousandths of a Preferred Share (or, following a Triggering Event,
other securities, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in the case
of a transfer) to purchase. Any registered holder desiring to transfer,
split-up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split-up,
combined or exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to the provisions of Sections 4(b),
7(e) and 14 hereof, countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split-up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price for the total
number of one one-thousandths of a Preferred Share (or other securities, as the
case may be) as to which such surrendered Rights are exercised, at or prior to
the earliest of (i) the Close of Business on December 13, 2006 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), (iii) the time at which the Rights
are exchanged as provided in Section 24 hereof, or (iv) the consummation of a
transaction contemplated by Section 13(d) hereof.
(b)....From and after the date hereof, the Purchase Price for
each one-thousandth of a Preferred Share pursuant to the exercise of a Right
shall be $250.00, subject to adjustment from time to time as provided in the
third sentence of this Section 7(b) and in Sections 11 and 13(a) hereof. The
Purchase Price shall be payable in accordance with Section 7(c) below. Anything
in this Agreement to the contrary notwithstanding, in the event that at any time
after the date hereof and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Shares payable in Common Shares or
(ii) effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case, each
Common Share outstanding following such subdivision, combination or
consolidation shall continue to have one Right (subject to adjustment as
provided herein) associated therewith and the Purchase Price following any such
event shall be proportionately adjusted to equal the result obtained by
multiplying the Purchase Price immediately prior to such event by a fraction the
numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of Common Shares outstanding immediately following the
occurrence of such event. The adjustment provided for in the preceding sentence
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.
(c)....Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the Purchase Price for the Preferred
Shares (or other securities, as the case may be) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 6 hereof by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from the depositary agent (if
the Company, in its sole discretion, shall have elected to deposit the Preferred
Shares issuable upon exercise of the Rights hereunder into a depositary)
depositary receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the depositary
agent to comply with such requests, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt thereof, deliver such cash to or upon the order of the registered holder
of such Right Certificate. In the event that the Company is obligated to issue
other securities (including Common Shares) of the Company pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that such
other securities are available for distribution by the Rights Agent, if and when
appropriate.
In addition, in the case of an exercise of the Rights by a holder
pursuant to Section 11(a)(ii) hereof, the Rights Agent shall return such Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by such Right
Certificate no longer include the rights provided by Section 11(a)(ii) hereof
and if less than all the Rights represented by such Right Certificate were so
exercised, the Rights Agent shall indicate on the Right Certificate the number
of Rights represented thereby which continue to include the rights provided by
Section 11(a)(ii) hereof.
(d)....In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof, or the Rights Agent shall place an appropriate notation on
the Right Certificate with respect to those Rights exercised.
(e)....Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate thereof, (ii) a transferee of an Acquiring Person (or of any Affiliate
or Associate thereof) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any Affiliate
or Associate thereof) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has a continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(f)....Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. Cancellation and Destruction of Right Cerificates.
All Right Certificates surrendered for the purpose of exercise (other than a
partial exercise), transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, 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 Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right Certificates
to the Company, or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. Reservation and Availability of Capital Stock.
The Company covenants and agrees that at all time prior to the occurrence of a
Section 11(a)(ii) Event it will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares, or any authorized and issued
Preferred Shares held in its treasury, the number of Preferred Shares that will
be sufficient to permit the exercise in full of all outstanding Rights and,
after the occurrence of a Section 11(a)(ii) Event, shall, to the extent
reasonably practicable, so reserve and keep available a sufficient number of
Common Shares (and/or other securities) which may be required to permit the
exercise in full of the Rights pursuant to this Agreement.
So long as the Preferred Shares (and, after the occurrence of a
Section 11(a)(ii) Event, Common Shares, or any other securities, as the case may
be) issuable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (or Common Shares
and/or other securities, as the case may be) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares or other
securities (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares or securities.
The Company further covenants and agrees that it will pay when
due and payable any and all U.S. federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary receipts for the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
in a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or to deliver any
certificates or depositary receipts for Preferred Shares (or Common Shares
and/or other securities, as the case may be) upon the exercise of any Rights,
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
The Company shall use its best efforts to (i) file, as soon as
practicable following the Shares Acquisition Date (or, if required by law, at
such earlier time following the Distribution Date as so required), a
registration statement under the Act with respect to the securities purchasable
upon exercise of Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act and the rules and regulations
thereunder) until the date of the expiration of the rights provided by Section
11(a)(ii) hereof. The Company will also take such action as may be appropriate
under the blue sky laws of the various states.
SECTION 10. Preferred Shares Record Date. Each Person in whose
name any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that, if the date of such surrender and payment is a date upon which
the Preferred Shares (or Common Shares and/or other securities, as the case may
be) transfer books of the Company are closed, such person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares (or Common
Shares and/or other securities, as the case may be) transfer books of the
Company are open.
SECTION 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable
in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such date and at a
time when the Preferred Shares transfer books 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 or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person (a "Section
11(a)(ii) Event"), then proper provision shall be made so that each
holder of a Right (except as provided below and in Section 7(e) hereof)
shall, for a period of sixty (60) days after the later of (i) the
occurrence of any such event or (ii) the effective date of an
appropriate registration statement under the Act pursuant to Section 9
hereof, have a right to receive, upon exercise of a Right at a price
equal to the then current Purchase Price, in accordance with the terms
of this Agreement, such number of Common Shares (or, in the discretion
of the Board, one one-thousandths of a Preferred Share) as shall equal
the result obtained by (A) multiplying the then current Purchase Price
by the then number of one one-thousandths of a Preferred Share for which
a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event and (B) dividing that product by 50% of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of such first
occurrence (such number of shares being referred to as the "Adjustment
Shares"); provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii).
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued (and unreserved) Common
Shares to permit the exercise in full of the Rights in accordance with
the foregoing Section 11(a)(ii) and the Rights become so exercisable
(and the Board has determined to make the Rights exercisable into
fractions of a Preferred Share), notwithstanding any other provision of
this Agreement, to the extent necessary and permitted by applicable law,
each Right shall thereafter represent the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, (A) a number of (or fractions of) Common
Shares (up to the maximum number of Common Shares which may permissibly
be issued) and (B) a number of one one-thousandths of a Preferred Share
or a number of (or fractions of) other equity securities of the Company
(or, in the discretion of the Board, debt) which the Board has
determined to have the same aggregate current market value (determined
pursuant to Sections 11(d)(i) and 11(d)(ii) hereof, to the extent
applicable) as one Common Share (such number of (or fractions of)
Preferred Shares (or other equity securities or debt of the Company)
being referred to as a "capital stock equivalent"), equal in the
aggregate to the number of Adjustment Shares; provided, however, if
sufficient Common Shares and/or capital stock equivalents are
unavailable, then the Company shall, to the extent permitted by
applicable law, take all such action as may be necessary to authorize
additional Common Shares or capital stock equivalents for issuance upon
exercise of the Rights, including the calling of a meeting of
stockholders; and provided, further, that if the Company is unable to
cause sufficient Common Shares and/or capital stock equivalents to be
available for issuance upon exercise in full of the Rights, then each
Right shall thereafter represent the right to receive the Adjusted
Number of Shares upon exercise at the Adjusted Purchase Price (as such
terms are hereinafter defined). As used herein, the term "Adjusted
Number of Shares" shall be equal to that number of (or fractions of)
Common Shares (and/or capital stock equivalents) equal to the product of
(A) the number of Adjustment Shares and (B) a fraction, the numerator of
which is the number of Common Shares (and/or capital stock equivalents)
available for issuance upon exercise of the Rights and the denominator
of which is the aggregate number of Adjustment Shares otherwise issuable
upon exercise in full of all Rights (assuming there were a sufficient
number of Common Shares available) (such fraction being referred to as
the "Proration Factor"). The "Adjusted Purchase Price" shall mean the
product of the Purchase Price and the Proration Factor. The Board may,
but shall not be required to, establish procedures to allocate the right
to receive Common Shares and capital stock equivalents upon exercise of
the Rights among holders of Rights.
(b) In case the Company shall fix a record date for the issuance
of rights (other than the Rights), options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within forty-five (45)
calendar days after such record date) to subscribe for or purchase Preferred
Shares (or shares having the same rights and privileges as the Preferred Shares
("equivalent preferred shares") or securities convertible into Preferred Shares
or equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
then current per share market price of the Preferred Shares (as determined
pursuant to Section 11(d) hereof) on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or equivalent preferred shares
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current per
share market price, and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
the exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price (as determined pursuant to
Section 11(d) hereof) of the Preferred Shares on such record date, less the fair
market value (as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the
thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in the
event that the current per share market price of the Security is
determined during a period following the announcement by the issuer of
such Security of (A) a dividend or distribution on such Security payable
in shares of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of such
Security, and prior to the expiration of thirty (30) Trading Days after
the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be
appropriately adjusted to reflect the current per share market price
equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the 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
the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if on any such
date the Security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker, selected by the Board, making a market in the Security. If on any
such date no such market maker is making a market in the Security, the
fair value of the Security on such date as determined in good faith by
the Board shall be used. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of business
or, if the Security is not listed or admitted to trading on any national
securities exchange, a Business Day. Subject to Section 11(d)(ii)
hereof, if any Security is not publicly held or so listed or traded,
"current per share market price" of such Security shall mean the fair
market value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in the foregoing
Section 11(d)(i). If the Preferred Shares are not publicly traded, the
current per share market price of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the
Common Shares as determined pursuant to the foregoing Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by one
thousand (1,000). If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, "current per share market
price" shall mean the fair value per share as determined in good faith
by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent.
(e) Notwithstanding anything herein to the contrary, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-thousandth of a Preferred Share or
one hundred-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment or
(ii) the Final Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in this Section 11, and the provisions
of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the Purchase Price, as adjusted, the number of one-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and 11(c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the Purchase Price, as adjusted, that number
of one one-thousandths of a Preferred Share (calculated to the nearest one
hundred-thousandth of a Preferred Share) obtained by (i) multiplying (A) the
number of Preferred Shares covered by a Right immediately prior to this
adjustment of the Purchase Price by (B) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-thousandths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number of
one one-thousandths of a Preferred Share, Common Shares or other securities
issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue such number of fully paid and
nonassessable one one-thousandths of a Preferred Share, Common Shares or other
securities at such Purchase Price as adjusted.
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-thousandths of a Preferred Share, Common Shares or other
securities of the Company, if any, issuable upon such exercise over and above
the number of one one-thousandths of a Preferred Share, Common Shares or other
securities of the Company, if any, issuable upon exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Section 11 to the contrary,
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 in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, (iv)
stock dividends, or (v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which does not violate Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which does not violate Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
does not violate Section 11(o) hereof), if (A) at the time of or immediately
after such consolidation, merger, sale or transfer there are any charter or
by-law provisions or any rights, warrants or other instruments or securities
outstanding or agreements in effect or other actions taken, which would
materially diminish or otherwise eliminate the benefits intended to be afforded
by the Rights or (B) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the stockholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of Section 13(a) hereof
shall have received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or 27 hereof, take (or
permit any Subsidiary to take) any action the purpose of which is to, or if at
the time such action is taken it is reasonably foreseeable that the effect of
such action is to, materially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) The exercise of Rights under Section 11(a)(ii) hereof shall
only result in the reduction of rights under Section 11(a)(ii) hereof to the
extent so exercised and shall not otherwise affect the rights represented by the
Rights under this Agreement, including the rights represented by Section 13
hereof.
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares and the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
26 hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of such adjustment unless and until it shall have received such
certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. (a) In the event that, on or following the Shares Acquisition
Date, directly or indirectly, (i) the Company shall consolidate with, or merge
with and into, any Interested Stockholder or, if in such merger or consolidation
all holders of Common Shares are not treated alike, any other Person, (ii) the
Company shall consolidate with, or merge with, any Interested Stockholder or, if
in such merger or consolidation all holders of Common Shares are not treated
alike, any other Person, and the Company shall be the continuing or surviving
corporation of such consolidation or merger (other than, in a case of any
transaction described in clause (i) or (ii) above of this Section 13(a), a
merger or consolidation which would result in all of the securities generally
entitled to vote in the election of directors ("voting securities") of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the surviving
entity) all of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and the holders (and
relative percentage holdings of each such holder) of such securities not having
changed as a result of such merger or consolidation), or (iii) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Interested
Stockholder or Interested Stockholders or, if in such transaction all holders of
Common Shares are not treated alike, any other Person, (other than the Company
or any Subsidiary of the Company in one or more transactions each of which does
not violate Section 11(o) hereof), then, and in each such case (except as
provided in Section 13(d) hereof), proper provision shall be made so that (A)
each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of freely tradable Common
Shares of the Principal Party (as hereinafter defined), not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall
equal the result obtained by (1) multiplying the then current Purchase Price by
the number of one one-thousandths of a Preferred Share for which a Right is then
exercisable (without taking into account any adjustment previously made pursuant
to Section 11(a)(ii) hereof) and dividing that product by (2) 50% of the then
current per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such Section 13 Event; (B) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; and (D)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise of
the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (i)
or (ii) of the first sentence of Section 13(a) hereof, the Person that
is the issuer of any securities into which Common Shares of the Company
are converted in such merger or consolidation, and if no securities are
so issued, the Person that is the other party to such merger or
consolidation (including, if applicable, the Company if it is the
surviving corporation); and
(ii) in the case of any transaction described in clause
(iii) of the first sentence of Section 13(a) hereof, the Person that is
the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any of the foregoing cases, (1) if the Common Shares
of such Person are not at such time, and have not been continuously over the
preceding twelve (12) month period, registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary of another Person the
Common Shares of which are and have been so registered, "Principal Party" shall
refer to such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value; and (3) in case such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2) above
of this Section 13(b) shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a "Subsidiary" of both or
all of such joint venturers, and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of its authorized Common Shares which have not been issued or reserved
for issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in Sections 13(a) and 13(b) hereof and further
providing that, as soon as practicable after the date of any consolidation,
merger, sale or transfer mentioned in Section 13(a) hereof, the Principal Party
at its own expense shall:
(i) prepare and file a registration statement under the
Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and use its best efforts
to cause such registration statement to (A) become effective as soon as
practicable after such filing, and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under
the blue sky laws of such jurisdictions as may be necessary or
appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. The rights
under this Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11(a)(ii) hereof and shall survive any exercise
thereof.
(d) Notwithstanding anything in this Agreement to the contrary,
the provisions of this Section 13 shall not be applicable to a transaction
described in clause (i) or (ii) of Section 13(a) hereof if (A) such transaction
is consummated with a Person or Persons who acquired Common Shares pursuant to a
Permitted Offer (or a wholly owned Subsidiary of any such Person or Persons),
(B) the price per Common Share offered in such transaction is not less than the
price per Common Share paid to all holders of Common Shares whose shares were
purchased pursuant to such Permitted Offer, and (C) the form of consideration
offered in such transaction is the same as the form of consideration paid
pursuant to such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
SECTION 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker, selected by the Board, making a market in the Rights. If on any
such date no such market maker is making a market in the Rights, the fair value
of the Rights on such date as determined in good faith by the Board shall be
used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are one one-thousandths or integral
multiples of one one-thousandth of a Preferred Share) upon exercise of the
Rights or to distribute certificates which evidence fractional Preferred Shares
(other than fractions which are one one-thousandths or integral multiples of one
one-thousandth of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-thousandth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not one
one-thousandths or integral multiples of one one-thousandth of a Preferred
Share, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For the
purposes of this Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 hereof giving rise to the right to receive Common
Shares, capital stock equivalents (other than Preferred Shares) or other
securities upon the exercise of a Right, the Company shall not be required to
issue fractions of shares or units of such Common Shares, capital stock
equivalents or other securities upon exercise of the Rights or to distribute
certificates which evidence fractions of such Common Shares, capital stock
equivalents or other securities. In lieu of fractional shares or units of such
Common Shares, capital stock equivalents or other securities, the Company may
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of a share or unit of such Common Shares, capital stock
equivalents or other securities. For purposes of this Section 14(c), the current
market value shall be determined in the manner set forth in Section 11(d) hereof
for the Trading Day immediately prior to the date of such exercise and, if such
capital stock equivalent is not traded, each such capital stock equivalent shall
have the value of one one-thousandth of a Preferred Share.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
share upon exercise of a Right (except as provided above).
SECTION 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate form fully executed;
(c) subject to Sections 6 and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate
or the associated Common Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or a beneficial interest in a Right or other Person as a result of
its inability to perform any of its obligations under this Agreement by reason
of any preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
SECTION 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or other distributions, or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
SECTION 18. Concerning the Rights Agent. The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged by the proper Person or Persons.
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the stock
transfer or all or substantially all of the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Right Certificates so countersigned, and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent. In all such cases such
Right Certificates shall have the full force provided in the Right 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 Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned, and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name. In all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of the current per share market price of any Security) be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for, or by reason of,
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates or be required to verify the same (except its
countersignature thereof). All such statements and recitals are, and shall be
deemed to have been made, by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of the certificate described in Section 12
hereof); nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any Preferred Shares or
Common Shares or other securities to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares or Common Shares or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable; nor shall it be under any duty to make any independent
investigation or determination of the identity of any Acquiring Person or any
Affiliate or Associate thereof, but shall be entitled to rely, in the absence of
instructions identifying any such Person, on representations made by holders of
Right Certificates.
(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
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Treasurer or the Secretary of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company, or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company, or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
hereunder 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 Right Certificates surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has not been
completed, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the Company.
SECTION 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company and to
each transfer agent of the Preferred Shares or Common Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Preferred
Shares or Common Shares by registered or certified mail, and to holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or of the State of Iowa, New York or the Commonwealth of
Massachusetts (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 Iowa, New York or the Commonwealth of Massachusetts), in good standing, which
is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed, but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Preferred Shares or Common Shares and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.
In addition, in connection with the issuance or sale of Common
Shares following the Distribution Date and prior to the earliest of the
Redemption Date, the Final Expiration Date and the consummation of a transaction
contemplated by Section 13(d) hereof, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that no Right Certificates shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. Redemption and Termination. (a) (i) The Board may,
at its option, redeem all but not less than all, of the then outstanding Rights
at a redemption price of one-third of a cent per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), at any time prior to the
earlier of (A) the occurrence of a Section 11(a)(ii) Event or (B) the Final
Expiration Date, and the Company may, at its option, pay the Redemption Price
either in Common Shares (based on the "current per share market price", as
defined in Section 11(d) hereof, of the Common Shares at the time of redemption)
or cash; provided, however, that if the Company elects to pay the Redemption
Price in Common Shares, the Company shall not be required to issue any
fractional Common Shares, and the number of Common Shares issuable to each
holder of Rights shall be rounded down to the next whole share.
(ii) In addition, the Board may, at its option, at any time
following a Shares Acquisition Date but prior to any Section 13 Event redeem
all, but not less than all, of the then outstanding Rights at the Redemption
Price (x) in connection with any merger, consolidation or sale or other transfer
(in one transaction or in a series of related transactions) of assets or earning
power aggregating 50% or more of the earning power of the Corporation and its
subsidiaries (taken as a whole) (A) in which all holders of Common Shares are
treated alike and (B) not involving (other than as a holder of Common Shares
being treated like all other such holders) an Interested Stockholder, or (y)(A)
if and for so long as the Acquiring Person is not thereafter the Beneficial
Owner of 10% or more of the Common Shares, and (B) at the time of redemption no
other Persons are Acquiring Persons.
(b) In the case of a redemption permitted under Section 23(a)(i)
hereof, immediately upon the date for redemption set forth in (or determined in
the manner specified in) a resolution of the Board ordering the redemption of
the Rights, evidence of which shall have been filed with the Rights Agent, and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. In the case of
a redemption permitted only under Section 23(a)(ii) hereof, evidence of which
shall have been filed with the Rights Agent, the right to exercise the Rights
will terminate and represent only the right to receive the Redemption Price upon
the later of ten (10) Business Days following the giving of notice or the
expiration of any period during which the rights under Section 11(a)(ii) hereof
may be exercised. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Within ten (10)
days after such date for redemption set forth in a resolution of the Board
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 and other than in connection
with the purchase of Common Shares prior to the Distribution Date.
(c) In the case of a redemption permitted under Section 23(a)(i)
hereof, the Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the Transfer Agent of
the Common Shares, and upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further action by the Company.
SECTION 24. Exchange. (a) The Board may, at its option, at
any time after the time that any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Sections 7(e)
and 11(a)(ii) hereof) for Common Shares of the Company at an exchange ratio of
one Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction involving either the Common Shares or the
Preferred Shares occurring after the date hereof (such exchange ratio 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 the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, any entity holding Common
Shares for or pursuant to the terms of any such plan or any trustee,
administrator or fiduciary of such a plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to Section 24(a) hereof and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights (which shall not
include Rights that become void pursuant to the provisions of Section 7(e) and
11(a)(ii) hereof) shall be to receive that number of Common Shares equal to the
number of such 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 shall promptly mail a notice
of any such exchange to all of the holders of such 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 will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Sections 7(e) and 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Preferred Shares (or equivalent preferred shares, as
such term is defined in Section 11(b) hereof) for some or all of the Common
Shares exchangeable for Rights, at the initial rate of one-thousandth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) The Board shall not authorize any exchange transaction
referred to in Section 24(a) hereof unless at the time such exchange is
authorized there shall be sufficient Common Shares or Preferred Shares issued
but not outstanding, or authorized but unissued, to permit the exchange of
Rights as contemplated in accordance with this Section 24.
SECTION 25. Notice of Certain Events. (a) In case the Company
shall propose (i) to pay any dividend payable in stock of any class to the
holders of its Preferred Shares or to make any other distribution to the holders
of its Preferred Shares (other than a regularly quarterly cash dividend), (ii)
to offer to the holders of its Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction which does not violate Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each of
which does not violate Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action to the extent feasible and file a
certificate with the Rights Agent to that effect, which shall specify the record
date for the purposes of such stock dividend or distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Preferred Shares, if any
such date is to be fixed. Such notice shall be so given in the case of any
action covered by clause (i) or (ii) above of this Section 25(a) at least twenty
(20) days prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any such other action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Preferred Shares,
whichever shall be the earlier.
(b) In case of a Section 11(a)(ii) Event, then (i) the Company
shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of the occurrence of
such event, which notice shall describe such event and the consequences of such
event to holders of Rights under Section 11(a)(ii) hereof and (ii) all
references in the foregoing Section 25(a) to Preferred Shares shall be deemed
thereafter to refer also, if appropriate, to Common Shares and/or, if
appropriate, other securities of the Company.
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 Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, and addressed (until another address is filed
in writing with the Rights Agent) as follows:
Pioneer Hi-Bred International, Inc.
700 Capital Square
400 Locust Street
Des Moines, Iowa 50309
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, and addressed (until
another address is filed in writing with the Company) as follows:
The First National Bank of Boston
P.O. Box 1865
Boston, Massachusetts 02105
Attention: Shareholders Services Division
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate
or, if prior to the Distribution Date, to the holder of certificates
representing Common Shares, shall be sufficiently given or made if sent by
first-class mail, postage prepaid, and addressed to such holder at the address
of such holder as shown on the registry books of the Company.
SECTION 27. Supplements and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement, including, without
limitation, the modification of the Trigger Amount, without the approval of any
holders of certificates representing Common Shares. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement, without the approval of any holders
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate thereof); provided, however,
that this Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment,
provided that such supplement or amendment does not adversely affect the rights
or obligations of the Rights Agent under Section 18 or 20 of this Agreement.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Shares.
SECTION 28. Determination and Actions by the Board, 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 the Company, or as may be necessary or advisable in the administration
of this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Agreement and whether any proposed amendment adversely
affects the interests of the holders of Right Certificates). For all purposes of
this Agreement, any calculation of the number of Common Shares or other
securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Right Certificates and all other parties, and (y) not subject the Board to
any liability to the holders of the Right Certificates.
SECTION 29. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 30. Benefits of this Agreement. This Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares), and 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 Right Certificates (and, prior to the Distribution Date, the
Common Shares) any legal or equitable right, remedy or claim under this
Agreement.
SECTION 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 32. Governing Law. This Agreement, each Right and
each Right Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Iowa and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
SECTION 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.
<PAGE>
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested, all as of the date and year first above
written.
PIONEER HI-BRED INTERNATIONAL, INC.
By: /s/ Charles S. Johnson
----------------------
Name: Charles S. Johnson
Title: President and Chief
Executive Officer
By: /s/ Jerry Chicoine
-------------------
Name: Jerry Chicoine
Title: Senior Vice President and
Chief Financial Officer
THE FIRST NATIONAL BANK OF BOSTON,
the Rights Agent
By: /s/ Laura Welch
-------------------
Name: Laura Welch
Title: Administrative Manager
<PAGE>
EXHIBIT A
Form of Articles of Amendment
of the
Second Restated and Amended Articles of Incorporation
of
Pioneer Hi-Bred International, Inc.
To the Secretary of State of the State of Iowa:
Pursuant to the provisions of Section 490.1006 of the Iowa Business
Corporation Act, the undersigned corporation hereby amends its Second Restated
and Amended Articles of Incorporation (the "Articles of Incorporation"), and for
that purpose, submits the following statement:
1. The name of the corporation is Pioneer Hi-Bred International,
Inc. (the "Corporation").
2. On December 13, 1996, the Corporation adopted an amendment to
its Articles of Incorporation, the text of which is attached
hereto as Exhibit A.
3. The amendment was duly adopted by the board of directors
without shareholder approval, as shareholder approval is not
required pursuant to Section 490.602 of the Iowa Business
Corporation Act.
Dated:
Pioneer Hi-Bred International, Inc.
By: /s/ Charles S. Johnson
_________________________
Name: Charles S. Johnson
Title: President and Chief
Executive Officer
<PAGE>
DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
OF
PIONEER HI-BRED INTERNATIONAL, INC.
1. Designation and Amount.
(a) There shall be a series of Preferred Stock of the
Corporation created out of the authorized but unissued shares of the capital
stock of the Corporation, which series shall be designated Series A Junior
Participating Preferred Stock (the "Participating Preferred Stock"), to consist
of one hundred and fifty thousand (150,000) shares, without par value.
(b) Subject of paragraph 4(e) of this designation, the
number of shares of said series may at any time or from time to time be
increased or decreased by the Board of Directors notwithstanding that shares of
such series may be outstanding at such time of increase or decrease.
2. Dividend Rate.
(a) The holders of shares of Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of each November, February, May and August in
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $230.00 or (b) 1,000 times the aggregate per share amount of all cash
dividends and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, par
value of One Dollar ($1.00) per share, of the Corporation (the "Common Stock")
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Participating Preferred Stock.
(b) On or after the first issuance of any share or
fractional share of Participating Preferred Stock, no dividend on Common Stock
shall be declared unless concurrently therewith a dividend or distribution is
declared on the Participating Preferred Stock as provided in paragraph (a)
above; and the declaration of any such dividend on the Common Stock shall be
expressly conditioned upon payment or declaration of and provision for a
dividend on the Participating Preferred Stock as above provided. In the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $230.00 per share on the
Participating Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Participating
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Participating
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. The Board of Directors may
fix a record date for the determination of holders of shares of Participating
Preferred Stock entitled to receive payment of a dividend distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
3. Dissolution, Liquidation and Winding Up. In the event of any
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Corporation (hereinafter referred to as a "Liquidation"), the holders of
Participating Preferred Stock shall receive at least $1,000.00 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that the holders
of shares of Participating Preferred Stock shall be entitled to receive at least
an aggregate amount per share equal to 1,000 times the aggregate amount to be
distributed per share to holders of Common Stock (the "Participating Preferred
Liquidation Preference").
4. Voting Rights. The holders of shares of Participating
Preferred Stock shall have the following voting rights:
(a) Each share of Participating Preferred Stock shall
entitle the holder thereof to five thousand (5,000) votes on all matters
submitted to a vote of the stockholders of the Corporation, except that no
holder of Participating Preferred Stock shall be entitled to exercise more than
one thousand (1,000) votes on any such matter in respect of any share of
Participating Preferred Stock if such holder would have been entitled to
exercise no more than one vote on any such matter in respect of any share of
Common Stock under Article IV.B of the Articles of Incorporation, had such
shares of Participating Preferred Stock been shares of Common Stock.
(b) Except as otherwise provided herein, or by law, the
Articles of Incorporation or the By-laws of the Corporation, the holders of
shares of Participating Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(c) If and whenever dividends on the Participating
Preferred Stock shall be in arrears in an amount equal to six quarterly dividend
payments, then and in such event the holders of the Participating Preferred
Stock, voting separately as a class (subject to the provisions of subparagraph
(d) below), shall be entitled at the next annual meeting of the stockholders or
at any special meeting to elect two (2) directors. Each share of Participating
Preferred Stock shall be entitled to one vote, and holders of fractional shares
shall have the right to a fractional vote. Upon election, such directors shall
become additional directors of the Corporation and the authorized number of
directors of the Corporation shall thereupon be automatically increased by such
number of directors. Such right of the holders of Participating Preferred Stock
to elect directors may be exercised until all dividends in default on the
Participating Preferred Stock shall have been paid in full, and dividends for
the current dividend period declared and funds therefor set apart, and when so
paid and set apart, the right of the holders of Participating Preferred Stock to
elect such number of directors shall cease, the term of such directors shall
thereupon terminate, and the authorized number of directors of the Corporation
shall thereupon return to the number of authorized directors otherwise in
effect, but subject always to the same provisions for the vesting of such
special voting rights in the case of any such future dividend default or
defaults. The fact that dividends have been paid and set apart as required by
the preceding sentence shall be evidenced by a certificate executed by the
President and the chief financial officer of the Corporation and delivered to
the Board of Directors. The directors so elected by holders of Participating
Preferred Stock shall serve until the certificate described in the preceding
sentence shall have been delivered to the Board of Directors or until their
respective successors shall be elected or appointed and qualify.
At any time when such special voting rights have been so vested
in the holders of the Participating Preferred Stock, the Secretary of the
Corporation may, and upon the written request of the holders of record of 10% or
more of the number of shares of the Participating Preferred Stock then
outstanding addressed to such Secretary at the principal office of the
Corporation in the State of Iowa, shall, call a special meeting of the holders
of the Participating Preferred Stock for the election of the directors to be
elected by them as hereinabove provided, to be held in the case of such written
request within forty (40) days after delivery of such request, and in either
case to be held at the place and upon the notice provided by law and in the
By-laws of the Corporation for the holding of meetings of stockholders;
provided, however, that the Secretary shall not be required to call such a
special meeting (i) if any such request is received less than ninety (90) days
before the date fixed for the next ensuing annual or special meeting of
stockholders or (ii) if at the time any such request is received, the holders of
Participating Preferred Stock are not entitled to elect such directors by reason
of the occurrence of an event specified in the third sentence of subparagraph
(d) below.
(d) if, at any time when the holders of Participating
Preferred Stock are entitled to elect directors pursuant to the foregoing
provisions of this paragraph 4, the holders of any one or more additional series
of Preferred Stock are entitled to elect directors by reason of any default or
event specified in the Articles of Incorporation, as in effect at the time of
the designation for such series, and if the terms for such other additional
series so permit, the voting rights of the two or more series then entitled to
vote shall be combined (with each series having a number of votes proportional
to the aggregate liquidation preference of its outstanding shares). In such
case, the holders of Participating Preferred Stock and of all such other series
then entitled so to vote, voting as a class, shall elect such directors. If the
holders of any such other series have elected such directors prior to the
happening of the default or event permitting the holders of Participating
Preferred Stock to elect directors, or prior to a written request for the
holding of a special meeting being received by the Secretary of the Corporation
from the holders of not less than 10% of the then outstanding shares of
Participating Preferred Stock, then such directors so previously elected will be
deemed to have been elected by and on behalf of the holders of Participating
Preferred Stock as well as such other series, without prejudice to the right of
the holders of Participating Preferred Stock to vote for directors if such
previously elected directors shall resign, cease to serve or fail to stand for
reelection while the holders of Participating Preferred Stock are entitled to
vote. If the holders of any such other series are entitled to elect in excess of
two (2) directors, the Participating Preferred Stock shall not participate in
the election of more than two (2) such directors, and those directors whose
terms first expire shall be deemed to be the directors elected by the holders of
Participating Preferred Stock; provided that, if at the expiration of such terms
the holders of Participating Preferred Stock are entitled to vote in the
election of directors pursuant to the provisions of this paragraph 4, then the
Secretary of the Corporation shall call a meeting (which meeting may be the
annual meeting or special meeting of stockholders referred to in subparagraph
(c)) of holders of Participating Preferred Stock for the purpose of electing
replacement directors (in accordance with the provisions of this paragraph 4) to
be held on or prior to the time of expiration of the expiring terms referred to
above.
(e) Except as otherwise set forth herein or required by
law, the Articles of Incorporation or the By-laws of the Corporation, holders of
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for the taking of any
corporate action. No consent of the holders of outstanding shares of
Participating Preferred Stock at any time outstanding shall be required in order
to permit the Board of Directors to: (i) increase the number of authorized
shares of Participating Preferred Stock or to decrease such number to a number
not below the sum of the number of shares of Participating Preferred Stock then
outstanding and the number of shares with respect to which there are outstanding
rights to purchase; or (ii) to issue Preferred Stock which is senior to the
Participating Preferred Stock, junior to the Participating Preferred Stock or on
a parity with the Participating Preferred Stock.
5. Redemption. The shares of Participating Preferred Stock
shall not be redeemable.
6. Conversion Rights. The Participating Preferred Stock is
not convertible into Common Stock or any other security of the Corporation.
<PAGE>
EXHIBIT B
Form of Right Certificate
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER DECEMBER 13, 2006, OR EARLIER IF REDEEMED
BY THE CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
ONE-THIRD OF A CENT PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO
IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON BEHALF
OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL AND
VOID.
Right Certificate
PIONEER HI-BRED INTERNATIONAL, INC.
This certifies that ___________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Amended and Restated Rights Agreement, dated as of December 13, 1996 (the
"Rights Agreement"), between Pioneer Hi-Bred International, Inc., an Iowa
corporation (the "Company"), and The First National Bank of Boston, a national
banking association (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., Boston, Massachusetts time, on December 13,
2006, unless the Rights evidenced hereby shall have been previously redeemed by
the Company, at the principal office or offices of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one
one-thousandth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred Shares"), of
the Company, at a purchase price of $250.00 per one one-thousandth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of ____________, ____ based on the Preferred Shares as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate who becomes a
transferee after the Acquiring Person becomes such, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of any such
Acquiring Person, Associate or Affiliate who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such, such Rights shall become
null and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number of one one-thousandths of a Preferred Share or other securities which may
be purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the principal office or offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares or other securities as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at a redemption
price of one-third of a cent per Right (subject to adjustment as provided in the
Rights Agreement) payable in Common Shares or cash.
The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right as defined in the Rights Agreement.
The Company will not be required to issue fractions of Preferred
Shares (other than fractions which are one one-thousandths or integral multiples
of one one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are one one-thousandths or integral multiples of one
one-thousandth of a Preferred Share). In lieu of fractional Preferred Shares
other than fractions that are multiples of one one-thousandth of a Preferred
Share, the Company will pay to the registered holders of Right Certificates at
the time such Rights are exercised an amount in cash equal to the same fraction
of the current market value of one Preferred Share as defined in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
<PAGE>
WITNESS the signature of the proper officers of the Company and
its corporate seal. Dated as of _________, ______.
[SEAL]
ATTEST: PIONEER HI-BRED INTERNATIONAL, INC.
Attest:
By ________________________________________ By ____________________________
Name: Name:
Title: Title:
Countersigned:
THE FIRST NATIONAL BANK OF BOSTON
By ________________________________________
Authorized Signatory
Name:
Title:
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________________________
hereby sells, assigns and transfers unto _______________________________________
- -----------------------------------------------------------------------
(Please print name and address of transferee)
- ------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _________ Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ____________, _____
---------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank, savings association, credit union or trust
company having an office or correspondent in the United States or other eligible
guarantor institution which is a participant in a signature guarantee medallion
program.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights evidenced by
this Right Certificate are not being sold, assigned or transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) and (2)
after due inquiry and to the best knowledge of the undersigned, the undersigned
did not acquire the Rights evidenced by this Right Certificate from any Person
who is or was an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement).
---------------------------
Signature
- ------------------------------------------------------------------------------
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to
exercise Rights represented by the Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Preferred Shares, Common
Shares or such other securities issuable upon the exercise of such Rights at
this time as follows:
Please Insert
Number of Rights
To Be Exercised
(i) Preferred Shares Exercise _______________
(ii) Section 11(a)(ii) Exercise _______________
(iii) Section 13 Exercise _______________
The undersigned requests that certificates for such Preferred
Shares, Common Shares or other securities be issued in the name of:
Please insert social security
or other identifying number ________________________________________________
- ------------------------------------------------------------------------
(Please print name and address of transferee)
- ------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number ________________________________________________
- ------------------------------------------------------------------------
(Please print name and address of transferee)
- ------------------------------------------------------------------------
<PAGE>
Form of Reverse Side of Right Certificate -- continued.
- --------------------------------------------------------------------------------
Dated: _________, 19__
---------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank, savings association, credit union or trust
company having an office or correspondent in the United States or other eligible
guarantor institution which is a participant in a signature guarantee medallion
program.
<PAGE>
Form of Reverse Side of Right Certificate -- continued.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights evidenced by
this Right Certificate are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement) and (2) after due inquiry and to the
best knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Rights Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
---------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
The signature on the foregoing Forms of Assignment and Election
and certificates must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
<PAGE>
EXHIBIT C
December 13, 1996
REVISED SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT,
RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT)
AND CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH
PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
On April 6, 1989, the Board of Directors of Pioneer Hi-Bred
International Inc., an Iowa corporation (the "Company"), declared a dividend of
one common share purchase right (a "Right") for each outstanding share of Common
Stock, par value of One Dollar ($.1.00) per share (the "Common Shares"), of the
Company. The dividend was paid to the stockholders of record as of 5:00 P.M.,
Boston, Massachusetts time, on April 6, 1989 (the "Record Date"), and either was
paid or is payable with respect to Common Shares issued thereafter until the
Distribution Date (as hereinafter defined) and, in certain circumstances, is
payable with respect to Common Shares issued after the Distribution Date. Since
April 6, 1989, the terms of the Rights have been amended on December 13, 1994
and on December 13, 1996 to, among other things, modify the Rights so that each
Right represents the Right to purchase one one-thousandth of a Preferred Share
(as hereinafter defined).
Except as set forth below, each Right, when it becomes
exercisable, entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series A Participating Preferred Stock, without par
value (the "Preferred Shares"), at a price of $250.00 per one one-thousandth of
a Preferred Share (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in an Amended and Restated Rights
Agreement, dated as of December 13, 1996 (the "Rights Agreement"), between the
Company and The First National Bank of Boston (the "Rights Agent").
The Rights are attached to all certificates representing
outstanding Common Shares, and no separate Right Certificates (as hereinafter
defined) have been distributed. The Rights will separate from the Common Shares
on the earliest to occur of (i) the first date of public announcement that a
person or "group" (other than a Grandfathered Person, as hereinafter defined)
has acquired beneficial ownership of the Trigger Amount (as hereinafter
defined)or more of the outstanding Common Shares (except pursuant to a Permitted
Offer, as hereinafter defined); or (ii) ten (10) business days (or such later
date as the Board of Directors of the Company may determine) following the
commencement of, or announcement of an intention to commence, a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined) (the earliest of such
dates being called the "Distribution Date"). A person or group whose acquisition
of Common Shares causes a Distribution Date pursuant to clause (i) above is an
"Acquiring Person". The first date of public announcement that a person or group
has become an Acquiring Person is the "Shares Acquisition Date". The "Trigger
Amount" means the lesser of: (i) 15% of the outstanding Common Shares, or (ii)
10% of outstanding Common Shares, provided that such 10% represents one-fourth
(1/4) of the combined voting power of the Common Shares then outstanding for the
election of directors generally. "Grandfathered Persons" include any descendant
of Henry A. Wallace (the deceased founder of the Corporation), or any spouse,
widow or widower of any such descendant, and certain affiliated entities of any
of the foregoing; provided, however, that a Grandfathered Person shall cease to
be a Grandfathered Person if any of the following occur at any time: (A) all or
any part of such Grandfathered Person's interest in the Common Shares becomes
reportable on a Schedule 13D under the Exchange Act (or any comparable or
successor report) as part of a "group" (as such term is defined or used under
Rule 13d-5(b) of the General Rules and Regulations under the Exchange Act) which
Beneficially Owns, directly or indirectly, the Trigger Amount or more of the
then outstanding Common Shares and includes one or more Persons (including any
Affiliate or Associate thereof) who (x) are not Grandfathered Persons and (y)
individually or in the aggregate beneficially own, directly or indirectly, in
excess of 1% of the then outstanding Common Shares; (B) such Grandfathered
Person, individually or together with one or more other Persons, acting together
or as part of a "group", Beneficially Owns (together with all Common Shares then
Beneficially Owned) 20% or more of the outstanding Common Shares; (C) such
Grandfathered Person (together with any spouse and any children under the age of
18 years of that Grandfathered Person) individually Beneficially Owns the
Trigger Amount or more (but excluding any Common Shares that such Grandfathered
Person may be deemed to be Beneficially Owned by reason of being part of a
"group"); provided, however, that no Grandfathered Person shall lose its, his or
her status as a Grandfathered Person pursuant to this clause (C) if a bona fide
gift or bona fide inheritance (including being named as executor or to another
similar position) causes the Beneficial Ownership of Common Shares by such
Grandfathered Person (together with any spouse and any children under the age of
18 years of that Grandfathered Person) to equal or exceed the Trigger Amount (it
being understood, however, that the foregoing proviso shall not apply if such
Granfathered Person (together with any spouse and any children under the age of
18 years of that Grandfathered Person) increases its, his or her Beneficial
Ownership after equalling or exceeding the Trigger Amount except by bona fide
gift or bona fide inheritance (including being named as executor or to another
similar position)); or (D) such Grandfathered Person (together with any spouse
and children under the age of 18 years of that Grandfathered Person)
individually Beneficially Owns 15% or more of the outstanding Common Shares
(excluding any Common Shares that such Grandfathered Person may be deemed to be
Beneficially Owned by reason of being part of a group).
The Rights Agreement provides that until the Distribution Date
the Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares have contained and will continue to contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date (and to each initial record
holder of certain Common Shares issued after the Distribution Date), and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M., Boston, Massachusetts time, on December 13, 2006,
unless earlier redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a Permitted Offer as hereinafter defined), each holder of a Right
will have (subject to the terms of the Rights Agreement) the right (the "Flip-In
Right") to receive upon exercise the number of Common Shares, or, in the
discretion of the Board of Directors of the Company, the number of one
one-thousandths of a Preferred Share (or, in certain circumstances, other
securities of the Company) having a value (immediately prior to such triggering
event) equal to two times the Purchase Price. Notwithstanding the foregoing,
following the occurrence of the event described above, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or associate thereof
will be null and void. A "Permitted Offer" is a tender or exchange offer for all
outstanding Common Shares which is at a price and on terms determined, prior to
the purchase of shares under such tender or exchange offer, by a majority of
Disinterested Directors (as hereinafter defined) to be adequate (taking into
account all factors that such Disinterested Directors deem relevant) and
otherwise in the best interests of the Company and its stockholders (other than
the person or any affiliate or associate thereof on whose basis the offer is
being made) taking into account all factors that such Disinterested Directors
may deem relevant. "Disinterested Directors" are directors of the Company who
are not officers of the Company and who are not Acquiring Persons or affiliates
or associates thereof, or representatives of any of them, or any person who was
directly or indirectly proposed or nominated as a director of the Company by an
Interested Stockholder (as hereinafter defined). "Interested Stockholder" is any
stockholder of the Company who is also an Acquiring Person or its Affiliates or
Associates.
In the event that, at any time following the Shares Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Company's assets or earning power is sold or transferred, in either case with or
to an Acquiring Person or any affiliate or associate thereof, or any other
person in which such Acquiring Person, affiliate or associate has an interest,
or any person acting on behalf of or in concert with such Acquiring Person,
affiliate or associate, or, if in such transaction all holders of Common Shares
are not treated alike, any other person, then each holder of a Right (except
Rights which previously have been voided as set forth above) shall thereafter
have the right (the "Flip-Over Right") to receive, upon exercise, common shares
of the acquiring company having a value equal to two times the Purchase Price.
The Purchase Price payable, and the number of one-thousandths of
a Preferred Share or other securities issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of indebtedness
or assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
The Purchase Price is also subject to adjustment in the event of
a stock split of the Common Shares, or a stock dividend on the Common Shares
payable in Common Shares, or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional one-thousandths of a Preferred Share will be
issued, and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $230.00 per share but, if greater, will be
entitled to an aggregate dividend per share of 1,000 times the dividend declared
per Common Share. In the event of liquidation, the holders of the Preferred
Shares will be entitled to a minimum preferential liquidation payment of
$1,000.00 but will be entitled to an aggregate payment per share of 1,000 times
the aggregate payment made per Common Share. Each Preferred Share will have five
thousand votes (or one thousand votes if the holder thereof would have been
entitled to no more than one vote per share under Article IV.B of the Amended
and Restated Articles of Incorporation of the Company had such Preferred Share
been a Common Share), voting together with the Common Shares. These rights are
protected by customary antidilution provisions. In the event that the amount of
accrued and unpaid dividends on the Preferred Shares is equivalent to at least
six full quarterly dividends, the holders of the Preferred Shares shall have the
right, voting as a class, to elect two directors in addition to the directors
elected by the holders of the Common Shares until all dividends in default on
the Preferred Shares have been paid in full and dividends for the current
dividend period declared and funds therefor set apart.
At any time prior to the earlier to occur of (i) a person
becoming an Acquiring Person or (ii) the expiration of the Rights, the Company
may redeem the Rights in whole, but not in part, at a price of one-third of a
cent per Right (the "Redemption Price"), which redemption shall be effective
upon the action of the Board of Directors of the Company. Additionally, the
Company may redeem the then outstanding Rights in whole, but not in part, at the
Redemption Price after the triggering of the Flip-In Right and before the
expiration of any period during which the Flip-In Right may be exercised (x) in
connection with a merger or other business combination transaction or series of
transactions involving the Company in which all holders of Common Shares are
treated alike but not involving an Interested Stockholder or (y) if the
Acquiring Person no longer Beneficially Owns 10% or more of the then outstanding
Common Shares and no other Persons are Acquiring Persons. Upon the effective
date of the redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
Until 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. While the distribution of the Rights
will not be taxable to stockholders of the Company, stockholders may, depending
upon the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.
<PAGE>
Dirck Steimel (515) 248-4893
(web site: http://www.pioneer.com)
Pioneer Declares Dividend
DES MOINES, IA -- December 13, 1996 -- Directors of Pioneer Hi-Bred
International, Inc. declared a regular dividend of $.23 per share for the first
quarter of fiscal 1997, ending November 30, 1996. This is the same rate as that
paid for the previous two quarters. The dividend is payable January 8, 1997, to
shareholders of record December 27, 1996.
The Pioneer Board of Directors has also amended its shareholders rights plan.
Among other things, the amendment reduces the acquisition threshold and extends
the shareholders rights plan through 2006.
In addition, the Pioneer Board of Directors announced that Thomas N. Urban, a
planned, is stepping down as Chairman. Charles S. Johnson, President and Chief
Executive Officer, has been elected Chairman. Mr. Urban will remain a member of
the Board of Directors.
