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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9/A
(Amendment No.1)
Solicitation/Recommendation Statement
Pursuant to Section 14(d)(9) of the
Securities Exchange Act of 1934
Dr Pepper/Seven-Up Companies, Inc.
(Name of Subject Company)
Dr Pepper/Seven-Up Companies, Inc.
(Name of Person Filing Statement)
Common Stock, par value $.01 per share
(Title of Class of Securities)
256131 30 1
(CUSIP Number of Class of Securities)
Nelson A. Bangs
Vice President, General
Counsel & Secretary
Dr Pepper/Seven-Up Companies, Inc.
8144 Walnut Hill Lane
Dallas, Texas 75231-4372
(214) 360-7000
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person filing statement)
Copy to:
Andrew M. Baker
Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, Texas 75201
(214) 953-6735
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<PAGE>
This Amendment No. 1 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9, dated
February 1, 1995 (the "Schedule 14D-9"), relating to the offer by
DP/SU Acquisition Inc., a Delaware corporation (the "Purchaser")
and an indirect wholly owned subsidiary of Cadbury Schweppes plc,
an English company (the "Parent"), to purchase all of the
Company's issued and outstanding shares of common stock, par
value $.01 per share, and the associated preferred stock purchase
rights (the "Shares") of Dr Pepper/Seven-Up Companies, Inc. (the
"Company") at a price of $33.00 per Share, net to the seller in
cash. Terms used herein without definition shall have the
meanings ascribed to such terms in the aforementioned
Schedule 14D-9.
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<PAGE>
Item 8. Additional Information to be Furnished.
Item 8 is hereby amended and supplemented to add the
following:
Litigation. On January 25, 1995, David Rosenberg, F.
Richard Manson and Phyllis E. Burt filed separate suits against
the Company and its directors, John R. Albers, W.W. Clements,
Thomas O. Hicks, William E. Winter, Malcolm Candlish, Richard G.
Merrill and Ira M. Rosenstein, in the Delaware Court of Chancery.
All three plaintiffs filed on behalf of themselves and all other
holders of the Company common stock (except persons or entities
related to or affiliated with any defendant). Each complaint
alleges that the Company and its directors breached their
fiduciary duties in connection with negotiations involving the
possible takeover of the Company by Parent. Manson and Rosenberg
specifically complain about the Company's adoption of the Rights
Agreement. Rosenberg demands a judgment ordering the defendants to
carry out their fiduciary duties by: (1) undertaking an
appropriate evaluation of alternatives designed to maximize the
value of the Company's stock; (2) ensuring that no conflicts of
interest exist between the defendants' own interests and their
fiduciary obligation to the stockholders or, if such conflicts
exist, to ensure that all of the conflicts would be resolved in the
best interests of the Company's stockholders; and (3) appointing
a disinterested committee so that the interests of the Company's
stockholders would be protected. Rosenberg also seeks compensatory
damages, an accounting of any profits or special benefits obtained
by the defendants as a result of their conduct, and costs and
fees. Manson and Burt request injunctive relief against any
action by defendants which might have the effect of diminishing
shareholder value, compensatory damages, and costs and attorneys
fees. The Company believes the foregoing lawsuits are without
merit and intends to defend such lawsuits vigorously.
On February 7, 1995, the Vice Chancellor for the
Delaware Court of Chancery ordered that the Brem, Pearman, Balan,
Shaev, Tuchman, Rosenberg, Burt & Manson suits be consolidated
for all purposes and that Frank Pierce be added as a party
plaintiff to such consolidated action. The Vice Chancellor also
set for hearing on February 27, 1995 the plaintiffs' request for
a preliminary injunction.
On February 10, 1995, the same stockholders served a
Consolidated and Amended Class Action Complaint in the action styled
In Re: Dr Pepper/Seven-Up Companies, Inc. Shareholder Litigation,
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Civil Action No. 13109. The Complaint alleges that the individual
defendants, who comprise the Board of Directors of the Company, have
violated their fiduciary duties to the plaintiffs and the purported
class by (i) failing to insure the maximization of shareholder value
in the sale of control of the Company, (ii) improperly implementing
defensive measures that will thwart or impede the maximization of
shareholder value, (iii) failing to disclose all material facts to the
Company's stockholders, (iv) establishing a Special Committee lacking
independence, and (v) contracting with investment bankers to pay them
a fee primarily contingent upon successful completion of the Offer.
Additionally, the Complaint alleges that Parent aided and abetted the
alleged breaches of fiduciary duty. The Complaint asks for injunctive
relief preventing the defendants from proceeding with the proposed
acquisition of the Company by Parent or from taking any action that
would impede a full and fair auction and open bidding process. In
addition, the plaintiffs seek an order requiring the individual
defendants to fulfill their fiduciary duties to maximize shareholder
value by exploring third party interests and accepting the highest
offer obtainable, insuring that any conflicts of interest which may
exist are resolved in the best interest of the stockholders, and
acting independently by, among other things, appointing a
disinterested committee to review all bona fide offers. The
plaintiffs also seek a declaration that the Merger Agreement and the
Stockholders Agreement are null and void, and an award of compensatory
damages, costs and fees. The Company has advised Parent and
Purchaser that it believes that this purported class action lawsuit
is without merit and that it intends to defend against the lawsuit
vigorously.
Rights Agreement Amendment. Immediately prior to the
execution of the Merger Agreement, the Company amended the Rights
Agreement (the "Amendment"). A description of the Amendment is
contained under the caption "Merger Agreement -- Representations
and Warranties" in the Schedule 14D-9.
Item 9. Material to be Filed as Exhibits.
Exhibit
Number Description
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12 Stockholder Rights Agreement, dated
September 1, 1993, by and between Dr
Pepper/Seven-Up Companies, Inc. and Bank
One, Texas, N.A., Rights Agent.
13 First Amendment to Stockholder Rights
Agreement dated as of January 25, 1995.
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<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
February 13, 1995
DR PEPPER/SEVEN-UP COMPANIES, INC.
/S/ NELSON A. BANGS
By: ________________________________
Nelson A. Bangs
Vice President, General Counsel
and Secretary
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DR PEPPER/SEVEN-UP COMPANIES, INC.
and
BANK ONE, TEXAS, N.A.,
Rights Agent
________________
Rights Agreement
Dated as of September 1, 1993
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<PAGE>
TABLE OF CONTENTS
Section 1. Certain Definitions . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . 8
Section 3. Issue of Rights Certificates . . . . . . . . . 8
Section 4. Form of Rights Certificates . . . . . . . . . 10
Section 5. Countersignature and Registration . . . . . . 11
Section 6. Transfer, Split-Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates . . . . . . 11
Section 7. Exercise of Rights; Purchase Price . . . . . . 12
Section 8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . 14
Section 9. Reservation and Availability of Capital
Stock . . . . . . . . . . . . . . . . . . . . 14
Section 10. Preferred Stock Record Date . . . . . . . . . 16
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights . . . . . . . . 16
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . . . 24
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . 25
Section 14. Fractional Rights and Fractional Shares . . . 28
Section 15. Rights of Action . . . . . . . . . . . . . . . 28
Section 16. Agreement of Rights Holders . . . . . . . . . 29
Section 17. Rights Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . 30
Section 18. Concerning the Rights Agent . . . . . . . . . 30
Section 19. Merger or Consolidation or Change of Name of
Rights Agent .. . . . . . . . . . . . . . . . 30
Section 20. Duties of Rights Agent . . . . . . . . . . . . 31
Section 21. Change of Rights Agent . . . . . . . . . . . . 33
Section 22. Issuance of New Rights Certificates . . . . . 34
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Section 23. Redemption and Termination . . . . . . . . . . 34
Section 24. Exchange . . . . . . . . . . . . . . . . . . . 35
Section 25. Notice of Certain Events . . . . . . . . . . . 37
Section 26. Notices . . . . . . . . . . . . . . . . . . . 38
Section 27. Supplements and Amendments . . . . . . . . . . 38
Section 28. Successors . . . . . . . . . . . . . . . . . . 39
Section 29. Determinations and Actions by the Board of
Directors, etc . . . . . . . . . . . . . . . . 39
Section 30. Benefits of this Agreement . . . . . . . . . . 40
Section 31. Severability . . . . . . . . . . . . . . . . . 40
Section 32. Governing Law . . . . . . . . . . . . . . . . 40
Section 33. Counterparts . . . . . . . . . . . . . . . . . 40
Section 34. Descriptive Headings . . . . . . . . . . . . . 40
Exhibit A - Form of Certificate of Designations of Series A
Junior Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Stock
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<PAGE>
RIGHTS AGREEMENT
This Rights Agreement, dated as of September 1, 1993
(the "Agreement"), between Dr Pepper/Seven-Up Companies, Inc., a
Delaware corporation (the "Company"), and Bank One, Texas, N.A.,
a national banking association (the "Rights Agent"),
W I T N E S S E T H:
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WHEREAS, on September 1, 1993 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend of one Right for each share of
voting and nonvoting common stock, par value $.01 per share, of
the Company (respectively, "Voting Common Stock" and "Nonvoting
Common Stock" and, collectively the "Common Stock") outstanding
at the close of business on September 13, 1993 (the "Record
Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of the
Company issued (whether originally issued or delivered from the
Company's treasury) between the Record Date and the earlier of
the Distribution Date (as hereinafter defined) and the expiration
or redemption of the Rights, and, in certain circumstances, after
the Distribution Date, each Right initially representing the
right to purchase one one-thousandth of a share of Series A
Junior Participating Preferred Stock of the Company, upon the
terms and subject to the conditions hereinafter set forth (the
"Rights"); and
WHEREAS, the Rights issued (both by such dividend and
thereafter) in respect of each share of Voting Common Stock shall
be VCS Rights (as such term is defined herein) and the Rights
issued in respect of each share of Nonvoting Common Stock shall
be NCS Rights (as such term is defined herein);
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 shall have the meanings
indicated:
"Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 10% or more of the shares of Voting
Common Stock then outstanding, but shall not include any Exempt
Person; provided, however, that a Person shall not become an
Acquiring Person if such Person, together with its Affiliates and
Associates, shall become the Beneficial Owner of 10% or more of
the shares of Voting Common Stock then outstanding solely as a
result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of Common Stock by the Company,
unless and until such time as such Person or any Affiliate or
Associate of such Person shall purchase or otherwise become the
Beneficial Owner of any additional shares of Voting Common Stock
or any other Person (or Persons) who is (or collectively are) the
<PAGE>
Beneficial Owner of any shares of Voting Common Stock shall
become an Affiliate or Associate of such Person. At any time
prior to the Distribution Date, the Board of Directors may, with
respect to any specified Person or Persons, determine to increase
to a specified percentage greater than that set forth herein, the
level of Beneficial Ownership of Voting Common Stock at which
such Person or Persons becomes an Acquiring Person.
Notwithstanding anything contained in this Agreement to
the contrary, Cadbury Schweppes PLC ("Cadbury") shall not become
an Acquiring Person unless and until Cadbury, together with any
of its Affiliates or Associates, becomes the Beneficial Owner of
26% or more of the shares of Voting Common Stock then
outstanding; provided, however, that Cadbury shall not become an
Acquiring Person if Cadbury, together with its Affiliates and
Associates, shall become the Beneficial Owner of 26% or more of
the shares of Voting Common Stock then outstanding solely as a
result of a reduction in the number of shares of Common Stock
outstanding due to the repurchase of Common Stock by the Company,
unless and until such time as Cadbury or any Affiliate or
Associate of Cadbury shall purchase or otherwise become the
Beneficial Owner of any additional shares of Voting Common Stock
or any other Person who is the Beneficial Owner of any shares of
Voting Common Stock shall become an Affiliate or Associate of
Cadbury.
"Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
"Affiliate" shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement.
"Associate" shall mean, with reference to any Person,
(1) any corporation, firm, partnership, association,
unincorporated organization or other entity (other than the
Company or a Subsidiary of the Company) of which such Person is
an officer or general partner (or officer or general partner of a
general partner) or is, directly or indirectly, the Beneficial
Owner of 10% or more of any class of equity securities, (2) any
trust or other estate in which such Person has a substantial
beneficial interest or as to which such Person serves as trustee
or in a similar fiduciary capacity and (3) any relative or spouse
of such Person, or any relative of such spouse, who has the same
home as such Person.
A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, is the
"beneficial owner" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act,
as in effect on the date of this Agreement) or otherwise has
the right to vote or dispose of, including pursuant to any
agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this subparagraph (i) as a result of an
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<PAGE>
agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy or consent given in
response to a public (i.e., not including a solicitation
exempted by Rule 14a-2(b)(2) of the General Rules and
Regulations under the Exchange Act) proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations
under the Exchange Act and (B) is not then reportable by
such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report);
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right or obligation to acquire (whether such right or
obligation is exercisable or effective immediately or only
after the passage of time or the occurrence of an event)
pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights, warrants
or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which Rights were
acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights; or
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as set
forth in the proviso to subparagraph (i) of this definition)
or disposing of any voting securities of the Company;
provided, however, that nothing in this definition shall cause a
Person engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such Person's participation in good
faith in a firm commitment underwriting until the expiration of
forty days after the date of such acquisition, and provided
further, without limiting the generality of any other provision
contained herein, the Beneficial Owner of shares of Nonvoting
Common Stock shall be deemed to be the Beneficial Owner of the
shares of Voting Common Stock into which such Nonvoting Common
Stock is convertible notwithstanding the fact that a Conversion
Event (as defined in the Company's Amended and Restated
Certificate of Incorporation) has not occurred or that such
shares of Nonvoting Common Stock have not yet been converted.
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<PAGE>
"Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of Texas are authorized or obligated by law or executive
order to close.
"close of business" on any given date shall mean 5:00
p.m., Houston time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 p.m., Houston
time, on the next succeeding Business Day.
"Closing Price" of a security for any day shall mean
the last sales price, regular way, on such day or, in case no
such sale takes place on such day, the average of the closing bid
and asked prices, regular way, on such day, in either case as
reported in the principal transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange, or, if such security is not listed or
admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such security is
listed or admitted to trading, or, if such security is not listed
or admitted to trading on any national securities exchange but
sales price information is reported for such security, as
reported by NASDAQ or such other self-regulatory organization or
registered securities information processor (as such terms are
used under the Exchange Act) that then reports information
concerning such security, or, if sales price information is not
so reported, the average of the high bid and low asked prices in
the over-the-counter market on such day, as reported by NASDAQ or
such other entity, or, if on such day such security is not quoted
by any such entity, 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 such day no market maker is making a market in
such security, the fair value of such security on such day as
determined in good faith by the Board of Directors of the Company
shall be used.
"Common Stock" shall mean the common stock, par value
$.01 per share, of the Company either Voting Common Stock,
Nonvoting Common Stock, or both as the context shall require,
except that "Common Stock" when used with reference to stock
issued by any Person other than the Company shall mean the
capital stock of such Person with the greatest voting power, or
the equity securities or other equity interest having power to
control or direct the management, of such Person.
"Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
"Company" shall mean the Person named as the "Company"
in the preamble of this Agreement until a successor Person shall
have become such or until a Principal Party shall assume, and
thereafter be liable for, all obligations and duties of the
Company hereunder, pursuant to the applicable provisions of this
Agreement, and thereafter "Company" shall mean such successor
Person or Principal Party.
"Current Market Price" shall have the meaning set forth
in Section 11(d) hereof.
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<PAGE>
"Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
"Distribution Date" shall mean the earlier of (i) the
close of business on the tenth day (or, if such Stock Acquisition
Date results from the consummation of a Permitted Offer, such
later date as may be determined by the Company's Board of
Directors before the Distribution Date occurs) after the Stock
Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of
business on the Record Date) or (ii) the close of business on
the tenth Business Day (or such later date as may be determined
by the Company's Board of Directors before the Distribution Date
occurs) after the date that a tender offer or exchange offer by
any Person (other than any Exempt Person) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be an Acquiring Person.
The Board of Directors of the Company may, to the extent set
forth in the preceding sentence, defer the date set forth in
clause (i) or (ii) of the preceding sentence to a specified later
date or to an unspecified later date to be determined by a
subsequent action or event.
"Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
"Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.
"Exempt Person" shall mean the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, and any Person organized,
appointed or established by the Company for or pursuant to the
terms of any such plan.
"Expiration Date" shall mean the earliest of (i) the
Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, (iii) the time at
which the Rights expire pursuant to Section 13(d) hereof and
(iv) the time at which all Rights then outstanding and
exercisable are exchanged pursuant to Section 24 hereof.
"Final Expiration Date" shall mean the close of
business on September 13, 2003.
"Flip-In Event" shall mean an event described in
Section 11(a)(ii) hereof.
"Flip-In Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
"Flip-Over Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
"NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotations System.
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"NCS Rights" shall mean the Rights associated with the
Nonvoting Common Stock.
"NCS Rights Certificates" shall mean the certificates
evidencing NCS Rights.
"Nonvoting Common Stock" shall have the meaning set
forth in the recitals clause at the beginning of this Agreement.
"Original Rights" shall have the meaning set forth in
the definition of "Beneficial Owner."
"Permitted Offer" shall mean a tender offer or an
exchange offer for all outstanding shares of Common Stock at a
price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers or
employees of the Company and who are not representatives,
nominees, Affiliates or Associates of an Acquiring Person, after
receiving advice from one or more investment banking firms, to be
(a) at a price and on terms that are fair to stockholders (taking
into account all factors that such members of the Board deem
relevant including, without limitation, prices that could
reasonably be achieved if the Company or its assets were sold on
an orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company and its
stockholders.
"Person" shall mean any individual, firm, corporation,
partnership, association, trust, unincorporated organization or
other entity.
"Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the
Company having the rights, powers and preferences set forth in
the form of Certificate of Designations attached hereto as
Exhibit A and, to the extent that there is not a sufficient
number of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other
series of Preferred Stock, par value $.01 per share, of the
Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior
Participating Preferred Stock.
"Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
"Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
"Record Date" shall have the meaning set forth in the
recitals clause at the beginning of this Agreement.
"Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
"Rights" shall have the meaning set forth in the
recitals clause at the beginning of this Agreement and shall mean
either the VCS Rights or the NCS Rights or both as the context
shall require.
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"Rights Agent" shall mean the Person named as the
"Rights Agent" in the preamble of this Agreement until a
successor Rights Agent shall have become such pursuant to the
applicable provisions hereof, and thereafter "Rights Agent" shall
mean such successor Rights Agent. If at any time there is more
than one Person appointed by the Company as Rights Agent pursuant
to the applicable provisions of this Agreement, "Rights Agent"
shall mean and include each such Person.
"Rights Certificates" shall mean the certificates
evidencing the Rights and shall mean the VCS Rights Certificates
or the NCS Rights Certificates or both as the context shall
require.
"Rights Dividend Declaration Date" shall have the
meaning set forth in the recitals clause at the beginning of this
Agreement.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
"Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
"Subsidiary" shall mean, with reference to any Person,
any corporation or other Person of which an amount of voting
securities sufficient to elect at least a majority of the
directors or other persons performing similar functions is
beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
"Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
"Summary of Rights" shall mean the Summary of Rights to
Purchase Preferred Stock sent pursuant to Section 3(b) hereof.
"Trading Day" with respect to a security 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 but is
quoted by NASDAQ, a day on which NASDAQ reports trades, or, if
such security is not so quoted, a Business Day.
"Triggering Event" shall mean any Flip-In Event or any
Flip-Over Event.
"VCS Rights" shall mean the Rights associated with the
Nonvoting Common Stock.
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"VCS Rights Certificate" shall mean certificates
evidencing VCS Rights.
"Voting Common Stock" shall have the meaning set forth
in the recitals clause at the beginning of this Agreement.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-
Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the Distribution Date, (x) the Rights will
be evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for Common Stock registered in the
names of the holders of the Common Stock 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 (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will
send by first-class, insured, postage prepaid mail, to each
record holder of the 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 Rights Certificates,
evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. Holders of Voting
Common Stock shall be entitled to VCS Rights Certificates and
holders of Nonvoting Common Stock shall be entitled to NCS Rights
Certificates. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to
Section 11(p) hereof, at the time of distribution of the Right
Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights to
Purchase Preferred Stock, in substantially the form attached
hereto as Exhibit C, by first-class, postage prepaid mail, to
each record holder of Common Stock as of the close of business on
the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for Common
Stock outstanding as of the Record Date, until the Distribution
Date or the earlier surrender for transfer thereof or the
Expiration Date, the Rights associated with the shares of Common
Stock represented by such certificates shall be evidenced by such
certificates for Common Stock together with a copy of the Summary
of Rights, and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date, the
transfer of any of the certificates for Common Stock outstanding
on the Record Date, with or without a copy of the Summary of
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Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Stock represented by such
certificates.
(c) Rights shall be issued in respect of all shares of
Common Stock that are issued (whether originally issued or
delivered from the Company's treasury) after the Record Date but
prior to the earlier of the Distribution Date or the expiration
or redemption of the Rights or, in certain circumstances provided
in Section 22 hereof, after the Distribution Date. Certificates
issued for shares of Common Stock that shall so become
outstanding or shall be transferred or exchanged after the Record
Date but prior to the earlier of the Distribution Date or the
expiration or redemption of the Rights shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the
Rights Agreement between Dr Pepper/Seven-Up Companies,
Inc. (the "Company") and Bank One, Texas, N.A. (the
"Rights Agent") dated as of September 1, 1993 as it may
from time to time be supplemented or amended (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is
on file at the principal offices of the Company. Under
certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may be
exchanged, may expire or may be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company or the Rights Agent will mail
to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an
Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any
subsequent holder, will become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
the expiration or redemption of the Rights, the Rights associated
with the Common Stock represented by such certificates shall be
evidenced by such certificates alone, and registered holders of
Common Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. Without
limiting the generality of any provision contained herein, prior
to the Distribution Date, any conversion of Nonvoting Common
Stock into Voting Common Stock pursuant to the Company's Amended
and Restated Certificate of Incorporation shall require the
surrender to the Company of the NCS Rights associated with the
Nonvoting Common Stock so surrendered and the Voting Common Stock
issued upon such conversion shall include the VCS Rights
associated therewith.
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Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse
thereof), when, as and if issued, shall be substantially in the
form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or quotation system
on which the Rights may from time to time be listed or quoted, or
to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever issued,
shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of one one-
thousandths of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (such exercise price per
one one-thousandth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a direct or indirect transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such or
(iii) a direct or indirect transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person's becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person (or
its Affiliates or Associates) to holders of equity interests in
such Acquiring Person (or its Affiliates or Associates) or to any
Person with whom such Acquiring Person (or its Affiliates or
Associates) has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
that the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding that has as a primary
purpose or effect avoidance of Section 7(e) hereof, and any
Rights Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend, modified
as applicable to apply to such Person:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby [will]
[have] become null and void in the circumstances and
with the effect specified in Section 7(e) of such
Agreement.
The provisions of Section 7(e) of this Agreement shall be
operative whether or not the foregoing legend is contained on any
such Rights Certificate. The Company shall give notice to the
Rights Agent promptly after it becomes aware of the existence of
any Acquiring Person or any Associate or Affiliate thereof.
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<PAGE>
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile
thereof, which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by the
Rights Agent, either manually or by facsimile signature, and
shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the
Rights Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be
such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any person who, at the actual
date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement
any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
certificate number and the date of each of the Rights
Certificates.
Section 6. Transfer, Split-Up, Combination and
Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e), Section 13(d), Section 14 and Section 24 hereof, at any
time after the close of business on the Distribution Date, and at
or prior to the close of business on the Expiration Date, any
Rights Certificate or Rights Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase
a like number of one one-thousandths of a share of Preferred
Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the
Rights Certificate or Rights Certificates surrendered then
entitled such holder (or former holder in the case of a transfer)
to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or
Rights Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the
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<PAGE>
Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) thereof or of the Affiliates or
Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e), Section 13(d), Section 14 and Section 24 hereof,
countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment by the holder of a
sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer, split-up, combination
or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth
in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly
completed and executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one one-thousandths 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 exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each one one-thousandth of
a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $90, and shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate on the reverse side thereof duly executed,
accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one one-thousandth of a share of
Preferred Stock (or other shares, securities, cash or other
assets, as the case may be) to be purchased as set forth below
and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly
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<PAGE>
(i)(A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number
of one one-thousandths 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, in its sole discretion, shall have elected to deposit
the 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 one-thousandths 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) requisition from the Company the amount of cash, if any, to
be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
holder and (iv) after receipt thereof, deliver such cash, if any,
to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount
may be reduced pursuant to Section 11(a)(iii) hereof) may be made
in cash or by certified check, cashiers or official bank check or
bank draft payable to the order of the Company or the Rights
Agent. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash
and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available
for distribution by the Rights Agent, if and when appropriate.
The Company reserves the right to require prior to the occurrence
of a Triggering Event that, upon exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Flip-In Event,
any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person other than any such
Person that the Board of Directors in good faith determines was
not involved in and did not cause or facilitate, directly or
indirectly (including through any change in the Board of
Directors), such Flip-In Event, (ii) a direct or indirect
transferee of such Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a direct or indirect transferee of such
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person's becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from
such Acquiring Person (or such Affiliate or Associate) to holders
of equity interests in such Acquiring Person (or such Affiliate
or Associate) or to any Person with whom such Acquiring Person
(or such Affiliate or Associate) has any continuing agreement,
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<PAGE>
arrangement or understanding regarding the transferred Rights or
(B) a transfer that the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding that
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 Rights Certificates or other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split-up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital
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 (and, following the occurrence
of a Triggering Event, out of its authorized and unissued shares
of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement, including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities
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<PAGE>
exchange or quoted on any trading system, the Company shall use
its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be
listed on such exchange, or quoted on such system, upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to
(i) prepare and file, as soon as practicable following the first
occurrence of a Flip-In Event or, if applicable, as soon as
practicable following the earliest date after the first
occurrence of a Flip-In Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been
determined pursuant to this Agreement (including in accordance
with Section 11(a)(iii) hereof), a registration statement on an
appropriate form under the Securities Act with respect to the
securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable
for such securities and (B) the Expiration Date. The Company
will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of
time not to exceed 90 days after the date set forth in clause (i)
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. In addition, if the
Company shall determine that the Securities Act requires an
effective registration statement under the Securities Act
following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights until such time as such
a registration statement has been declared effective. Upon any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained,
the exercise thereof shall not be permitted under applicable law
or any required registration statement shall not have been
declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-
thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-thousandths of a share of
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Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax that may be payable
in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of
one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in respect of
a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one one-
thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Preferred Stock Record Date. Each
Person in whose name any certificate for a number of one one-
thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the
holder of record of such shares (fractional or otherwise) of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date
upon which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are
closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate, as such, shall not be entitled to
any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights. The Purchase Price, the
number and kind of shares or other securities subject to purchase
upon exercise of each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this
Section 11.
(a)(i) In the event the Company shall at any
time after the Rights Dividend Declaration Date (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
Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted
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so that the holder of any Right exercised after such time
shall be entitled to receive, upon payment of the Purchase
Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may
be, 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.
If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in
the event any Person shall, at any time after the Rights
Dividend Declaration Date, become an Acquiring Person,
unless the event causing such Person to become an Acquiring
Person is (1) a transaction set forth in Section 13(a)
hereof or (2) an acquisition of shares of Common Stock
pursuant to a Permitted Offer, then, promptly following the
occurrence of such event, each holder of a VCS Right and of
a NCS Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a
number of one one-thousandths of a share of Preferred Stock,
such number of shares of Voting Common Stock and Nonvoting
Common Stock, respectively, of the Company as shall equal
the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of
a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Flip-In Event
and (y) dividing that product (which product, following such
first occurrence, shall thereafter be the "Purchase Price"
for each Right and for all purposes of this Agreement) by
50% of the Current Market Price per share of Common Stock on
the date of such first occurrence (such number of shares,
the "Adjustment Shares"); provided that the Purchase Price
and the number of Adjustment Shares shall be further
adjusted as provided in this Agreement to reflect any events
occurring after the date of such first occurrence.
(iii) In the event that the number of shares
of Voting Common Stock or Nonvoting Common Stock that is
authorized by the Company's certificate of incorporation but
not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is not sufficient to permit
the exercise in full of the VCS Rights or the NCS Rights
respectively, or both, in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company shall,
as to such type of Right for which there is such
insufficiency to the extent permitted by applicable law and
regulation, (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right
(computed using the Current Market Price used to determine
the number of Adjustment Shares) (the "Current Value") over
(2) the Purchase Price (such excess is herein referred to as
the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares,
upon the exercise of the Rights and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares, or
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units of shares, of preferred stock that the Board of
Directors of the Company has determined to have the same
value as shares of Common Stock (such shares of preferred
stock are herein referred to as "Common Stock
Equivalents")), (4) debt securities of the Company,
(5) other assets or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Board of
Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by
the Board of Directors of the Company; provided, however, if
the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within 30 days
following the later of (x) the first occurrence of a Flip-In
Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Flip-In Trigger
Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to
the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the 30-day
period set forth above may be extended to the extent
necessary, but not more than 90 days after the Flip-In
Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding VCS Rights
as a class and all NCS Rights as a class, and (y) may
suspend the exercisability of either or both classes of the
Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights or either or both classes has
been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Voting
Common Stock and of the Nonvoting Common Stock shall be the
Current Market Price per share of the Common Stock on the
Flip-In Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the
Common Stock on such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within 45 calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("Equivalent
Preferred Stock")) or securities convertible into Preferred Stock
or Equivalent Preferred Stock at a price per share of Preferred
Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preferred Stock) less than the
Current Market Price per share of Preferred Stock on such record
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date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares
of Preferred Stock that the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred
Stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration, part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. 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
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of 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 quarterly 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 subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price per share of
Preferred Stock on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights
Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such Current Market Price per share
of Preferred Stock. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted
to be the Purchase Price which would have been in effect if such
record date had not been fixed.
(d)(i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share of Common Stock
of a Person on any date shall be deemed to be the average of
the daily Closing Prices per share of such Common Stock for
the 30 consecutive Trading Days immediately prior to such
date, and for purposes of computations made pursuant to
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Section 11(a)(iii) hereof, the "Current Market Price" per
share of Common Stock on any date shall be deemed to be the
average of the daily Closing Prices per share of such Common
Stock for the 10 consecutive Trading Days immediately
following such date; provided, however, that in the event
that the Current Market Price per share of Common Stock is
determined during a period following the announcement of (A)
a dividend or distribution on such Common Stock other than a
regular quarterly cash dividend or the dividend of the
Rights, or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend
date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, shall
not have occurred prior to the commencement of the requisite
30 Trading Day or 10 Trading Day period, as set forth above,
then, and in each such case, the Current Market Price shall
be properly adjusted to take into account ex-dividend
trading. If the Common Stock is not publicly held or not so
listed or traded, "Current Market Price" per share shall
mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
Notwithstanding anything to the contrary, the Current Market
Price of a share of Nonvoting Common Stock shall be deemed
to be equal to Current Market Price of a share of Voting
Common Stock subject to any appropriate adjustments for
stock splits, stock dividends or other similar matters to
the extent such adjustment was not already provided for in
the Company's Amended and Restated Certificate of
Incorporation.
(ii) For the purpose of any computation hereunder,
the "Current Market Price" per share (or one one-thousandth
of a share) of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in
clause (i) of this Section 11(d) (other than the last
sentence thereof). If the Current Market Price per share
(or one one-thousandth of a share) of Preferred Stock cannot
be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in
a manner described in clause (i) of this Section 11(d), the
"Current Market Price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1000 (as such
number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with
respect to the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per share
of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded,
Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the Current Market Price of one
one-thousandth of a share of Preferred Stock shall be equal
to the Current Market Price of one share of Preferred Stock
divided by 1000.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1%
in the Purchase Price; provided, however, that any adjustments
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that 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 hundred-thousandth of a
share of Common Stock or other share or ten-millionth of a share
of Preferred Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive in respect
of such Right any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall
be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (f), (g), (h), (i), (j), (k) and (m) hereof, 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 Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-thousandths 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 Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-thousandths of a share of Preferred Stock
covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price, and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights
of the class for which an adjustment is required, in lieu of any
adjustment in the number of one one-thousandths of a share of
Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights of such class outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one
one-thousandths of a share of Preferred Stock for which such a
Right was exercisable immediately prior to such adjustment. Each
Right of such a class held of record prior to such adjustment of
the number of Rights shall become that number of Rights
(calculated to the nearest hundred-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company
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shall make a public announcement of its election to adjust the
number of Rights of any class, indicating the record date for the
adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of
record of Rights Certificates of such class of Rights on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-thousandth of
a share and the number of one-thousandths of a share that were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value
or stated value, if any, of the number of one one-thousandths of
a share of Preferred Stock or of the number of shares of Common
Stock or other securities issuable upon exercise of a Right, the
Company shall take any corporate action that may, in the opinion
of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such
number of one one-thousandths of a share of Preferred Stock or
such number of shares of Common Stock or other securities at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the number
of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one one-thousandths 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 Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event
requiring such adjustment.
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<PAGE>
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities that by their terms are
convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11 hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Company in
a transaction that complies with Section 11(o) hereof), (ii)
merge with or into any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o)
hereof), or (iii) sell, lease or transfer (or permit one or more
Subsidiaries to sell, lease or transfer), in one transaction or a
series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
(and all of which together comply) with Section 11(o) hereof), if
(x) at the time of or immediately after such consolidation,
merger, sale, lease or transfer there are any rights, warrants or
other instruments or securities of the Company or any other
Person outstanding or agreements, arrangements or understandings
in effect that would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, (y)
prior to, simultaneously with or immediately after such
consolidation, merger, sale, lease or transfer, the stockholders
or other equity owners of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a)
hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates or Associates, or
(z) the identity, form or nature of organization of the Principal
Party (including without limitation the selection of the Person
that will be the Principal Party as a result of the Company's
entering into one or more consolidations, mergers, sales, leases,
transfers or transactions with more than one party) would
preclude or limit the exercise of Rights or otherwise diminish
substantially or eliminate the benefits intended to be afforded
by the Rights.
(o) The Company 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 the purpose of such action is to, or if at the time
such action is taken it is reasonably foreseeable that such
action will, diminish substantially or eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of a class of Common Stock payable in shares of such
Common Stock, (ii) subdivide the outstanding shares of a class of
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Common Stock, (iii) combine the outstanding shares of Common
Stock into a smaller number of shares or (iv) otherwise
reclassify the outstanding shares of a class of Common Stock, the
number of Rights associated with each share of such class Common
Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each
share of such class Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights
associated with each share of such class Common Stock immediately
prior to such event by a fraction (the "Adjustment Fraction") the
numerator of which shall be the total number of shares of such
class Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the
total number of shares of such class Common Stock outstanding
immediately following the occurrence of such event. In lieu of
such adjustment in the number of Rights associated with one share
of a class Common Stock, the Company may elect to adjust the
number of one one-thousandths of a share of Preferred Stock
purchasable upon the exercise of one Right and the Purchase
Price. If the Company makes such election, the number of Rights
associated with one share of such class Common Stock shall remain
unchanged, and the number of one one-thousandths of a share of
Preferred Stock purchasable upon exercise of one Right and the
Purchase Price shall be proportionately adjusted so that (i) the
number of one one-thousandths of a share of Preferred Stock
purchasable upon exercise of a Right following such adjustment
shall equal the product of the number of one one-thousandths of a
share of Preferred Stock purchasable upon exercise of a Right
immediately prior to such adjustment multiplied by the Adjustment
Fraction and (ii) the Purchase Price following such adjustment
shall equal the product of the Purchase Price immediately prior
to such adjustment multiplied by the Adjustment Fraction.
Without limiting the generality of any other provision contained
herein, the adjustments made herein shall be coordinated with the
adjustments required by Section 4.3 of the Company's Amended and
Restated Certificate of Incorporation.
Section 12. Certificate of Adjusted Purchase 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 Rights Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing shares of
Common Stock) as to whom the adjustment applies in accordance
with Section 26 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, on or after the Stock
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 that complies
with Section 11(o) 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
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a transaction that complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger, and, in connection with such
consolidation or merger, all or part of the outstanding shares of
the Voting Common Stock or the Nonvoting Common Stock shall be
changed into or exchanged for stock or other securities of the
Company or any other Person or cash or any other property, or (z)
the Company shall sell, lease or otherwise transfer (or one or
more of its Subsidiaries shall sell, lease or otherwise
transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company or any
combination thereof in one or more transactions each of which
complies (and all of which together comply) with Section 11(o)
hereof), then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be
made so that: (i) on and after the Distribution Date, each
holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and
issued, fully paid, nonassessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by
the number of one one-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first
occurrence of a Flip-Over Event (or, if a Flip-In Event has
occurred prior to the first occurrence of a Flip-Over Event,
multiplying the number of such one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Flip-In Event by the Purchase
Price in effect immediately prior to such first occurrence), and
dividing that product (which, following the first occurrence of a
Flip-Over Event, shall be the Purchase Price for each Right and
for all purposes of this Agreement) by (2) 50% of the Current
Market Price per share of the Common Stock of such Principal
Party on the date of consummation of such Flip-Over Event; (ii)
such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Flip-Over Event, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Flip-Over
Event; (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) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Flip-Over
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), (A) the
Person that is the issuer of any securities into which
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shares of Common Stock of the Company are converted in such
merger or consolidation, or, if there is more than one such
issuer, the issuer the Common Stock of which has the
greatest aggregate market value, or (B) if no securities are
so issued, (x) the Person that survives such consolidation
or is the other party to the merger and survives such
merger, or, if there is more than one such Person, the
Person the Common Stock of which has the greatest aggregate
market value or (y) if the Person that is the other party to
the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives);
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, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred, or if the Person
receiving the greatest portion of the assets or earning
power cannot be determined, the Person the Common Stock of
which has the greatest aggregate market value;
provided, however, that in any such case, if the Common Stock of
such Person is not at such time and has not been continuously
over the preceding twelve-month period registered under Section
12 of the Exchange Act, and if (1) such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; (2) such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of all 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; and (3) 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 (1) and
(2) 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 Flip-Over
Event unless each Principal Party (or Person that may become a
Principal Party as a result of such Flip-Over Event) shall have a
sufficient number of authorized shares of its Common Stock that
have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and each such Principal
Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of such Flip-Over
Event, 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, and will use its best efforts to cause
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such registration statement to (A) become effective as soon
as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;
(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, if the Common Stock of
the Principal Party is or shall become listed on a national
securities exchange, to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of
the Rights on such securities exchange and, if the Common
Stock of the Principal Party shall not be listed on a
national securities exchange, to cause the Rights and the
securities purchasable upon exercise of the Rights to be
reported by NASDAQ or such other transaction reporting
system then in use; and
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Flip-Over Event shall occur at any time after
the occurrence of a Flip-In Event, the Rights that have not
theretofore been exercised shall thereafter become exercisable in
the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a Permitted Offer (or
a wholly owned subsidiary of any such Person or Persons), (ii)
the price per share of Voting Common Stock and Nonvoting Common
Stock offered in such transaction is not less than the price per
share of Voting Common Stock and Nonvoting Common Stock
respectively paid to all holders of Voting Common Stock and
Nonvoting Common Stock respectively whose shares were purchased
pursuant to such Permitted Offer, and (iii) the form of
consideration being offered to the remaining holders of shares of
Voting Common Stock and Nonvoting Common Stock pursuant to such
transaction is the same as the form of consideration paid to
holders of the Voting Common Stock and Nonvoting Common Stock,
respectively, pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates or scrip evidencing fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered
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holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Closing Price of one Right for
the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than, except as
provided in Section 7(c) hereof, fractions that are integral
multiples of one one-thousandth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates or
scrip evidencing fractional shares of Preferred Stock (other
than, except as provided in Section 7(c) hereof, fractions that
are integral multiples of one one-thousandth of a share of
Preferred Stock). Fractions of shares of Preferred Stock in
integral multiples of one one-thousandth of a share of Preferred
Stock may, at the election of the Company in its sole discretion,
be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners
of the shares of Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of
Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of
one one-thousandth of the Closing Price of a share of Preferred
Stock for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates or scrip evidencing fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company
may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in
cash equal to the same fraction of the Closing Price of one share
of Common Stock for the Trading Day immediately prior to the date
of such exercise.
(d) The holder of a Right by the acceptance of the
Right 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 Section 18 hereof, are vested in
the respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered holders of
the Common Stock) and, where applicable, the Company; and any
registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of the Common Stock), may,
in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement.
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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. After a
Triggering Event, 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 Rights Holders. Every
holder of a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will
not be evidenced by Rights Certificates and will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights
Certificates will be transferable only on the registry books of
the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and
with the form of assignment set forth on the reverse side thereof
and the certificate contained therein duly completed and fully
executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the Person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common 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, subject to the last sentence of Section 7(e) hereof, 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 a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of one one-thousandths of a
share of Preferred Stock or any other securities of the Company
that may at any time be issuable upon the exercise of the Rights
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represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
reasonable disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against or investigating any
claim of liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it,
after proper inquiry or examination, to be genuine and to be
signed, executed and, where necessary, guaranteed, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in
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the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Rights Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of
"Current Market Price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Rights Certificates or be required to
verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
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hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after
receipt of actual knowledge of any such adjustment); nor shall it
by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Preferred Stock or Common Stock or other securities to be issued
pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Preferred Stock or Common Stock or other
securities will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President,
any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from
any such act, omission, default, neglect or misconduct; provided,
however, that reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
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(k) If, with respect to any Rights 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 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon 30 days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock and the Preferred Stock, by registered or certified
mail, and to the holders, if any, of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent (with or without cause) upon 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 the Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-
class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding the
foregoing provisions of this Section 21, in no event shall the
resignation or removal of a Rights Agent be effective until a
successor Rights Agent shall have been appointed and have
accepted such appointment. If the Company shall fail to make
such appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then the Rights Agent or the registered holder of
any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of the State of
Texas (or of any other state of the United States so long as such
corporation is authorized to conduct a stock transfer or
corporate trust business in the State of Texas), in good
standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 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 each transfer agent of the
Common Stock and the Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
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Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Voting Common Stock or Nonvoting Common Stock
following the Distribution Date and prior to the expiration or
redemption 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
granted or awarded on or prior to the Distribution Date, or upon
the exercise, conversion or exchange of securities issued by the
Company on or prior to the Distribution Date, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue VCS Rights Certificates or NCS
Rights Certificates respectively representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be
issued if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the close of business on the tenth day following
the Record Date) and (ii) the Final Expiration Date, cause the
Company to redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount
may be appropriately adjusted, if necessary, to reflect any stock
split, stock dividend or similar transaction occurring after the
Rights Dividend Declaration Date (such redemption price being
hereinafter referred to as the "Redemption Price"); provided,
however, that the Rights may not be redeemed following any merger
to which the Company is a party that (i) occurs after a Flip-In
Event has occurred and (ii) was not approved by the Board of
Directors of the Company and by the stockholders of the Company
at a stockholders' meeting. If, following the occurrence of a
Stock Acquisition Date and following the expiration of the right
of redemption hereunder but prior to any Triggering Event, (i) a
Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or indirectly
involving the Company or any of its Subsidiaries, which did not
result in the occurrence of a Triggering Event such that such
Person is thereafter a Beneficial Owner of 10% or less of the
outstanding shares of Voting Common Stock, and (ii) there are no
other Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons, then the
right of redemption set forth in this Section 23(a) shall be
reinstated and thereafter be subject to the provisions of this
Section 23. Notwithstanding anything contained in this Agreement
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to the contrary, the Rights shall not be exercisable after the
first occurrence of a Flip-In Event until such time as the
Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price of the Common
Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the effectiveness of the action
of the Board of Directors of the Company ordering the redemption
of the Rights (which action may be conditioned on the occurrence
of one or more events or on the existence of one or more facts or
may be effective at some future time), evidence of which shall
have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the effectiveness of 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 all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to
the Distribution Date, on the registry books of the Company for
the Common Stock. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state
the method by which the payment of the Redemption Price will be
made.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time and from time to time after the first
occurrence of a Flip-In Event, exchange all or part of the then
outstanding and exercisable VCS Rights and NCS Rights (which
shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for shares of Voting Common
Stock and Nonvoting Common Stock respectively or in either case
for Common Stock Equivalents or any combination thereof, at an
exchange ratio of one share of Common Stock, or such number of
Common Stock Equivalents or units representing fractions thereof
as would be deemed to have the same value as one share of Common
Stock (one share of Nonvoting Common Stock being deemed to have
the same value as one share of Voting Common Stock), per Right,
appropriately adjusted, if necessary, to reflect any stock split,
stock dividend or similar transaction occurring after the Rights
Dividend Declaration Date (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors may not 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 shares of Voting Common
Stock then outstanding.
(b) Immediately upon the effectiveness of the action
of the Board of Directors of the Company ordering the exchange of
any Rights pursuant to and in accordance with subsection (a) of
this Section 24 (which action may be conditioned on the
occurrence of one or more events or on the existence of one or
more facts or may be effective at some future time) and without
any further action and without any notice, the right to exercise
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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 and/or Common Stock Equivalents equal to the
number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of
any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by
which the exchange of the shares of Common Stock and/or Common
Stock Equivalents for Rights will be effected and, in the event
of any partial exchange, the number of Rights that will be
exchanged. Any partial exchange shall be effected as nearly pro
rata as possible 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 the event that the number of shares of Voting
Common Stock or Nonvoting Common Stock that is authorized by the
Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of
the VCS Rights or the NCS Rights respectively, or both, is not
sufficient to permit an exchange of Rights as contemplated in
accordance with this Section 24, the Company may, at its option,
take all such action as may be necessary to authorize additional
shares of VCS Rights or the NCS Common Stock respectively, or
both, for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute certificates
or scrip evidencing fractional shares of Common Stock. In lieu
of such fractional shares of Common Stock, the Company shall pay
to the registered holders of Rights 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 value of a whole
share of Common Stock. For purposes of this Section 24, the
value of a whole share of Voting Common Stock or Nonvoting Common
Stock shall be the Closing Price per share of Voting Common Stock
for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24, and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Voting
Common Stock on such date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in
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 quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the
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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 any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale, lease or other
transfer (or to permit one or more of its Subsidiaries to effect
any sale, lease or other transfer), in one transaction or a
series of related transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each
of which complies (and all of which together comply) with
Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of record of a Rights
Certificate, to the extent feasible and 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, lease, transfer,
liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of the shares of
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 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 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 Preferred Stock, whichever shall be the earlier. The
failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) In case any Flip-In Event shall occur, then
(i) the Company shall as soon as practicable thereafter give to
each holder of a VCS Rights Certificate and a NCS Rights
Certificate, to the extent feasible and 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 VCS Rights and NCS Rights, respectively, under
Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter
to refer to Voting Common Stock or Nonvoting Common Stock and/or,
if appropriate, other securities.
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 Rights Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Dr Pepper/Seven-Up Companies, Inc.
8144 Walnut Hill Lane
Dallas, Texas 75231-4372
Attention: General Counsel
Subject to provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
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<PAGE>
Bank One, Texas, N.A.
1717 Main Street, 7th Floor
Dallas, Texas 75201
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates 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 and subject to the penultimate sentence of
this Section 27, the Company may in its sole and absolute
discretion and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement in any
respect without the approval of any holders of certificates
representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company may and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein that may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem
necessary or desirable and that shall not materially adversely
affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of
this sentence, (A) a time period relating to when the Rights may
be redeemed at such time as the Rights are not then redeemable or
(B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights (other than any
Acquiring Person and its Affiliates and Associates). Upon the
delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment; provided, however,
that the Rights Agent may, but shall not be obligated to, enter
into any such supplement or amendment that affects the Rights
Agent's own rights, duties or immunities under this Agreement.
Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made that
decreases the Redemption Price or shortens the Final Expiration
Date. Prior to the Distribution Date, the interests of the
holders of VCS Rights and NCS Rights shall be deemed coincident
with the interests of the holders of Voting Common Stock and
Nonvoting Common Stock, respectively.
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.
-38-
<PAGE>
Section 29. Determinations and Actions by the Board
of Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock, Voting
Common Stock or Nonvoting Common Stock outstanding at any
particular time, including without limitation for purposes of
determining the particular percentage of such outstanding shares
of Voting Common Stock of which any Person is the Beneficial
Owner, shall except to the extent set forth in the proviso to
this sentence, be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act as in effect on the date hereof; provided,
however, that notwithstanding the foregoing that for all Persons,
the shares of Voting Common Stock issuable upon conversion of all
of the then outstanding Nonvoting Common Stock owned by any
Person shall be deemed to be outstanding for purposes of
determining a particular percentage of the outstanding shares of
Voting Common Stock. The Board of Directors of the Company (or,
as set forth herein, certain specified members thereof) shall
have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company 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, (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the
Rights or to amend this Agreement) and (iii) make any appropriate
distinction in furtherance of the purpose and intent of this
Agreement between VCS Rights and NCS Rights. All such actions,
calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors of the
Company in good faith, shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights, as
such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
Notwithstanding anything to the contrary contained herein, the
Board of Directors may convert each NCS Right into the
appropriate number of VCS Rights (and take appropriate actions
with respect to any associated Rights Certificates) if the Board
of Directors determines that such conversion is consistent with
and required by the Company's Amended and Restated Certificate of
Incorporation.
Section 30. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date,
registered holders of 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 Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
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
-39-
<PAGE>
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date
of such determination by the Board of Directors of the Company.
Without limiting the foregoing, if any provision requiring that a
determination be made by less than the entire Board of Directors
of the Company is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, such
determination shall then be made by the entire Board of Directors
of the Company.
Section 32. Governing Law. This Agreement, each
Right and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed
in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first
above written.
DR PEPPER/SEVEN-UP COMPANIES, INC.
By /s/ John R. Albers
------------------------------------------------
Name: John R. Albers
Title: President and Chief Executive Officer
BANK ONE, TEXAS, N.A.
By /s/ Phillip D. Gatlin
--------------------------------
Name: Phillip D. Gatlin
Title: Assistant Vice President
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<PAGE>
Exhibit A
---------
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
DR PEPPER/SEVEN-UP COMPANIES, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
DR PEPPER/SEVEN-UP COMPANIES, INC., a corporation
organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section
103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Amended and
Restated Certificate of Incorporation of the said Corporation,
the said Board of Directors on September 1, 1993, adopted the
following resolution creating a series of 145,000 shares of
Preferred Stock designated as "Series A Junior Participating
Preferred Stock":
RESOLVED, that pursuant to the authority vested in
the Board of Directors of this Corporation in
accordance with the provisions of the Amended and
Restated Certificate of Incorporation, a series of
Preferred Stock, par value $.01 per share, of the
Corporation be and hereby is created, and that the
designation and number of shares thereof and the voting
and other powers, preferences and relative,
participating, optional or other rights of the shares
of such series and the qualifications, limitations and
restrictions thereof are as follows:
Series A Junior Participating Preferred Stock
1. Designation and Amount. There shall be a series
of Preferred Stock that shall be designated as "Series A Junior
Participating Preferred Stock," and the number of shares
constituting such series shall be 145,000. Such number of shares
may be increased or decreased by resolution of the Board of
Directors; provided, however, that no decrease shall reduce the
number of shares of Series A Junior Participating Preferred Stock
to less than the number of shares then issued and outstanding
plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
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<PAGE>
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Junior Participating
Preferred Stock with respect to dividends, the holders of shares
of Series A Junior Participating Preferred Stock, in preference
to the holders of shares of any class or series of stock of the
Corporation ranking junior to the Series A Preferred Stock, shall
be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the 15th day of January,
April, July and October 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
Junior Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $10 or
(b) the Adjustment Number (as defined below) times the aggregate
per share amount of all cash dividends, and the Adjustment Number
times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Voting Common Stock, par value $.01
per share, of the Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. The "Adjustment Number"
shall initially be 1000. In the event the Corporation shall at
any time after September 1, 1993 (the "Rights Declaration Date")
(i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying
such Adjustment Number 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) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock
as provided in paragraph (A) above 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 $10 per share on the Series A Junior
Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Participating Preferred
Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series A Junior Participating
Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A
A-2
<PAGE>
Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Junior Participating
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 a
record date for the determination of holders of shares of Series
A Junior Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which
record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following
voting rights:
(A) Each share of Series A Junior Participating
Preferred Stock shall entitle the holder thereof to a number of
votes equal to the Adjustment Number on all matters submitted to
a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred
Stock, the holders of shares of Nonvoting Common Stock to the
extent such voting rights have been granted with respect to such
shares and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C)(i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in an
amount equal to six quarterly dividends thereon, the occurrence
of such contingency shall mark the beginning of a period (herein
called a "default period") that shall extend until such time when
all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on
all shares of Series A Junior Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred
Stock (including holders of the Series A Junior Participating
Preferred Stock) upon which these or like voting rights have been
conferred and are exercisable (the "Voting Preferred Stock") with
dividends in arrears in an amount equal to six quarterly
dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two Directors.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock may
be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting
of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Voting Preferred
Stock, if any, to increase, in certain cases, the authorized
number of Directors shall be exercised unless the holders of ten
percent in number of shares of Voting Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum
of the holders of Common Stock or any other class of stock shall
not affect the exercise by the holders of Voting Preferred Stock
of such voting right. At any meeting at which the holders of
Voting Preferred Stock shall exercise such voting right initially
A-3
<PAGE>
during an existing default period, they shall have the right,
voting as a class, to elect Directors to fill such vacancies, if
any, in the Board of Directors as may then exist up to two
Directors or, if such right is exercised at an annual meeting, to
elect two Directors. If the number that may be so elected at any
special meeting does not amount to the required number, the
holders of the Voting Preferred Stock shall have the right to
make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number.
After the holders of the Voting Preferred Stock shall have
exercised their right to elect Directors in any default period
and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of
the holders of Voting Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior to
or pari passu with the Series A Junior Participating Preferred
Stock.
(iii) Unless the holders of Voting Preferred Stock
shall, during an existing default period, have previously
exercised their right to elect Directors, the Board of Directors
may order, or any stockholder or stockholders owning in the
aggregate not less than ten percent of the total number of shares
of Voting Preferred Stock outstanding, irrespective of series,
may request, the calling of a special meeting of the holders of
Voting Preferred Stock, which meeting shall thereupon be called
by the Chairman of the Board, the President, a Vice President or
the Secretary of the Corporation. Notice of such meeting and of
any annual meeting at which holders of Voting Preferred Stock are
entitled to vote pursuant to this paragraph (C)(iii) shall be
given to each holder of record of Voting Preferred Stock by
mailing a copy of such notice to him at his last address as the
same appears on the books of the Corporation. Such meeting shall
be called for a time not earlier than 20 days and not later than
60 days after such order or request or, in default of the calling
of such meeting within 60 days after such order or request, such
meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent of
the total number of shares of Voting Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual
meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Voting Preferred Stock
shall have exercised their right to elect two Directors voting as
a class, after the exercise of which right (x) the Directors so
elected by the holders of Voting Preferred Stock shall continue
in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose
office shall have become vacant. References in this paragraph
(C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Voting Preferred Stock as
a class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Voting Preferred Stock as a
A-4
<PAGE>
class shall terminate and (z) the number of Directors shall be
such number as may be provided for in the Amended and Restated
Certificate of Incorporation or By-Laws irrespective of any
increase made pursuant to the provisions of paragraph (C)(ii) of
this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the Amended and
Restated Certificate of Incorporation or By-Laws). Any vacancies
in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority
of the remaining Directors.
(D) Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock and
Nonvoting Common Stock as set forth herein) for taking any
corporate action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
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
Junior Participating 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 Junior Participating 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 Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior
Participating 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) redeem or 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 Junior Participating 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 (both as to dividends and upon dissolution,
liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Junior Participating
Preferred Stock, or any shares of stock ranking on a parity
with the Series A Junior Participating 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
respective series or classes.
A-5
<PAGE>
(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 paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
5. Reacquired Shares. Any shares of Series A Junior
Participating 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 any conditions
and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the
holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A
Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Series A Junior Participating Preferred
Stock shall have received $1,000 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series
A Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock and Nonvoting Common Stock
shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) the Adjustment Number. Following
the payment of the full amount of the Series A Liquidation
Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock and Nonvoting Common Stock, respectively,
holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock and Nonvoting Common Stock, on a
per share basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
of all other series of Preferred Stock, if any, that rank on a
parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock and Nonvoting
Common Stock on a per share basis.
A-6
<PAGE>
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 Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed in an amount
per share equal to the Adjustment Number 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.
8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series
shall provide otherwise.
10. Amendment. At any time that any shares of Series
A Junior Participating Preferred Stock are outstanding, the
Amended and Restated Certificate of Incorporation of the
Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series A Junior Participating Preferred Stock so as
to affect them adversely without the affirmative vote of the
holders of a majority or more of the outstanding shares of Series
A Junior Participating Preferred Stock, voting separately as a
class.
11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share that 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 Junior Participating Preferred Stock.
IN WITNESS WHEREOF, the undersigned have executed and
subscribed this Certificate and do affirm the foregoing as true
under the penalties of perjury this ___ day of _______, 199_.
--------------------------------
-
Executive Vice President
Attest:
------------------------------
Secretary
A-7
<PAGE>
Exhibit B
---------
[Form of Rights Certificate]
Certificate No. R-VCS-* ________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 13, 2003 OR EARLIER IF REDEEMED
OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS WILL BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY [WILL] [HAVE]
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.**
Rights Certificate
DR PEPPER/SEVEN-UP COMPANIES, 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 Rights
Agreement, dated as of September 1, 1993 as it may from time to
time be supplemented or amended (the "Rights Agreement"), between
Dr Pepper/Seven-Up Companies, Inc., a Delaware corporation (the
"Company"), and Bank One, Texas, N.A., a national banking
association (the "Rights Agent"), to purchase from the Company at
any time prior to 5:00 p.m. (Houston time) on September 13, 2003
at the principal office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one one-
thousandth of a fully paid, nonassessable share of Series A
Junior Participating Preferred Stock (the "Preferred Stock") of
the Company, at a purchase price of $90 per one one-thousandth of
a share (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase
--------------------
* Certificates for VCS Rights shall be numbered with the
prefix "R-VCS-" and certificates for NCS Rights shall
be numbered with the prefix "R-NCS-"
** The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding
sentence.
B-1
<PAGE>
and related Certificate set forth on the reverse hereof duly
executed. The Purchase Price may be paid in cash or by certified
check, cashiers or official bank check or bank draft payable to
the order of the Company or the Rights Agent. The number of
Rights evidenced by this Rights Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of September 1, 1993, based on the
Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
From and after the occurrence of a Flip-In Event (as
such term is defined in the Rights Agreement), if the Rights
evidenced by this Rights Certificate are beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
concurrently with or after such transfer, became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void in the circumstances set forth
in the Rights Agreement, and no holder hereof shall have any
rights whatsoever with respect to such Rights from and after the
occurrence of such Flip-In Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other
securities or assets that may be purchased upon the exercise of
the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written
request to the Company or the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of one one-thousandths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may be redeemed by the
Company at its option at a redemption price of $.01 per Right,
payable, at the election of the Company, in cash or shares of
B-2
<PAGE>
Common Stock or such other consideration as the Board of
Directors may determine, at any time prior to the earlier of the
close of business on (a) the tenth day following the Stock
Acquisition Date (as defined in the Rights Agreement) (as such
time period may be extended or shortened pursuant to the Rights
Agreement) and (b) the Expiration Date (as such term is defined
in the Rights Agreement) or (ii) may be exchanged in whole or in
part for shares of the Company's [Voting]* Common Stock, par
value $.01 per share, and/or other equity securities of the
Company deemed to have the same value as shares of Common Stock,
at any time prior to a person's becoming the beneficial owner of
50% or more of the shares of Voting Common Stock outstanding.
After the expiration of the redemption period, the Company's
right of redemption may be reinstated if (i) an Acquiring Person
reduces its beneficial ownership to 10% or less of the
outstanding shares of Voting Common Stock in a transaction or
series of transactions not involving the Company and (ii) there
are no other Acquiring Persons.
No fractional shares of Preferred Stock are required to
be issued upon the exercise of any Right or Rights evidenced
hereby (other than, except as set forth above, fractions that are
integral multiples of one one-thousandth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment may be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any other
securities of the Company that 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 Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned
by the Rights Agent.
--------------------
* For NCS Rights Certificates, Voting shall read
"Nonvoting."
B-3
<PAGE>
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal.
Dated as of September 13, 1993
ATTEST: DR PEPPER/SEVEN-UP COMPANIES, INC.
By
-------------------- --------------------------------
Secretary Title:
Countersigned:
BANK ONE, TEXAS, N.A.
By
-----------------
Authorized Signature
B-4
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED hereby sells,
-------------------------------
assigns and transfers unto
--------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint __________________ Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: _________________, 199__
--------------------------------
-
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national
securities exchange, a member of the National Association of
Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or another
entity acceptable to the Rights Agent and the Company.
B-5
<PAGE>
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or who is a direct or indirect
transferee of an Acquiring Person or of an Affiliate or Associate
of an Acquiring Person.
Dated: _____________, 199__
--------------------------------
-
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national
securities exchange, a member of the National Association of
Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or another
entity acceptable to the Rights Agent and the Company.
NOTICE
The signatures to the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
B-6
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: DR PEPPER/SEVEN-UP COMPANIES, INC.
The undersigned hereby irrevocably elects to exercise
_________ Rights represented by this Rights 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 that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares (or other
securities) be issued in the name of and delivered to:
Please insert social security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
Dated: ____________, 199__
--------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national
securities exchange, a member of the National Association of
Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or another
entity acceptable to the Rights Agent and the Company.
B-7
<PAGE>
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or who is a direct or indirect transferee of an Acquiring
Person or of an Affiliate or Associate of an Acquiring Person.
Dated: _____________, 199__
--------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national
securities exchange, a member of the National Association of
Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or another
entity acceptable to the Rights Agent and the Company.
NOTICE
The signatures to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
B-8
<PAGE>
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On September 1, 1993, the Board of Directors of Dr
Pepper/Seven-Up Companies, Inc. (the "Company") declared a
dividend of one right to purchase preferred stock ("Right") for
each outstanding share of the Company's Voting Common Stock and
Nonvoting Common Stock, par value $.01 per share (respectively,
"Voting Common Stock" and "Nonvoting Common Stock" and
collectively, "Common Stock"), to stockholders of record at the
close of business on September 13, 1993. Each Right entitles the
registered holder to purchase from the Company a unit consisting
of one one-thousandth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, par value $.01 per share (the
"Preferred Stock"), at a purchase price of $90 per Unit, subject
to adjustment (the "Purchase Price"). The description and terms
of the Rights are set forth in a Rights Agreement dated as of
September 1, 1993 (the "Rights Agreement") between the Company
and Bank One, Texas, N.A., as Rights Agent. The Rights issued in
respect of each share of Voting Common Stock shall be VCS Rights
("VCS Rights") and the Rights issued in respect of each share of
Nonvoting Common Stock shall be NCS Rights ("NCS Rights").
Initially, the Rights will be attached to all
certificates representing outstanding shares of Common Stock, and
no separate certificates for the Rights ("Rights Certificates")
will be distributed. The Rights will separate from the Common
Stock and a "Distribution Date" will occur upon the earlier of
(i) ten days following a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of Voting
Common Stock (the date of the announcement being the "Stock
Acquisition Date"), or (ii) ten business days (or such later date
as may be determined by the Company's Board of Directors before
the Distribution Date occurs) following the commencement of a
tender offer or exchange offer that would result in a person's
becoming an Acquiring Person. Until the Distribution Date,
(a) the Rights will be evidenced by the Common Stock certificates
(together with a copy of this Summary of Rights or bearing the
notation referred to below) and will be transferred with and only
with such Common Stock certificates, (b) new Common Stock
certificates issued after September 13, 1993 will contain a
notation incorporating the Rights Agreement by reference and
(c) the surrender for transfer of any certificate for Common
Stock (with or without a copy of this Summary of Rights) will
also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. At any time prior
to the Distribution Date, the Board of Directors may increase the
level of beneficial ownership at which a specified person becomes
an Acquiring Person.
A holder of Nonvoting Common Stock is deemed to be the
beneficial owner of the shares of Voting Common Stock into which
such Nonvoting Common Stock is convertible notwithstanding the
fact that a Conversion Event (as defined in the Company's Amended
and Restated Certificate of Incorporation) has not occurred or
that such shares of Nonvoting Common Stock have not yet been
converted. The shares of Voting Common Stock issuable upon
conversion of all of the then outstanding Nonvoting Common Stock
C-1
<PAGE>
owned by any person are deemed to be outstanding for purposes of
determining a particular percentage of the outstanding shares of
Voting Common Stock. Cadbury Schweppes PLC will not be deemed an
Acquiring Person unless and until it becomes a beneficial owner
of 26% of the Voting Common Stock.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on September 13,
2003, unless earlier redeemed or exchanged by the Company as
described below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of Common
Stock as of the close of business on the Distribution Date and,
from and after the Distribution Date, the separate Rights
Certificates alone will represent the Rights. All shares of
Voting Common Stock and Nonvoting Common Stock issued prior to
the Distribution Date will be issued with VCS Rights and NCS
Rights, respectively. Shares of Voting Common Stock and
Nonvoting Common Stock issued after the Distribution Date in
connection with certain employee benefit plans or upon conversion
of certain securities will be issued with VCS Rights and NCS
Rights, respectively. Except as otherwise determined by the
Board of Directors, no other shares of Common Stock issued after
the Distribution Date will be issued with Rights.
In the event (a "Flip-In Event") that a person becomes
an Acquiring Person (except pursuant to a tender or exchange
offer for all outstanding shares of Common Stock at a price and
on terms that a majority of the independent directors of the
Company determines to be fair to and otherwise in the best
interests of the Company and its stockholders (a "Permitted
Offer")), each holder of a VCS Right and a NCS Right will
thereafter have the right to receive, upon exercise of such
Right, a number of shares of Voting Common Stock and Nonvoting
Common Stock, respectively (or, in certain circumstances, cash,
property or other securities of the Company) having a Current
Market Price (as defined in the Rights Agreement) equal to two
times the exercise price of the Right. Notwithstanding the
foregoing, following the occurrence of any Flip-In Event, all
Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring
Person (or by certain related parties) will be null and void in
the circumstances set forth in the Rights Agreement. However,
Rights are not exercisable following the occurrence of any Flip-
In Event until such time as the Rights are no longer redeemable
by the Company as set forth below. Each share of Nonvoting
Common Stock is deemed to have the same value as a share of
Voting Common Stock.
For example, at an exercise price of $90 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties) following an event set forth in the preceding
paragraph would entitle its holder to purchase $180 worth of
Common Stock (or other consideration, as noted above), based upon
its then Current Market Price, for $90. Assuming that the Common
Stock had a Current Market Price of $20 per share at such time,
the holder of each valid Right would be entitled to purchase 9
shares of Common Stock for $90.
In the event (a "Flip-Over Event") that, at any time on
or after the Stock Acquisition Date, (i) the Company is acquired
in a merger or other business combination transaction (other than
certain mergers that follow a Permitted Offer), or (ii) 50% or
more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights that
previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, a number of shares of
common stock of the acquiring company having a Current Market
Price equal to two times the exercise price of the Right. Flip-
In Events and Flip-Over Events are collectively referred to as
"Triggering Events."
C-2
<PAGE>
The Purchase 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 Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional Units are required
to be issued and, in lieu thereof, an adjustment in cash may be
made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise. Pursuant to the
Rights Agreement, the Company reserves the right to require prior
to the occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
At any time until ten days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right, payable, at the option
of the Company, in cash, shares of Common Stock or such other
consideration as the Board of Directors may determine. After the
redemption period has expired, the Company's right of redemption
may be reinstated prior to the occurrence of any Triggering Event
if (i) an Acquiring Person reduces its beneficial ownership to
10% or less of the outstanding shares of Voting Common Stock in a
transaction or series of transactions not involving the Company
and (ii) there are no other Acquiring Persons. Immediately upon
the effectiveness of the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the
$.01 redemption price.
At any time after the occurrence of a Flip-In Event and
prior to a person's becoming the beneficial owner of 50% or more
of the shares of Voting Common Stock then outstanding, the
Company may exchange the VCS Rights and NCS Rights (other than
Rights owned by an Acquiring Person or an affiliate or an
associate of an Acquiring Person, which will have become void),
in whole or in part, at an exchange ratio of one share of Voting
Common Stock and Nonvoting Common Stock respectively, and/or
other equity securities deemed to have the same value as one
share of Common Stock, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights should not be
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Common Stock (or
other consideration) of the Company or for the common stock of
the acquiring company as set forth above or are exchanged as
provided in the preceding paragraph.
C-3
<PAGE>
Other than certain provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. Thereafter, the provisions of
the Rights Agreement may be amended by the Board of Directors in
order to cure any ambiguity, defect or inconsistency, to make
changes that do not materially adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the
Rights Agreement; provided, however, that no amendment to
lengthen the time period governing redemption shall be made at
such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company and the
Rights Agent. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein
by reference.
C-4
EXHIBIT 13
---------
FIRST AMENDMENT TO RIGHTS AGREEMENT
This Amendment, dated as of January 25, 1995 (the
"Amendment"), is between Dr Pepper/Seven-Up Companies, Inc., a
Delaware corporation (the "Company"), and Bank One, Texas, N.A., a
national banking association (the "Rights Agent"),
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and the Rights Agent are parties to a
Rights Agreement dated as of September 1, 1993 (the "Agreement"); and
WHEREAS, pursuant to Section 27 of the Agreement, the Company
and the Rights Agent desire to amend the Agreement set forth below.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Amendments to Section 1.
(a) The definition of "Beneficial Owner" is amended by adding
the following at the end of the definition:
Notwithstanding anything contained in this Agreement to the
contrary, neither Parent nor its Affiliates shall be deemed to be
the Beneficial Owner of nor to beneficially own any Common Stock
beneficially owned by a Director Stockholder as a result of the
Stockholders Stock Tender Agreement unless and until such Common
Stock is accepted for purchase or purchased pursuant to the
Offer. No Director Stockholder shall be deemed to be the
Beneficial Owner of nor to beneficially own any Common Stock that
is beneficially owned by either another Director Stockholder or
by Parent or its Affiliates as a result of the Stockholders Stock
Tender Agreement.
(b) The definition of Expiration Date is amended by deleting
such definition in its entirety and substituting the following:
"Expiration Date" shall mean the earliest of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof, (iii) the time at which the
Rights expire pursuant to Section 13(d) hereof, (iv) the time at
which all Rights then outstanding and exercisable are exchanged
pursuant to Section 24 hereof and (v) immediately prior to the
purchase of Common Stock pursuant to the Cadbury Offer. Upon the
Expiration Date, the Rights shall expire.
(c) The definition of "Permitted Offer" is amended by adding
the following at the end of the definition:
Exhibit 13 - 1
<PAGE>
At any time prior to the acceptance of Common Stock pursuant to a
Permitted Offer, the Board of Directors may rescind the
determination that a tender offer or exchange offer is a
Permitted Offer.
(d) The following definitions are added to Section 1 of the
Agreement:
"Cadbury Offer" shall mean the cash tender offer to acquire
all the issued and outstanding shares of Common Stock which is
defined as the "Offer" in the Merger Agreement;
"Director Stockholders" (individually, a Director
Stockholder) shall mean those directors of the Company that are
parties to the Stockholders Stock Tender Agreement.
"Merger" shall mean the merger of Purchaser with and into
the Company in accordance with the General Corporation Law of the
State of Delaware following the consummation of the Cadbury Offer
and upon the terms and subject to the conditions set forth in the
Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of
Merger, dated as of January 25, 1995, among Parent, Purchaser,
and the Company. but shall not include any amendment to such
Merger Agreement.
"Parent" shall mean Cadbury Schweppes plc, a company
organized under the laws of England and any assignee of Parent
pursuant to Section 9.5 of the Merger Agreement.
"Purchaser" shall mean DP/SU Acquisition Inc., a Delaware
corporation and an indirect wholly owned subsidiary of Parent and
any assignee of Purchaser pursuant to Section 9.05 of the Merger
Agreement.
"Stockholders Stock Tender Agreement" shall mean that
agreement dated as of January 25, 1995 among Parent and the
Director Stockholders providing for among other things, the
agreement of the Director Stockholders to tender Common Stock
pursuant to the Cadbury Offer as described in the Merger
Agreement.
Section 2. New Section 35.
The following is added as a new Section 35:
Section 35. Cadbury Offer; Merger etc. None of the
execution or delivery of the Merger Agreement or the Stockholders
Stock Tender Agreement or the making of the Cadbury Offer, in
each case in accordance with the Merger Agreement, shall cause
(i) Parent or Purchaser or any of their Affiliates to be an
Acquiring Person, (ii) a Stock Acquisition Date to occur or (iii)
a Distribution Date to occur in accordance with the terms hereof,
which Distribution Date, if any, shall instead be indefinitely
deferred until such time as the Board of Directors may otherwise
determine. None of the acceptance for payment or payment of
shares of Common Stock by Purchaser pursuant to the Cadbury Offer
(including shares covered by the Stockholders Stock Tender
Agreement) nor the consummation of the Merger, in each case in
accordance with the Merger Agreement, shall cause (i) Parent or
Purchaser or any of their Affiliates to be an
Exhibit 13 - 2
<PAGE>
Acquiring Person, (ii) a Stock Acquisition Date to occur or (iii) a
Distribution Date to occur in accordance with the terms hereof,
which Distribution Date shall instead be indefinitely deferred
until such time as the Board of Directors may otherwise determine;
provided, that if, prior to the time that the Rights have expired,
the Merger Agreement is terminated pursuant to its terms, then
neither the provisions of this sentence (other than this proviso)
nor clause (v) of the definition of "Expiration Date" shall be of
any effect.
Section 3. Severability. If any term, provision, covenant
or restriction of this Amendment 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 Amendment shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
Section 4. Governing Law. This Amendment shall be deemed
to be a contract made under the laws of the State of Delaware and for
all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts made and to be performed
entirely within such State.
Section 5. Counterparts. This Amendment 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 6. Effect of Amendment. Except as expressly
modified herein, the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed all as of the day and year first above
written.
DR PEPPER/SEVEN-UP COMPANIES
By /s/ Nelson A. Bangs
---------------------------
Name: Nelson A. Bangs
Title: Vice President, General
Counsel and Secretary
BANK ONE TEXAS, N.A.
By /s/ Jeff Salavarria
---------------------------
Name: Jeff Salavarria
Title: Assistant Vice President
Exhibit 13 - 3
