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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
J. BAKER, INC.
______________
(Exact name of registrant as specified in charter)
Massachusetts 04-2866591
_____________ __________
(State or other jurisdiction (IRS employer
of incorporation) identification no.)
555 Turnpike Street, Canton, Massachusetts 02021
________________________________________________
(Address of principal executive offices) (Zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which each class is
to be so registered to be registered
___________________ _______________________
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
_______________________________
(Title of Class)
There are 72 pages in this Registration Statement, including
exhibits.
Page 1 of 72
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Item 1. Description of Registrant's Securities to be Registered.
On December 15, 1994, the Board of Directors of J. Baker, Inc.
(the "Registrant" or the "Company") adopted a Shareholder Rights
Agreement (the "Rights Agreement"). The following description of
the terms of the Rights Agreement does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement which is attached hereto as an exhibit and is
incorporated herein by reference.
Pursuant to the terms of the Rights Agreement, the Board of
Directors declared a dividend distribution of one Preferred Stock
Purchase Right (a "Right") for each outstanding share of common
stock, par value $0.50 per share, of the Company (the "Common
Stock") to stockholders of record as of the close of business on
January 6, 1994 (the "Record Date"). Such Rights are being
registered hereunder. Each Right entitles the registered holder to
purchase from the Company a unit consisting of one ten-thousandth
(1/10,000) of a share (a "Unit") of Series A Junior Participating
Cumulative Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), at a cash exercise price of $70.00 per Unit
(the "Exercise Price"), subject to adjustment.
Initially, the Rights will not be exercisable and will be
attached to all outstanding shares of Common Stock. The Rights
will separate from the Common Stock and will become exercisable
upon the earliest of (i) the close of business on the tenth
business day following the first public announcement that a person
or group of affiliated or associated persons has acquired
beneficial ownership of 15% or more of the outstanding shares of
Common Stock (an "Acquiring Person") (the date of said announcement
being referred to as the "Stock Acquisition Date"), (ii) the close
of business on the tenth business day (or such other business day
as the Company's Board of Directors may determine) following the
commencement of a tender offer or exchange offer that would result
upon its consummation in a person or group becoming the beneficial
owner of 15% or more of the outstanding shares of Common Stock or
(iii) the determination by the Board of Directors that any person
is an "Adverse Person" (the earliest of such dates being herein
referred to as the "Distribution Date").
The Board of Directors may declare a person to be an Adverse
Person after a determination that such person, alone or together
with its affiliates and associates, has become the beneficial owner
of 10% or more of the outstanding shares of Common Stock and a
determination by the Board of Directors, after reasonable inquiry
and investigation, including such consultation, if any, with such
persons as the directors shall deem appropriate, that (a) such
beneficial ownership by such person is intended to cause, is
reasonably likely to cause or will cause the Company to repurchase
the Common Stock beneficially owned by such person or to cause
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pressure on the Company to take action or enter into a transaction
or series of transactions which would provide such person with
short-term financial gain under circumstances where the Board of
Directors determines that the best long-term interests of the
Company and its stockholders, but for the actions and possible
actions of such person, would not be served by taking such action
or entering into such transaction or series of transactions at that
time or (b) such beneficial ownership is causing, or is reasonably
likely to cause, a material adverse impact (including, but not
limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company. However,
the Board of Directors may not declare a person to be an Adverse
Person if, prior to the time that the person acquired 10% or more
of the outstanding shares of Common Stock, such person provided to
the Board of Directors in writing a statement of the person's
purpose and intentions in connection with the proposed acquisition
of Common Stock, together with any other information reasonably
requested of the person by the Board of Directors, and the Board of
Directors, based on such statement and such reasonable inquiry and
investigation, including such consultation, if any, with such
person as the Board of Directors shall deem appropriate, determines
to notify and notifies such person in writing that it will not
declare the person to be an Adverse Person; provided, however, that
the Board of Directors may expressly condition in any manner a
determination not to declare a person an Adverse Person on such
conditions as the Board of Directors may select, including, without
limitation, such person's not acquiring more than a specified
amount of stock and/or on such person's not taking actions
inconsistent with the purposes and intentions disclosed by such
person in the statement provided to the Board of Directors. No
delay or failure by the Board of Directors to declare a Person to
be an Adverse Person shall in any way waive or otherwise affect the
power of the Board of Directors subsequently to declare a person an
Adverse Person. In the event that the Board of Directors should at
any time determine, upon reasonable inquiry and investigation,
including consultation with such persons as the Board of Directors
shall deem appropriate, that such person has not met or complied
with any condition specified by the Board of Directors, the
Board of Directors may at any time thereafter declare the person to
be an Adverse Person.
Until the Distribution Date (or earlier redemption, exchange
or expiration of the Rights), (a) the Rights will be evidenced by
the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (b) new Common Stock
certificates issued after the Record Date will contain a notation
incorporating the Shareholder Rights Agreement by reference, and
(c) the surrender for transfer of any certificates for Common Stock
will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
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The Rights are not exercisable until the Distribution Date and
will expire at the close of business on December 14, 2004, unless
previously redeemed or exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Right
Certificates will be mailed to holders of record of Common Stock as
of the close of business on the Distribution Date and, as of and
after the close of business on the Distribution Date, the separate
Right Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of
Common Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that a Stock Acquisition Date occurs or the Board
of Directors determines that a person is an Adverse Person, proper
provision will be made so that each holder of a Right (other than
an Acquiring Person, an Adverse Person, or affiliates, associates
or certain transferees of such persons, whose Rights shall become
null and void) will thereafter have the right to receive upon
exercise that number of Units of Preferred Stock of the Company
having a market value of two times the exercise price of the Right
(such right being referred to as the "Subscription Right"). In the
event that, at any time following the Stock Acquisition Date, (i)
the Company consolidates with, or merges with and into, any other
person, and the Company is not the continuing or surviving
corporation, (ii) any person consolidates with the Company, or
merges with and into the Company and the Company is the continuing
or surviving corporation of such merger and, in connection with
such merger, all or part of the shares of Common Stock are changed
into or exchanged for stock or other securities of any other person
or cash or any other property, or (iii) 50% or more of the
Company's assets or earning power is sold, mortgaged or otherwise
transferred, each holder of a Right shall thereafter have the right
to receive, upon exercise, common stock of the acquiring company
having a market value equal to two times the exercise price of the
Right (such right being referred to as the "Merger Right"). The
holder of a Right will continue to have the Merger Right whether or
not such holder has exercised the Subscription Right. Rights that
are or were beneficially owned by an Acquiring Person or an Adverse
Person may (under certain circumstances specified in the Rights
Agreement) become null and void.
At any time after a Stock Acquisition Date occurs or the Board
of Directors determines that a person is an Adverse Person, the
Board of Directors may, at its option, exchange all or any part of
the then outstanding and exercisable Rights for shares of Common
Stock or Units of Preferred Stock at an exchange ratio of one share
of Common Stock or one Unit of Preferred Stock per Right.
Notwithstanding the foregoing, the Board of Directors generally
will not be empowered to effect such exchange at any time after any
person becomes the beneficial owner of 50% or more of the Common
Stock of the Company.
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The Exercise Price payable, and the number of Units of
Preferred Stock or other securities or property 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
Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustment in the Exercise Price
will be required until cumulative adjustments amount to at least 1%
of the Exercise Price. The Company is not obligated to issue
fractional Units. If the Company elects not to issue fractional
Units, in lieu thereof an adjustment in cash will be made based on
the fair market value of the Preferred Stock on the last trading
date prior to the date of exercise. Any of the provisions of the
Rights Agreement may be amended by the Board of Directors of the
Company at any time prior to the Distribution Date.
The Rights may be redeemed in whole, but not in part, at a
price of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors) by the
Board of Directors only until the earliest of (i) the date on which
a person is declared to be an Adverse Person, (ii) the close of
business on the tenth business day after the Stock Acquisition
Date, or (iii) the expiration date of the Rights Agreement.
Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and thereafter
the only right of the holders of Rights will be to receive the
redemption price.
The Rights Agreement may be amended by the Board of Directors
in its sole discretion until the Distribution Date. After the
Distribution Date, the Board of Directors may, subject to certain
limitations set forth in the Rights Agreement, amend the Rights
Agreement only to cure any ambiguity, defect or inconsistency, to
shorten or lengthen any time period, or to make changes that do not
adversely affect the interests of Rights holders (excluding the
interests of an Acquiring Person, an Adverse Person or their
associates or affiliates).
Until a Right is exercised, the holder will have no rights as
a stockholder of the Company (beyond those as an existing
stockholder), including the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the
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Rights become exercisable for Units, other securities of the
Company, other consideration or for common stock of an acquiring
company.
The certification of vote of directors establishing the
Preferred Stock and the form of Right Certificate are attached as
Exhibits A and B, respectively, to the Rights Agreement (which is
included as Exhibit 1 to this Form 8-A). The foregoing description
of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement which is
incorporated herein by reference.
Item 2 - Exhibits Page
_________________ ____
Exhibit 1 Shareholder Rights Agreement, 8
dated as of December 15, 1994,
between J. Baker, Inc. and
Fleet National Bank, as Rights Agent
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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.
J. BAKER, INC.
Dated: December 20, 1994 By:/s/ Jerry M. Socol
__________________
Jerry M. Socol
President and Chief
Executive Officer
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Exhibit 1
8
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_________________________________________________________________
J. BAKER, INC.
and
FLEET NATIONAL BANK,
as Rights Agent
Shareholder Rights Agreement
Dated as of December 15, 1994
_________________________________________________________________
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TABLE OF CONTENTS
Section Page
1. Certain Definitions . . . . . . . . . . . . . . . . . . . 13
2. Appointment of Rights Agent . . . . . . . . . . . . . . . 17
3. Issue of Right Certificates . . . . . . . . . . . . . . . 18
4. Form of Right Certificates. . . . . . . . . . . . . . . . 20
5. Countersignature and Registration . . . . . . . . . . . . 21
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates. . . . . . . . . . . . . . . . . . . 22
7. Exercise of Rights; Exercise Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . 23
8. Cancellation and Destruction of Right Certificates . . . 25
9. Reservation and Availability of Preferred Stock . . . . 26
10. Preferred Stock Record Date. . . . . . . . . . . . . . 27
11. Adjustment of Exercise Price, Number and Kind of
Shares or Number of Rights. . . . . . . . . . . . . . 27
12. Certificate of Adjusted Exercise Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . 38
13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power . . . . . . . . . . . . . . . . . . . 38
14. Fractional Rights and Fractional Shares. . . . . . . . . 41
15. Rights of Action . . . . . . . . . . . . . . . . . . . . 42
16. Agreement of Right Holders . . . . . . . . . . . . . . . 42
17. Right Certificate Holder Not Deemed a Shareholder. . . . 43
18. Concerning the Rights Agent. . . . . . . . . . . . . . . 44
19. Merger or Consolidation or Change of Name of Rights
Agent. . . . . . . . . . . . . . . . . . . . . . . . . 44
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . 45
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21. Change of Rights Agent . . . . . . . . . . . . . . . . . 48
22. Issuance of New Right Certificates . . . . . . . . . . . 49
23. Redemption and Termination . . . . . . . . . . . . . . . 49
24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . 50
25. Notice of Certain Events . . . . . . . . . . . . . . . . 51
26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 53
27. Supplements and Amendments . . . . . . . . . . . . . . . 53
28. Successors . . . . . . . . . . . . . . . . . . . . . . . 54
29. Determinations and Actions by the Board of Directors . . 54
30. Benefits of this Agreement . . . . . . . . . . . . . . . 54
31. Severability . . . . . . . . . . . . . . . . . . . . . . 55
32. Governing Law. . . . . . . . . . . . . . . . . . . . . . 55
33. Counterparts . . . . . . . . . . . . . . . . . . . . . . 55
34. Descriptive Headings . . . . . . . . . . . . . . . . . . 55
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Exhibit A -- Certificate of Designation of
Series A Junior Participating
Cumulative Preferred Stock
Exhibit B -- Form of Right Certificate
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SHAREHOLDER RIGHTS AGREEMENT
____________________________
Agreement, dated as of December 15, 1994, between J. Baker,
Inc., a Massachusetts corporation (the "Company"), and Fleet
National Bank (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company desires to
provide shareholders of the Company with the opportunity to benefit
from the long-term prospects and value of the Company and to ensure
that shareholders of the Company receive fair and equal treatment
in the event of any proposed takeover of the Company; and
WHEREAS, on December 15, 1994, the Board of Directors of the
Company authorized and declared a dividend distribution of one
Right (as such term is hereinafter defined) for each outstanding
share of Common Stock, par value $0.50 per share, of the Company
(the "Common Stock") outstanding as of the close of business on
January 6, 1995 (the "Record Date"), and contemplates the issuance
of one Right for each share of Common Stock of the Company issued
(whether originally issued or sold from the Company's treasury)
between the Record Date and the earlier of the Distribution Date or
the Expiration Date (as such terms are hereinafter defined), each
Right initially representing the right to purchase one ten-
thousandth (1/10,000) of a share of Series A Junior Participating
Cumulative Preferred Stock of the Company having the rights, powers
and preferences set forth on Exhibit A hereto, upon the terms and
subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and Associates (as
such term is hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary (as such term is
hereinafter defined) of the Company, (iii) any employee benefit
plan or compensation arrangement of the Company or any Subsidiary
of the Company or (iv) any Person holding shares of Common Stock
organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any such
employee benefit plan or compensation arrangement (the Persons
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described in clauses (i) through (iv) above are referred to herein
as "Exempt Persons").
Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Stock
by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the shares of Common Stock then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock of
the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional shares (other than
pursuant to a stock split, stock dividend or similar transaction)
of Common Stock of the Company and immediately thereafter be the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, then such Person shall be deemed to be an "Acquiring
Person."
In addition, notwithstanding the foregoing, a Person shall
not be an "Acquiring Person" if the Board of Directors of the
Company determines that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions
of this Section 1(a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of
shares of Common Stock so that such person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions
of this Section 1(a).
(b) "Adverse Person" shall mean any Person declared
to be an Adverse Person by the Board of Directors upon a
determination of the Board of Directors that the criteria set forth
in Section 11(a)(ii)(B) apply to such Person.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations (the "Rules") under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date of this Agreement; provided, however, that no Person
who is a director or officer of the Company shall be deemed an
Affiliate or an Associate of any other director or officer of the
Company solely as a result of his or her position as director or
officer of the Company.
(d) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly,
beneficially owns (as determined pursuant to Rule 13d-3 of
the Rules under the Exchange Act, as in effect on the date of
this Agreement);
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(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has:
(A) the right to acquire (whether such right
is exercisable immediately or only after the passage of
time or upon the satisfaction of any conditions or
both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide
public offering of securities) 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,"
(1) 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; (2) securities issuable upon exercise of
these Rights at any time prior to the occurrence of a
Triggering Event; or (3) securities issuable upon
exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such
Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Sections
3(a), 11(i) or 22 hereof; or
(B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this clause (B)
if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy
given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the Rules of the Exchange Act and (2) is not also then
reportable by such person on Schedule 13D under the
Exchange Act (or any comparable or successor report);
or
(C) the right to dispose of pursuant to any
agreement, arrangement or understanding (whether or not
in writing) (other than customary arrangements with and
between underwriters and selling group members with
respect to a bona fide public offering of securities);
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
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Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing)
(other than customary agreements with and between
underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (B) of Section 1(d)(ii) hereof)
or disposing of any securities of the Company;
provided, however, that (1) no Person engaged in business as an
underwriter of securities shall be deemed the Beneficial Owner of
any securities acquired through such Person's participation as an
underwriter in good faith in a firm commitment underwriting until
the expiration of 40 days after the date of such acquisition, and
(2) no Person who is a director or an officer of the Company shall
be deemed, as a result of his or her position as director or
officer of the Company, the Beneficial Owner of any securities of
the Company that are beneficially owned by any other director or
officer of the Company.
(e) "Business Day" shall mean any day other than
a Saturday, Sunday, or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized or obligated by law or
executive order to close.
(f) "Close of business" on any given date shall
mean 5:00 P.M., Boston, Massachusetts time, on such date; provided,
however, that if such date is not a Business Day it shall mean 5:00
P.M., Boston, Massachusetts time, on the next succeeding Business
Day.
(g) "Common Stock" shall mean the Common Stock,
par value $0.50 per share, of the Company, except that "Common
Stock" when used with reference to any Person other than the
Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interests having
power to control or direct the management, of such Person or, if
such Person is a Subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person and which has
issued and outstanding such capital stock, equity securities or
equity interests.
(h) "Distribution Date" shall have the meaning
defined in Section 3(a) hereof.
(i) "Exercise Price" shall have the meaning
defined in Section 4(a) hereof.
(j) "Expiration Date" and "Final Expiration Date"
shall have the meanings set forth in Section 7(a) hereof.
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(k) "Fair Market Value" of any securities or
other property shall be as determined in accordance with Section
11(d) hereof.
(l) "Person" shall mean an individual, a
corporation, a partnership, an association, a joint stock company,
a trust, a business trust, a government or political subdivision,
any unincorporated organization, or any other association or
entity.
(m) "Preferred Stock" shall mean shares of Series
A Junior Participating Cumulative Preferred Stock, par value $1.00
per share, of the Company having the rights and preferences set
forth in the form of Certificate of Designation attached hereto as
Exhibit A.
(n) "Principal Party" shall have the meaning
defined in Section 13(b) hereof.
(o) "Redemption Price" shall have the meaning
defined in Section 23 hereof.
(p) "Section 11(a)(ii) Event" shall mean any
event described in Section 11(a)(ii) hereof.
(q) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(r) "Stock Acquisition Date" shall mean the date
of the first public announcement (which for purposes of this
definition shall include, without limitation, the issuance of a
press release or the filing of a publicly-available report or other
document with the Securities and Exchange Commission or any other
governmental agency) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(s) "Subsidiary" shall mean, with respect to any
Person, any other Person of which a majority of the voting power of
the voting equity securities or voting interests is owned, directly
or indirectly, by such Person, or which is otherwise controlled by
such Person.
(t) "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 (as hereinafter defined in
Section 3(a)) also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights
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Agent hereby accepts such appointment. The Company may from
time to time appoint such Co-Rights Agents as it may deem necessary
or desirable. In the event the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any
Co-Rights Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates.
(a) From the date hereof until the earliest of
(i) the close of business on the tenth Business Day after the Stock
Acquisition Date, (ii) the close of business on the tenth Business
Day (or such other Business Day, if any, as the Board of Directors
may determine in its sole discretion) after the date of the
commencement by any Person, other than an Exempt Person, of a
tender or exchange offer if, upon consummation thereof, such Person
would be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding or (iii) the determination by the
Board of Directors of the Company, pursuant to the criteria set
forth in Section 11(a)(ii)(B) hereof, that a Person is an Adverse
Person (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights) (the earliest of
such dates being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y)
the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock. As soon as
practicable after the Company has notified the Rights Agent of the
occurrence of the Distribution Date, the Rights Agent will, at the
Company's expense, send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the close of
business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more certificates, in
substantially the form of Exhibit B hereto (the "Right
Certificates"), evidencing one Right for each share of Common Stock
so held. In the event that an adjustment in the number of Rights
per share of Common Stock has been made pursuant to Section 11(o)
hereof, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) at
the time of distribution of the Right Certificates, so that Right
Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As
of and after the close of business on the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) With respect to certificates for the Common
Stock issued prior to the close of business on the Record Date, the
Rights will be evidenced by such certificates for the Common Stock
on or until the Distribution Date (or the earlier redemption,
18
<PAGE> 19
expiration or termination of the Rights), and the registered
holders of the Common Stock also shall be the registered holders of
the associated Rights. Until the Distribution Date (or the earlier
redemption, expiration or termination of the Rights), the transfer
of any of the certificates for the Common Stock outstanding prior
to the date of this Agreement shall also constitute the transfer of
the Rights associated with the Common Stock represented by such
certificate.
(c) Certificates for the Common Stock issued
after the Record Date, but prior to the earlier of the Distribution
Date or the redemption, expiration or termination of the Rights,
shall be deemed also to be certificates for Rights, and shall bear
a legend, substantially in the form set forth below:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Shareholder Rights Agreement between J. Baker, Inc.
and Fleet National Bank, as Rights Agent, dated as of
December 15, 1994 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference
and a copy of which is on file at the principal
offices of J. Baker, 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. J. Baker, Inc. may redeem the Rights at
a redemption price of $0.01 per Right, subject to
adjustment, under the terms of the Rights Agreement.
J. Baker, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge
promptly after receipt of a written request therefor.
Under certain circumstances, Rights issued to or held
by Acquiring Persons, Adverse Persons or any
Affiliates or Associates thereof (as defined
in the Rights Agreement), and any subsequent holder
of such Rights, may become null and void.
With respect to such certificates containing the foregoing legend,
the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone until
the Distribution Date (or the earlier redemption, expiration or
termination of the Rights), and the transfer of any of such
certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
In the event that the Company purchases or acquires any shares of
Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the shares of Common Stock
19
<PAGE> 20
which are no longer outstanding. The failure to print the
foregoing legend on any such Common Stock certificate or any defect
therein shall not affect in any manner whatsoever the application
or interpretation of the provisions of Section 7(e) hereof.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of
election to purchase shares and of assignment and certificate to be
printed on the reverse thereof) shall each be substantially
in the form of 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, rule or
regulation 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
customary usage. The Right Certificates shall be in a machine
printable format and in a form reasonably satisfactory to the
Rights Agent. Subject to the provisions of Section 11 and Section
22 hereof, the Right Certificates, whenever distributed, shall be
dated as of the Record Date, shall show the date of
countersignature, and on their face shall entitle the holders
thereof to purchase such number of one ten-thousandths (1/10,000)
of a share of Preferred Stock as shall be set forth therein at the
price set forth therein (the "Exercise Price"), but the number of
such shares and the Exercise Price shall be subject to adjustment
as provided herein.
(b) Any Right Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
beneficially owned by (i) an Acquiring Person, an Adverse
Person or any Associate or Affiliate of an Acquiring Person or an
Adverse Person, (ii) a transferee of an Acquiring Person or an
Adverse Person (or of any Associate or Affiliate of an Acquiring
Person or an Adverse Person) who becomes a transferee after the
Acquiring Person or Adverse Person becomes such, or (iii) a
transferee of an Acquiring Person or an Adverse Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or
Adverse Person to holders of equity interests in such Acquiring
Person or Adverse Person or to any Person with whom the Acquiring
Person or Adverse Person has any continuing agreement, arrangement
or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, and any Right Certificate
20
<PAGE> 21
issued pursuant to Section 6, Section 11 or Section 22 upon
transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall have deleted
therefrom the second sentence of the existing legend on such Right
Certificate and in substitution therefor shall contain 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, an Adverse
Person or an Affiliate or an Associate of an
Acquiring Person or an Adverse Person (as such
terms are defined in the Rights Agreement). This
Right Certificate and the Rights represented hereby
may become null and void under certain circumstances
as specified in Section 7(e) of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence and identity of any Acquiring Person
or Adverse Person or any Associate or Affiliate thereof. The
Company shall instruct the Rights Agent in writing of the Rights
which should be so legended. The failure to print the foregoing
legend on any such Right Certificate or any defect therein shall
not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board or its President
or any Vice President, and by its Treasurer or any Assistant
Treasurer or by its Clerk or any Assistant Clerk, either manually
or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested to by
the Clerk or any Assistant Clerk of the Company, either manually or
by facsimile signature. The Right Certificates shall be
countersigned manually or by facsimile by an authorized signatory
of the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by an authorized signatory of
the Rights Agent, and issued and delivered by the Company with the
same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and
any Right Certificates may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
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<PAGE> 22
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at one of its offices
designated as the appropriate place for surrender of Right
Certificates upon exercise or 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 date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of
business on the Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged
for another Right Certificate or Certificates, entitling the
registered holder to purchase a like number of one ten-thousandths
(1/10,000) of a share of Preferred Stock (or following a Triggering
Event, preferred stock, cash, property, debt securities, common
stock or any combination thereof) as the Right Certificate or
Certificates surrendered then entitled such holder to purchase and
at the same Exercise Price. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and
shall surrender the Right Certificate or Certificates to be
transferred, split up, combined or exchanged, with the form of
assignment and certificate duly executed, at the 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 Section 4(b), Section
7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Certificates, as the case
may be, as so requested. The Company may require payment by the
registered holder of a Right Certificate, of a sum sufficient to
cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss,
22
<PAGE> 23
theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
satisfactory to them, and reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right
Certificate, if mutilated, the Company will execute and deliver a
new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise 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 office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate
Exercise Price for the total number of one ten-thousandths
(1/10,000) of a share of Preferred Stock (or other securities, cash
or other assets, as the case may be) as to which such surrendered
Rights are then exercised, at or prior to the earlier of (i) the
close of business on December 14, 2004 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof (the earliest of (i),
(ii) or (iii) being herein referred to as the "Expiration Date").
Except as set forth in Section 7(e) hereof and notwithstanding any
other provision of this Agreement, any Person who prior to the
Distribution Date becomes a record holder of shares of Common Stock
may exercise all of the rights of a registered holder of a Right
Certificate with respect to the Rights associated with such shares
of Common Stock in accordance with the provisions of this
Agreement, as of the date such Person becomes a record holder of
shares of Common Stock.
(b) The Exercise Price for each one
ten-thousandth (1/10,000) of a share of Preferred Stock pursuant to
the exercise of a Right shall initially be $70 (seventy dollars),
shall be subject to adjustment from time to time as provided in
Section 11 and Section 13 hereof and shall be payable in lawful
money of the United States of America in accordance with Section
7(c) below.
(c) Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, accompanied by payment of the Exercise Price for the
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<PAGE> 24
shares to be purchased and an amount equal to any applicable
transfer tax (as determined by the Rights Agent) in cash, or by
certified check or bank draft payable to the order of the Company,
the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of Preferred
Stock (or make available, if the Rights Agent is the transfer
agent therefor) certificates for the number of one ten-thousandths
(1/10,000) of a share of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one ten-thousandths (1/10,000) of a
share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent
to comply with such request, (ii) when appropriate, requisition
from the Company the amount of cash, if any, to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof,
(iii) promptly 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 promptly 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 Stock) of the Company, pay cash or distribute
other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash
or other property are available for distribution by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
Person, an Adverse Person or any Associate or Affiliate of an
Acquiring Person or an Adverse Person, (ii) a transferee of an
Acquiring Person or an Adverse Person (or of any Associate or
Affiliate of an Acquiring Person or an Adverse Person) who becomes
a transferee after the Acquiring Person or Adverse Person becomes
such or (iii) a transferee of an Acquiring Person or an Adverse
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<PAGE> 25
Person (or of any Associate or Affiliate of an Acquiring Person or
an Adverse Person) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or
Adverse Person to holders of equity interests in such Acquiring
Person or Adverse Person or to any Person with whom the Acquiring
Person or Adverse Person has any continuing agreement, arrangement
or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without
any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use
all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or Adverse Person or any Affiliates
or Associates of an Acquiring Person or an Adverse Person or any
transferee of any of them 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 of Rights 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
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company.
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<PAGE> 26
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock or any authorized and issued
shares of Preferred Stock held in its treasury, the number of
shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding and exercisable Rights.
(b) The Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable,
all shares of Preferred Stock issued or reserved for issuance to be
listed, upon official notice of issuance, upon the principal
national securities exchange, if any, upon which the Common Stock
is listed or, if the principal market for the Common Stock is not
on any national securities exchange, to be eligible for quotation
on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or any successor thereto or other
comparable quotation system.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after the
occurrence of a Section 11(a)(ii) Event on which the consideration
to be delivered by the Company upon exercise of the Rights has been
determined in accordance with Section 11(a)(iii) hereof, or as soon
as required by law following the Distribution Date, as the case may
be, a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon
as practicable after such filing and (iii) cause such registration
statement to remain effective (with a prospectus that at all times
meets the requirements of the Securities Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for
such securities or (B) the Expiration Date. The Company will
also take such action as may be appropriate under, and which will
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date determined in accordance
with the provisions of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect, in each case with prompt written
notice to the Rights Agent. Notwithstanding any such provision of
this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained.
26
<PAGE> 27
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all shares
of Preferred Stock delivered upon the exercise of the Rights shall,
at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that
it will pay when due and payable any and all federal and state
transfer taxes (including charges) which may be payable in respect
of the issuance or delivery of the Right Certificates or of any
certificates for shares of Preferred Stock 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 in
respect of the issuance or delivery of securities in a name other
than that of, the registered holder of the Right Certificates
evidencing Rights surrendered for exercise or to issue or deliver
any certificates for securities in a name other than that of the
registered holder upon the exercise of any Rights until such tax
shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become
the holder of record of the shares of Preferred Stock 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 Exercise 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 Stock
transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock transfer books of the Company are
open. Prior to the exercise of the Right evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights
of a shareholder of the Company with respect to shares for which
the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Exercise Price, Number and Kind of
Shares or Number of Rights. The Exercise 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.
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<PAGE> 28
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend
on the Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of
shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Exercise 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 Stock transfer books of the Company were
open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in
no event shall the consideration to be paid upon the exercise
of a Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of a
Right. If an event occurs which would require an adjustment
under both 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) Subject to the provisions of Section 24
hereof, in the event
(A) any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring
Person, or
(B) the Board of Directors of the Company,
by majority vote, shall declare any Person to be an
Adverse Person, after (x) a determination that such
Person, alone or together with its Affiliates and
Associates, has become the Beneficial Owner of 10% or
more of the outstanding shares of Common Stock and
(y) a determination by the Board of Directors, after
reasonable inquiry and investigation, including such
consultation, if any, with such persons as such
directors shall deem appropriate, that (a) such
Beneficial Ownership by such Person is intended to
cause, is reasonably likely to cause or will cause
28
<PAGE> 29
the Company to repurchase the Common Stock
beneficially owned by such Person or to cause
pressure on the Company to take action or enter into
a transaction or series of transactions which would
provide such Person with short-term financial gain
under circumstances where the Board of Directors
determines that the best long-term interests of the
Company and its shareholders, but for the actions and
possible actions of such Person, would not be served
by taking such action or entering into such
transactions or series of transactions at that time
or (b) such Beneficial Ownership is causing or
reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of
relationships with customers or impairment of the
Company's ability to maintain its competitive
position) on the business or prospects of the
Company; provided, however, that the Board of
Directors of the Company may not declare a Person to
be an Adverse Person if, prior to the time that such
Person acquired 10% or more of the shares of Common
Stock then outstanding, such Person provided to the
Board of Directors in writing a statement of such
Person's purpose and intentions in connection with
the proposed acquisition of Common Stock, together
with any other information reasonably requested of
such Person by the Board of Directors, and the Board
of Directors, based on such statement and reasonable
inquiry and investigation, including such
consultation, if any, with such Person as the Board
of Directors shall deem appropriate, determines
to notify and notifies such Person in writing that it
will not declare such Person to be an Adverse Person;
provided further, that the Board of Directors may
expressly condition in any manner a determination not
to declare a Person an Adverse Person on such
conditions as the Board of Directors may select,
including without limitation, such Person's not
acquiring more than a specified amount of stock
and/or on such Person's not taking actions
inconsistent with the purposes and intentions
disclosed by such Person in the statement provided
to the Board of Directors. No delay or failure by
the Board of Directors to declare a Person to be an
Adverse Person shall in any way waive or otherwise
affect the power of the Board of Directors
subsequently to declare a Person to be an Adverse
Person. In the event that the Board of Directors
should at any time determine, upon reasonable inquiry
and investigation, including consultation with such
Persons as the Board of Directors shall deem
29
<PAGE> 30
appropriate, that such Person has not met or complied
with any condition specified by the Board of
Directors, the Board of Directors may at any time
thereafter declare such Person to be an Adverse
Person pursuant to the provisions of this Section
11(a)(ii)(B),
then, and in each such case, promptly following any such
occurrence, proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have a right to receive, upon exercise
thereof at the then current Exercise Price in accordance with
the terms of this Agreement, such number of shares of
Preferred Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Exercise Price
by the then number of one ten-thousandths (1/10,000) of a
share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event and dividing that product by (y) 50% of the
Fair Market Value per one ten-thousandth (1/10,000)of a share
of the Preferred Stock (determined pursuant to Section 11(d))
on the date of the occurrence of any one of the events listed
above in this Section 11(a)(ii).
(iii) In the event that there shall not be
sufficient authorized but unissued shares of
Preferred Stock to permit the exercise in full of
the Rights in accordance with the foregoing Section
11(a)(ii), the Company shall take all action as may
be necessary to authorize and reserve for issuance
such number of additional shares of Preferred Stock
as may from time to time be required to be issued
upon the exercise in full of all Rights outstanding
and, if necessary, shall use its best efforts to
obtain shareholder approval thereof.
Notwithstanding the foregoing provisions of this
Section 11(a)(iii), in lieu of issuing shares of
Preferred Stock in accordance with Section 11(a)(ii)
hereof, if a majority of the Directors then in
office determines that such action is necessary or
appropriate and is not contrary to the interests of
the holders of the Rights, they may elect to cause
the Company to pay, and if sufficient shares of
Preferred Stock cannot be issued for such purpose in
accordance with the provisions hereof, the Company
shall issue or pay upon the exercise of the Rights,
cash, property, debt securities, shares of preferred
stock or common stock, or any combination thereof,
having an aggregate Fair Market Value equal to the
Fair Market Value of the shares of Preferred Stock
which otherwise would have been issuable pursuant to
Section 11(a)(ii).
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<PAGE> 31
(b) If the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase
Preferred Stock (or securities having the same or more favorable
rights, privileges and preferences as the shares of Preferred Stock
("preferred stock equivalents")) or securities convertible into
Preferred Stock or preferred stock equivalents at a price per share
of Preferred Stock or per share of preferred stock equivalents (or
having a conversion price per share, if a security convertible into
Preferred Stock or preferred stock equivalents) less than the Fair
Market Value (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock on such record date, the Exercise Price to
be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred
Stock to be offered (and the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at
such Fair Market Value and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred Stock and
preferred stock equivalents 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 a Right be
less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of a 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 the Fair Market Value thereof determined in
accordance with Section 11(d) hereof. Shares of Preferred Stock
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustments shall be made successively whenever such a record date
is fixed; and in the event that such rights or warrants are not so
issued, the Exercise Price shall be adjusted to be the Exercise
Price which would then be in effect if such record date had not
been fixed.
(c) If the Company shall fix a record date for
the making of a distribution to all holders of Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or convertible securities,
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<PAGE> 32
subscription rights or warrants (excluding those referred to in
Section 11(b)), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price
in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per one ten-thousandth
of a share of Preferred Stock on such record date, less the Fair
Market Value (as determined pursuant to Section 11(d) hereof) of
the portion of the cash, assets or evidences of indebtedness so to
be distributed or of such convertible securities, subscription
rights or warrants applicable to one ten-thousandth of a share of
Preferred Stock and the denominator of which shall be the Fair
Market Value (as determined pursuant to Section 11(d) hereof) per
one ten-thousandth of a share of Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon
the exercise of a Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of a
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 Exercise Price shall again be adjusted to be the
Exercise Price which would be in effect if such record date had not
been fixed.
(d) For the purpose of this Agreement, the "Fair
Market Value" of any share of Preferred Stock, Common Stock or any
other stock or any Right or other security or any other property
shall be determined as provided in this Section 11(d).
(i) In the case of a publicly-traded
stock or other security, the Fair Market Value on
any date shall be deemed to be the average of the
daily closing prices per share of such stock or per
unit of such other security for the 30 consecutive
Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however,
that in the event that the Fair Market Value per
share of any share of stock is determined during a
period following the announcement by the issuer of
such stock of (x) a dividend or distribution on
such stock payable in shares of such stock or
securities convertible into shares of such stock or
(y) any subdivision, combination or
reclassification of such stock, and prior to the
expiration of the 30 Trading Day period 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 Fair Market Value shall be properly
adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last
sale price, regular way, or, in case no such
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<PAGE> 33
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
securities 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 such security
is listed or admitted to trading; or, if not listed
or admitted to trading on any national securities
exchange, the last quoted price (or, if not so
quoted, the average of the last quoted 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 no bids for such
security are quoted by any such organization, the
average of the closing bid and asked prices as
furnished by a professional market maker making a
market in such security selected by the Board of
Directors of the Company. If on any such date no
market maker is making a market in such security,
the Fair Market Value of such security on such date
shall be determined reasonably and with utmost good
faith to the holders of the Rights by the Board of
Directors of the Company, provided, however, that
if at the time of such determination there is an
Acquiring Person or an Adverse Person, the Fair
Market Value of such security on such date shall be
determined by a nationally recognized investment
banking firm selected by the Board of Directors,
which determination shall be described in a
statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the
Rights. The term "Trading Day" shall mean a day on
which the principal national securities exchange on
which such security is listed or admitted to
trading is open for the transaction of business or,
if such security is not listed or admitted to
trading on any national securities exchange, a
Business Day.
(ii) If a security is not publicly held or
not so listed or traded, "Fair Market Value" shall
mean the fair value per share of stock or per other
unit of such security, determined reasonably and
with utmost good faith to the holders of the Rights
by the Board of Directors of the Company, provided,
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<PAGE> 34
however, that if at the time of such determination
there is an Acquiring Person or an Adverse Person,
the Fair Market Value of such security on such date
shall be determined by a nationally recognized
investment banking firm selected by the Board of
Directors, which determination shall be described
in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the
holders of the Rights; provided, however, that for
the purposes of making any adjustment provided for
by Section 11(a)(ii) hereof, the Fair Market Value
of a share of Preferred Stock shall not be less
than the product of the then Fair Market Value of
a share of Common Stock multiplied by the higher of
the then Dividend Multiple or Vote Multiple (as
both of such terms are defined in the Certificate
of Designation attached as Exhibit A hereto)
applicable to the Preferred Stock and shall not
exceed 105% of the product of the then Fair Market
Value of a share of Common Stock multiplied by the
higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock.
(iii) In the case of property other than
securities, the Fair Market Value thereof shall be
determined reasonably and with utmost good faith to
the holders of Rights by the Board of Directors of
the Company, provided, however, that if at the time
of such determination there is an Acquiring Person
or an Adverse Person, the Fair Market Value of such
property on such date shall be determined by a
nationally recognized investment banking firm
selected by the Board of Directors, which
determination shall be described in a statement
filed with the Rights Agent and shall be binding
upon the Rights Agent and the holders of the
Rights.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Exercise 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 millionth of
a share of Common Stock or hundred-millionth of a share of
Preferred Stock, as the case may be, or to such other figure as the
Board of Directors may deem appropriate. 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)
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<PAGE> 35
years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section
11(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 Stock, thereafter the number of such
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 Stock contained in Section 11(a), (b), (c), (e), (g)
through (k) and (m), inclusive, and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Exercise Price hereunder
shall evidence the right to purchase, at the adjusted Exercise
Price, the number of one ten-thousandths (1/10,000) of a share of
Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the
Exercise Price as a result of the calculations made in Section
11(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Exercise Price, that number of one
ten-thousandths (1/10,000) of a share of Preferred Stock
(calculated to the nearest one hundred-millionth) obtained by (i)
multiplying (x) the number of one ten-thousandths (1/10,000) of a
share of Preferred Stock for which a Right may be exercisable
immediately prior to this adjustment by (y) the Exercise Price in
effect immediately prior to such adjustment of the Exercise Price
and (ii) dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment of the Exercise Price.
(i) The Company may elect on or after the date of
any adjustment of the Exercise Price to adjust the number of
Rights, in substitution for any adjustment in the number of shares
of Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one ten-thousandths
(1/10,000) of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one
one-millionth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the
Exercise Price in effect immediately after adjustment of the
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<PAGE> 36
Exercise 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 Exercise 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 may bear, at
the option of the Company, the adjusted Exercise Price) and shall
be registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in
the Exercise Price or the number of one ten-thousandths (1/10,000)
of a share of Preferred Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Exercise Price per share and the number
of shares which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Exercise Price below the then stated value,
if any, of the number of one ten-thousandths (1/10,000) of a share
of Preferred Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of Preferred
Stock at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Exercise Price be made effective
as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the holder
of any Right exercised after such record date the number of one
ten-thousandths (1/10,000) of a share of Preferred Stock or other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one ten-thousandths
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<PAGE> 37
(1/10,000) of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on
the basis of the Exercise 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) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Exercise 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 consolidation or subdivision of the Preferred Stock,
issuance wholly for cash of any shares of Preferred Stock at less
than the Fair Market Value, issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, stock dividends
or issuance of rights, options or warrants referred to hereinabove
in this Section 11, hereafter made by the Company to holders of its
Preferred Stock, shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it
shall not, at any time after the Distribution Date and so long as
the Rights have not been redeemed pursuant to Section 23 hereof or
exchanged pursuant to Section 24 hereof, (i) consolidate with, (ii)
merge with or into, 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 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 if
(x) at the time of or immediately after such consolidation, merger
or sale there are any rights, warrants or other instruments
outstanding or agreements or arrangements in effect which would
substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights, or (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale the
shareholders of a Person who constitutes, or would constitute, the
"Principal Party" for the 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
further covenants and agrees that after the Distribution Date it
will not, except as permitted by Section 23 or Section 27 hereof,
take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action
will substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(o) In the event the Company shall at any time
after the date of this Agreement and prior to the Distribution Date
(i) declare or pay any dividend on the outstanding Common Stock
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<PAGE> 38
payable in shares of Common Stock or (ii) effect a subdivision,
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of
dividends in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in any such case (A) the
number of one ten-thousandths (1/10,000) of a share of Preferred
Stock purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one
ten-thousandths (1/10,000) of a share of Preferred Stock so
purchasable immediately prior to such event by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately prior to such event and the denominator
of which is the number of shares of Common Stock outstanding
immediately after such event, and (B) each share of Common Stock
outstanding immediately after such event shall have issued with
respect to it that number of Rights which each share of Common
Stock outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(o)
shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is
effected.
(p) The exercise of Rights under Section
11(a)(ii) shall only result in the loss of rights under Section
11(a)(ii) to the extent so exercised and shall not otherwise affect
the rights of holders of Right Certificates under this Rights
Agreement, including rights to purchase securities of the Principal
Party following a Section 13 Event which has occurred or may
thereafter occur, as set forth in Section 13 hereof. Upon exercise
of a Right Certificate under Section 11(a)(ii), the Rights Agent
shall return such Right Certificate duly marked to indicate that
such exercise has occurred.
Section 12. Certificate of Adjusted Exercise Price or Number
of Shares. Whenever an adjustment is made as provided in Section
11 or Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of
the facts accounting for such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Preferred
Stock and the Common Stock a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Right Certificate in
accordance with Section 26 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment
contained therein and shall not be deemed to have knowledge of any
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, following the Stock
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<PAGE> 39
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction which is not
prohibited by Section 11(n) hereof), and the Company shall not be
the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which is not prohibited by Section 11(n) hereof)
shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all
or part of the shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash
or any other property, or (z) the Company shall sell, mortgage or
otherwise transfer (or one or more of its Subsidiaries shall sell,
mortgage or otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating 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 or any Subsidiary of the Company in one or
more transactions, each of which is not prohibited by Section 11(n)
hereof), then, and in each such case, proper provision shall be
made so that: (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall have the right to receive, upon the
exercise thereof at the then current Exercise Price in accordance
with the terms of this Agreement, such number of validly authorized
and issued, fully paid and nonassessable shares of freely tradeable
Common Stock of the Principal Party (as hereinafter defined in
Section 13(b)), free and clear of rights of call or first refusal,
liens, encumbrances or other adverse claims, as shall be equal to
the result obtained by (1) multiplying the then current Exercise
Price by the number of one ten-thousandths (1/10,000) of a share of
Preferred Stock for which a Right is exercisable immediately prior
to the first occurrence of a Section 13 Event, and dividing that
product by (2) 50% of the Fair Market Value (determined pursuant to
Section 11(d) hereof) per share of the Common Stock of such
Principal Party on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale, mortgage or transfer, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply to such Principal
Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock to permit exercise of all
outstanding Rights in accordance with this Section 13(a) and the
making of payments in cash and/or other securities in accordance
with Section 11(a)(iii) hereof) in connection with such
consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may
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<PAGE> 40
be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction
described in clause (x) or (y) of the first sentence of
Section 13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to the merger or
consolidation; and
(ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a), the
Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (x) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding 12-month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect
Subsidiary or Affiliate of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; (y) in case such Person is a direct or indirect
Subsidiary or Affiliate of more than one Person, the Common Stocks
of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of
the Common Stock having the greatest aggregate market value of
shares outstanding; and (z) 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 (x) and (y) above 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 prior thereto (x)
the Principal Party shall have a sufficient number of authorized
shares of its Common Stock, which have not been issued or reserved
for issuance, to permit the exercise in full of the Rights in
accordance with this Section 13, and (y) the Company and each
Principal Party and each other Person who may become a Principal
Party as a result of such consolidation, merger, sale or transfer
shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Section
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<PAGE> 41
13(a) and (b) and further providing that, as soon as practicable
after the date of any consolidation, merger, sale or transfer of
assets mentioned in Section 13(a), the Principal Party at its own
expense will:
(i) prepare and file a registration
statement under the Securities Act with respect to the Rights
and the securities purchasable upon exercise of the Rights
on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts to
cause such registration statement to remain effective (with a
prospectus that at all times meets the requirements of the
Securities Act) until the 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;
(iii) use its best efforts to list (or
continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility requirements
for quotation on NASDAQ; and
(iv) deliver to holders of the Rights
historical financial statements for the Principal Party and
each of its Affiliates which comply in all material 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.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(o) hereof, or to distribute Right
Certificates which evidence fractional Rights. If the Company
elects not to issue such fractional Rights, the Company shall pay,
in lieu of such fractional Rights, 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 Fair Market Value of a whole Right, as determined
pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which
are integral multiples of one ten-thousandth (1/10,000) of a share
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<PAGE> 42
of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one
ten-thousandth (1/10,000) of a share of Preferred Stock). In
lieu of fractional shares of Preferred Stock that are not integral
multiples of one ten-thousandth (1/10,000) of a share of Preferred
Stock, 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 Fair
Market Value of one ten-thousandth (1/10,000) of a share of
Preferred Stock. For purposes of this Section 14(b), the Fair
Market Value of one ten-thousandth (1/10,000) of a share of
Preferred Stock shall be determined pursuant to Section 11(d)
hereof for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of
the Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, other than rights of action vested in
the Rights Agent pursuant to Sections 18 and 20 hereof, are
vested in the respective registered holders of the Right
Certificates (or, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any
Right Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Right Agent or of the
holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, on 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 Right
evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to
this Agreement. Holders of Rights shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred
by them in any action to enforce the provisions of 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:
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(a) prior to the Distribution Date, each Right
will be transferable only simultaneously and together with the
transfer of shares of Common Stock;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office or offices of the
Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and
treat the person in whose name a Right Certificate (or, prior to
the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or other Person as the
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
obligations; provided, however, that 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
Shareholder. 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 shares of Preferred Stock or any other securities
of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder
of any Right Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
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Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
such compensation as shall be agreed to in writing between the
Company and the Rights Agent for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses
of defending against any claim of liability arising therefrom,
directly or indirectly. The provisions of this Section 18(a) shall
survive the expiration of the Rights and the termination of this
Agreement.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered
or omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate for
Common Stock, Preferred Stock, or 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 and executed by the proper Person or
Persons.
(c) The Rights Agent shall not be liable for
consequential damages under any provision of this Agreement or for
any consequential damages arising out of any act or failure to act
hereunder.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services 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
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<PAGE> 45
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
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in
the name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and
in all such cases such Right 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 expressly 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 selected by it (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person or Adverse Person and the
determination of "Fair Market Value") 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 shall be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a person believed
by the Rights Agent to be the Chairman of the Board, a Vice
Chairman of the Board, the President, a Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company and delivered to the Rights Agent. Any
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.
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(c) The Rights Agent shall be liable hereunder
only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals contained in
this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by
the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall
it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section
7(e) hereof) or any adjustment required under the provisions of
Sections 11, 13 or 23(c) 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 a certificate describing any such
adjustment furnished in accordance with Section 12 hereof), nor
shall it be responsible for any determination by the Board of
Directors of the Company of the Fair Market Value of the Rights or
Preferred Stock pursuant to the provisions of Section 14 hereof;
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Right Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when so
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of
its duties hereunder and certificates delivered pursuant to any
provision hereof from any person believed by the Rights Agent to
be the Chairman of the Board, any Vice Chairman of the Board, the
President, a Vice President, the Clerk, an Assistant Clerk, the
Secretary, an Assistant Secretary, the Treasurer or an Assistant
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<PAGE> 47
Treasurer of the Company, and is authorized to apply to such
officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered to be
taken by it in good faith in accordance with instructions of any
such officer. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Agreement and the date on or
after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a
proposal included in such application on or after the date
specified in such application (which date shall not be less than
five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instructions in response to such application specifying the action
to be taken or omitted.
(h) The Rights Agent and any shareholder,
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
the 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, omission, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company or to the holders of the
Rights resulting from any such act, omission, default, neglect or
misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
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(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause (1) or
clause (2) thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing
mailed to the Company by first class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or
without cause) upon thirty (30) days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Stock and Preferred Stock by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of
thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent
Rights Agent or 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) a corporation
organized and doing business under the laws of the United States or
of the Commonwealth of Massachusetts or the State of New York (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
Commonwealth of Massachusetts or the State of New York), in good
standing, which is authorized under such laws to exercise stock
transfer or corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the time
of its appointment as Rights Agent a combined capital and surplus
of at least $50,000,000 or (b) an Affiliate of a corporation
described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and
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each transfer agent of the Common Stock and the Preferred Stock,
and mail a notice thereof in writing to the registered holders of
the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property
purchasable under the Right Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with
the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common
Stock so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereafter issued by the
Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i)
no such Right Certificate shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax
consequences to the Company or the person to whom such Right
Certificate would be issued, and (ii) no such Right Certificate
shall be issued if, and to the extent that, appropriate adjustments
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at
its option, redeem all but not less than all of the then
outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any dividend declared or paid on
the Common Stock in shares of Common Stock or any subdivision or
combination of the outstanding shares of Common Stock or similar
event occurring after the date of this Agreement (such redemption
price, as adjusted form time to time, being hereinafter referred to
as the "Redemption Price"). The Rights may be redeemed only until
the earliest to occur of (i) the close of business on the tenth
Business Day after the Stock Acquisition Date, (ii) the declaration
by the Board of Directors that any Person is an Adverse Person, or
(iii) the Final Expiration Date.
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(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights, and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to the Rights
Agent and to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for
the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. 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 or
Section 24 hereof or in connection with the purchase of shares of
Common Stock prior to the Distribution Date.
(c) The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the Fair
Market Value of the Common Stock as of the time of redemption) or
any other form of consideration deemed appropriate by the Board of
Directors.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at
its option, at any time on or after the occurrence of a Section
11(a)(ii) Event, 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 Section 7(e) hereof) for shares
of Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after
any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Stock of the Company.
(b) Immediately upon the action of the Company
ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 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 shall be to
receive that number of shares of Common Stock equal to the number
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<PAGE> 51
of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give notice of any such exchange
in accordance with Section 26 hereof; provided, however, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Each such notice of exchange will state
the method by which the exchange of the shares of Common Stock 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
Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24,
the Company, at its option, may substitute Preferred Stock (or
preferred stock equivalent, as such term is defined in Section
11(b) hereof) for Common Stock exchangeable for Rights, at the
initial rate of one ten-thousandth (1/10,000) of a share of
Preferred Stock (or preferred stock equivalent) for each share of
Common Stock, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Stock pursuant to the terms
thereof, so that the fraction of a share of Preferred Stock
delivered in lieu of each share of Common Stock shall have the same
voting rights as one share of Common Stock.
(d) In the event that there shall not be
sufficient shares of Common Stock or Preferred Stock (or preferred
stock equivalent) issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional shares of Common
Stock or Preferred Stock (or preferred stock equivalent) for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue
fractions of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. If the Company elects
not to issue such fractional shares of Common Stock, the Company
shall pay, in lieu of such fractional shares of Common Stock, to
the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the Fair
Market Value of a whole share of Common Stock. For the purposes of
this paragraph (e), the Fair Market Value of a whole share of
Common Stock shall be the closing price of a share of Common Stock
(as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any
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time after the Distribution Date, (i) to pay any dividend payable
in stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock (other
than a regular periodic cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with, or to effect any sale, mortgage or other
transfer (or to permit one or more of its Subsidiaries to effect
any sale, mortgage or other transfer), in one transaction or a
series of related 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 (other than a Subsidiary of the Company
in one or more transactions each of which is not prohibited by
Section 11(n) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Stock payable in Common Stock or to
effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of
dividends in Common Stock) then in each such case, the Company
shall give to each holder of a Right Certificate and to the Rights
Agent, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein
by the holders of the shares of Common Stock and/or Preferred
Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above
at least twenty (20) days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty
(20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the shares
of Common Stock and/or Preferred Stock, whichever shall be the
earlier.
(b) In case any Section 11(a)(ii) Event shall
occur, then, in any such case, the Company shall as soon as
practicable thereafter give to each registered holder of a Right
Certificate and to the Rights Agent, in accordance with Section 26
hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
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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,
addressed (until another address is filed in writing with the
Rights Agent) as follows:
J. Baker, Inc.
555 Turnpike Street
Canton, MA 02021
Attn: General Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or
by the holder of any Right Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
Fleet National Bank, Corporate Trust/Stock Transfer Dept.
111 Westminster, Street, Providence, RI 02903-0368
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, prior to the Distribution Date, to the holder of
any certificate representing shares of Common Stock) shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 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 as the Company may deem necessary or desirable without
the approval of any holders of certificates representing shares of
Common Stock. 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 holder 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 hereof in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an
Acquiring Person, an Adverse Person or any Affiliate or Associate
of an Acquiring Person or an Adverse Person); provided, however,
that from and after the Distribution Date 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)
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<PAGE> 54
any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and the benefits
to, the holders of Rights. Upon the delivery of such 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. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of
the holders of Common Stock. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any
amendment or supplement pursuant to this Section 27 which alters
the Rights Agent's rights or duties.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors. For all purposes of this Agreement, any calculation of
the number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the Rules under the
Exchange Act as in effect on the date hereof. The Board of
Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board or to the Company, or
as may be necessary or advisable in the administration of this
Agreement, including without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration
of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors in good
faith shall (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject any member of the Board of Directors to any
liability to the holders of the Rights or to any other person.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the
Common Stock) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
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<PAGE> 55
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;
provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from the Agreement would adversely affect the purpose or
effect of the Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 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 Commonwealth of Massachusetts
and for all purposes shall be governed by and construed in
accordance with the laws of such Commonwealth applicable to
contracts to be made and to be performed entirely within
Massachusetts.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
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<PAGE> 56
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
ATTEST: J. BAKER, INC.
By: /s/ Mark T. Beaudouin By: /s/ Jerry M. Socol
_____________________ ___________________
Mark T. Beaudouin Name: Jerry M. Socol
Title: President
ATTEST: FLEET NATIONAL BANK, as
Rights Agent
By: /s/ Rosemari Pavao By: /s/ William Gustafson
__________________ ______________________
Rosemari Pavao Name: William Gustafson
Title: Manager
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Exhibit A
VOTE OF DIRECTORS ESTABLISHING
SERIES A JUNIOR PARTICIPATING CUMULATIVE
PREFERRED STOCK
of
J. BAKER, INC.
Pursuant to Section 26 of Chapter 156B of the General Laws
of the Commonwealth of Massachusetts:
VOTED, that pursuant to authority conferred upon and vested
in the Board of Directors by the Articles of Organization, as
amended (the "Articles"), of J. Baker, Inc. (the "Corporation"),
the Board of Directors hereby establishes and designates a series
of Preferred Stock, par value $1.00 per share, of the Corporation,
and hereby fixes and determines the relative rights and preferences
of the shares of such series, in addition to those set forth in the
Articles, as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Cumulative Preferred Stock" (the "Series A Preferred Stock"),
and the number of shares constituting such series shall be 100,000.
Section 2. Dividends and Distributions.
(A) (i) Subject to the rights of the holders of any
shares of any series of preferred stock (or any similar stock)
ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of shares of common stock and
of any other junior 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 March, June, September and December 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
Series A Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $10.00 or (b) subject to
the provisions for adjustment hereinafter set forth, 10,000 times
the aggregate per share amount of all cash dividends, and 10,000
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
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otherwise), declared on 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 Series A Preferred Stock.
The multiple of cash and non-cash dividends declared on the common
stock to which holders of the Series A Preferred Stock are
entitled, which shall be 10,000 initially but which shall be
adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Dividend Multiple." In the event the
Corporation shall at any time after December 15, 1994 (the "Rights
Declaration Date") (i) declare or pay any dividend on common stock
payable in shares of common stock, or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of common
stock (by reclassification or otherwise than by payment of a
dividend in shares of common stock) into a greater or lesser number
of shares of common stock, then in each such case the Dividend
Multiple thereafter applicable to the determination of the amount
of dividends which holders of shares of Series A Preferred Stock
shall be entitled to receive shall be the Dividend Multiple
applicable immediately prior to such event multiplied by a
fraction, the numerator of which is the number of shares of common
stock outstanding immediately after such event and the denominator
of which is the number of shares of common stock that were
outstanding immediately prior to such event.
(ii)Notwithstanding anything else contained in this
paragraph (A), the Corporation shall, out of funds legally
available for that purpose, declare a dividend or distribution on
the Series A Preferred Stock as provided in this paragraph (A)
immediately after it declares a dividend or distribution on the
common stock (other than a dividend payable in shares of common
stock); provided that, 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 $1.00 per share on
the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(B) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of
such shares of Series A 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
Series A 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
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shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may fix in
accordance with applicable law a record date for the determination
of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon,
which record date shall be not more than such number of days prior
to the date fixed for the payment thereof as may be allowed by
applicable law.
Section 3. Voting Rights. In addition to any other voting
rights required by law, the holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 10,000 votes on all matters submitted to a vote
of the stockholders of the Corporation. The number of votes which
a holder of a share of Series A Preferred Stock is entitled to
cast, which shall initially be 10,000 but which may be adjusted
from time to time as hereinafter provided, is hereinafter referred
to as the "Vote Multiple." In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any
dividend on common stock payable in shares of common stock, or (ii)
effect a subdivision or combination or consolidation of the
outstanding shares of common stock (by reclassification or
otherwise than by payment of a dividend in shares of common stock)
into a greater or lesser number of shares of common stock, then in
each such case the Vote Multiple thereafter applicable to the
determination of the number of votes per share to which holders of
shares of Series A Preferred Stock shall be entitled shall be the
Vote Multiple immediately prior to such event multiplied by a
fraction, the numerator of which is the number of shares of common
stock outstanding immediately after such event and the denominator
of which is the number of shares of common stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the holders of
shares of common stock and the holders of shares of any other
capital stock of this Corporation having general voting rights,
shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) Except as otherwise required by applicable law or
as set forth herein, holders of Series A 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 taking any corporate action.
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Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the
Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders
of all such shares are then entitled;
(iii) except as permitted in subsection 4(A)(iv) below,
redeem, purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation,
dissolution or winding up) with the Series A
Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares
of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either
as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of
any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by
publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the
Board of Directors, after consideration of the
respective annual dividend rates and other relative
rights and preferences of the respective series
and classes, shall determine in good faith will
result in fair and equitable treatment among the
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<PAGE> 61
respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under subsection (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of preferred
stock and may be reissued as part of a new series of preferred
stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation (voluntary or otherwise), dissolution or winding up
of the Corporation, no distribution shall be made (x) to the
holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received an amount equal to
accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, plus an amount equal to
the greater of (1) $10,000.00 per share or (2) an aggregate amount
per share, subject to the provision for adjustment hereinafter set
forth, equal to 10,000 times the aggregate amount to be distributed
per share to holders of common stock, or (y) to the holders of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. In the event the
Corporation shall at any time after the Rights Declaration Date (i)
declare or pay any dividend on common stock payable in shares of
common stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of common stock (by
reclassification or otherwise than by payment of a dividend in
shares of common stock) into a greater or lesser number of shares
of common stock, then in each such case the aggregate amount per
share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (x) of the
preceding sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of
common stock outstanding immediately after such event and the
denominator of which is the number of shares of common stock that
were outstanding immediately prior to such event.
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<PAGE> 62
Neither the consolidation of nor merging of the Corporation
with or into any other corporation or corporations, nor the sale or
other transfer of all or substantially all of the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or
winding up of the Corporation within the meaning of this Section 6.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of common stock are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 10,000
times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or
for which each share of common stock is changed or exchanged, plus
accrued and unpaid dividends, if any, payable with respect to the
Series A Preferred Stock. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare or pay any
dividend on common stock payable in shares of common stock, or (ii)
effect a subdivision or combination or consolidation of the
outstanding shares of common stock (by reclassification or
otherwise than by payment of a dividend in shares of common stock)
into a greater or lesser number of shares of common stock, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of common stock
outstanding immediately after such event and the denominator of
which is the number of shares of common stock that were outstanding
immediately prior to such event.
Section 8. Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
Section 9. Ranking. Unless otherwise provided in the
Articles of Organization of the Corporation or a Certificate of
Vote of Directors Establishing a Class of Stock relating to a
subsequently-designated series of preferred stock of the
Corporation, the Series A Preferred Stock shall rank junior to any
other series of the Corporation's preferred stock subsequently
issued, as to the payment of dividends and the distribution of
assets on liquidation, dissolution or winding up and shall rank
senior to the common stock.
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Section 10. Amendment. The Articles of Organization of
the Corporation and this Certificate of Vote of Directors shall not
be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely (within the meaning of Section
77 of Chapter 156B of the Massachusetts General Laws) without, if
any shares of Series A Preferred Stock are then outstanding, the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of Series A Preferred Stock, voting separately
as a class.
Section 11. Fractional Shares. Series A Preferred Stock
may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
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Exhibit B
[Form of Right Certificate]
Certificate No. R-
________ Rights
NOT EXERCISABLE AFTER DECEMBER 14, 2004 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF J. BAKER, INC., AT $0.01 PER RIGHT ON THE TERMS SET FORTH
IN THE SHAREHOLDER RIGHTS AGREEMENT BETWEEN J. BAKER, INC. AND
FLEET NATIONAL BANK, AS RIGHTS AGENT, DATED AS OF DECEMBER 15, 1994
(THE "RIGHTS AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON, AN ADVERSE PERSON OR AN ASSOCIATE OR AFFILIATE
OF AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
J. BAKER, 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 Shareholder
Rights Agreement dated as of December 15, 1994 (the "Rights
Agreement") between J. BAKER, INC. (the "Company") and FLEET
NATIONAL BANK, as Rights Agent (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 the close
of business on December 14, 2004 at the office or offices of the
Rights Agent designated for such purpose, or its successors as
Rights Agent, one ten-thousandth (1/10,000) of a fully paid,
non-assessable share of the Series A Junior Participating
Cumulative Preferred Stock (the "Preferred Stock") of the Company,
at a purchase price of $____ per one ten-thousandth (1/10,000) of
a share (the "Exercise Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase and
the related Certificate duly executed. The number of Rights
evidenced by this Right Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the
Exercise Price per share set forth above, are the number and
Exercise Price as of ___________, based on the Preferred Stock as
constituted at such date.
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<PAGE> 65
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, an Adverse Person or an Affiliate or Associate of
any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Adverse
Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a
Person who, after such transfer, became an Acquiring Person or an
Adverse Person, or an Affiliate or Associate of an Acquiring Person
or an Adverse Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from
and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Preferred Stock or other securities which
may be purchased upon the exercise of the Rights evidenced by this
Right Certificate are subject to modification and adjustment upon
the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the principal office of the
Company and the designated office of the Rights Agent and are also
available upon written request to the Company or the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office or offices of the Rights
Agent designated for such purpose, may be exchanged for another
Right Certificate or Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of
shares of Preferred Stock as the Rights evidenced by the Right
Certificate or 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 Certificates for the number of
whole Rights not exercised. If this Right Certificate shall be
exercised in whole or in part pursuant to Section 11(a)(ii) of the
Rights Agreement, the holder shall be entitled to receive this
Right Certificate duly marked to indicate that such exercise has
occurred as set forth in the Rights Agreement.
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<PAGE> 66
Under certain circumstances, subject to the provisions of the
Rights Agreement, the Board of Directors of the Company at its
option may exchange all or any part of the Rights evidenced by this
Certificate for shares of the Company's Common Stock or Preferred
Stock at an exchange ratio (subject to adjustment) of one share of
Common Stock or one ten-thousandth (1/10,000) of a share of
Preferred Stock per Right.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Board of
Directors of the Company at its option at a redemption price of
$0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors).
The Company is not obligated to issue fractional shares of
stock upon the exercise of any Right or Rights evidenced hereby
(other than fractions which are integral multiples of one
ten-thousandth (1/10,000) of a share of Preferred Stock, which may,
at the election of the Company, be evidenced by depositary
receipts). If the Company elects not to issue such fractional
shares, in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose
the holder of shares of Preferred Stock, Common Stock or 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
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 an authorized
signatory of the Rights Agent.
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<PAGE> 67
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
[Corporate Seal] J. BAKER, INC.
Attested:
By:________________________
Name:
By: _________________________ Title: [Chairman, President
[Clerk or Assistant Clerk] or Vice President]
By:________________________
Name:
Title: [Treasurer or
Assistant Treasurer)
Countersigned:
FLEET NATIONAL BANK,
as Rights Agent
_________________________
Authorized Signatory
Date of countersignature:
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<PAGE> 68
[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) of___________________
___________________________________________________________________
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: _________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being transferred by or on behalf of a Person who
is or was an Acquiring Person, an Adverse Person or an Affiliate or
Associate of any such Person (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not directly or
indirectly acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person.
Dated: __________ ,_____
____________________________
Signature
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<PAGE> 69
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the face of
this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise the Right Certificate.)
To J. BAKER, INC.:
The undersigned hereby irrevocably elects to exercise _______
Rights represented by this Right Certificate to purchase the shares
of Preferred Stock issuable upon the exercise of the Rights (or
such other securities of the Company or of any other person which
may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of:
Please insert social security
or other identifying taxpayer number: __________________________
________________________________________________________________
(Please print name and address)
________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate or if the Rights are being
exercised pursuant to Section 11(a)(ii) of the Rights Agreement, a
new Right Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying taxpayer number: ___________________________
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
_________________________________________________________________
Dated: ___________,_____
____________________________
Signature
Signature Guaranteed: ______________________________
70
CERTIFICATE
<PAGE> 71
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is
or was an Acquiring Person, an Adverse Person or an Affiliate or
Associate of any such Person (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not directly or
indirectly acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person.
Dated: ____________,_____
____________________________
Signature
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<PAGE> 72
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
72
