SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
AMENDMENT NO. 1
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ShopKo Stores, Inc.
(Exact Name of Registrant as Specified in its Charter)
Minnesota 41-0985054
(State of incorporation or organization)
(IRS Employer
Identification No.)
700 Pilgrim Way
Green Bay, Wisconsin 54304
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b)
of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Share Purchase Rights New York Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g)
of the Act:
None
(Title of Class)
<PAGE>
Item 1. Description of Registrant's Securities to be
Registered.
On September 24, 1997, the Board of Directors
approved the amendment and restatement of the Rights
Agreement (as so amended and restated, the "Rights
Agreement") with Norwest Bank Minnesota, N.A., as agent
(the "Rights Agent"), dated as of July 3, 1992. Under
the Rights Agreement, a dividend of one preferred share
purchase right (a "Right") for each outstanding share
of common stock, par value $.01 per share (the "Common
Shares"), of the Company was issued to shareholders of
record on July 2, 1997 (the "Record Date"). The
amendment and restatement increased the Purchase Price
(defined below) from $65.00 to $100.00, lowered the
threshold for a so-called "flip-in" from 30% to 15%,
and extended the Final Expiration Date (as defined
below) from April 15, 2002, to September 23, 2007. The
amendment and restatement was not in response to any
effort to gain control of the Company and the Board is
not aware of any such effort at the current time.
Each Right entitles the holder to purchase from
the Company one one-thousandth of a share of Series B
Junior Participating Preferred Stock, $.01 par value
(the "Preferred Shares") of the Company at a price of
$100.00 per one one-thousandth of a Preferred Share
(the "Purchase Price").
The Rights Agreement provides that the Rights will
not be exercisable until the Distribution Date, which
will be the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the Company's
outstanding Common Shares, or (ii) 10 business days (or
such later date as is established by the Board before
any person or group becomes an Acquiring Person)
following the commencement of, or the announcement of
an intention to make, a tender offer or exchange offer
which, if consummated, would result in the beneficial
ownership by a person or group of 15% or more of the
Company's outstanding Common Shares.
Until the Distribution Date (or the earlier
redemption or expiration of the Rights), the Rights
will be transferred with, and only with, the Common
Shares. For Common Shares outstanding as of July 2,
1997, the Rights will be evidenced by the certificates
for such Common Shares. For Common Shares issued
thereafter, the Rights will be evidenced by a notation
on the certificate incorporating the Rights Agreement
by reference. In either case, until the Distribution
Date (or the earlier redemption or expiration of the
Rights), the surrender for transfer of any certificate
for Common Shares will constitute the transfer of the
Rights associated with the Common Shares represented by
the certificate. As soon as practicable after the
Distribution Date, separate certificates evidencing the
Rights ("`Right Certificates") will be mailed to
holders of record of the Common Shares as of the close
of business on the Distribution Date, and thereafter
such separate Right Certificates alone will evidence
the Rights.
If any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a
Right (other than the Acquiring Person, whose Rights
will have become void) will be entitled, upon the
exercise of the Right, to receive that number of Common
Shares having
<PAGE>
a market value of two times the exercise
price of the Right. In addition, if, after a person or
group has become an Acquiring Person, the Company is
acquired in a merger or other business combination
transaction or if 50% or more of its consolidated
assets or earning power are sold, each holder of a
Right will be entitled to receive, upon the exercise of
the Right at its then current exercise price, that
number of shares of common stock of the acquiring
company having a market value at the time of such event
of two times the exercise price of the Right.
At any time before an Acquiring Person acquires
beneficial ownership of 15% or more of the Company's
outstanding Common Shares, the Board may redeem the
Rights in whole, but not in part, at a price of $.01
per Right, on such terms as the Board may establish in
its sole discretion. Immediately upon any redemption
of the Rights, the right to exercise the Rights will
terminate and the holders will be entitled only to
receive the foregoing redemption price.
At any time after any person or group becomes an
Acquiring Person, but before the Acquiring Person
acquires 50% or more of the Company's outstanding
Common Shares, the Board may exchange the Rights (other
than those held by the Acquiring Person, which will
have become void), in whole or part, at an exchange
ratio of one Common Share or one one-thousandth of a
Preferred Share (or of a share of a class or series of
the Company's preferred stock having equivalent rights,
preferences and privileges) per Right.
The number of outstanding Rights and the number of
one one-thousandths of a Preferred Share issuable upon
exercise of each Right are subject to adjustment if,
prior to the Distribution Date, there is a stock split
of the Common Shares; a stock dividend on the Common
Shares payable in Common Shares; or a subdivision,
consolidation or combination of the Common Shares.
The Purchase Price and the number of Preferred
Shares or other securities or property issuable upon
exercise of the Rights are also subject to adjustment
to prevent dilution: in the event of a stock dividend
or of a subdivision, combination or reclassification of
the Preferred Shares; upon the grant to the Preferred
Share holders of certain rights or warrants to
subscribe for or purchase Preferred Shares at a price
less than the then-current market price or securities
convertible into Preferred Shares with a conversion
price less than the then-current market price for the
Preferred Shares; or upon the distribution to the
Preferred Share holders of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid
out of earnings or retained earnings or dividends
payable in Preferred Shares) 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 require
an adjustment of at least 1% in such Purchase Price.
The holder of a Right, as such, will have no
rights as a shareholder of the Company (including,
without limitation, the right to vote or to receive
dividends) until the Right is exercised. The terms of
the Rights may be amended by the Board without the
consent of the holders of the Rights, provided that no
amendment adversely affects the interests of the
holders.
<PAGE>
If not exercised, redeemed or exchanged sooner,
the Rights will expire on September 23, 2007 (the
"Final Expiration Date"), unless such expiration date
is extended.
The Company's Articles of Incorporation set forth
the terms of the Preferred Shares. If issued, the
Preferred Shares will be entitled to a cumulative
preferential quarterly dividend per share equal to the
greater of $10 or 1,000 times the dividend declared on
the Company's Common Shares. In the event of
liquidation, the holders of the Preferred Shares will
be entitled to receive an amount equal to accrued and
unpaid dividends, plus an amount per share equal to the
greater of $1,000 or 1,000 times the payment made per
share to holders of Common Shares. Each Preferred
Share will be entitled to 1,000 votes, voting together
with the holders of the Common Shares on all matters
submitted to the vote of shareholders. In the event of
any merger, consolidation or other transaction in which
Common Shares are exchanged, the holder of each
Preferred Share will be entitled to receive 1,000 times
the amount and type of consideration paid per Common
Share. The rights of the holders of Preferred Shares
as to dividends and liquidations, their voting rights,
and their rights in the event of mergers and
consolidations, are protected by customary anti-
dilution provisions.
Because of the nature of the Preferred Shares'
dividend, liquidation and voting rights, the value of
the one one-thousandth of a Preferred Share purchasable
upon the exercise of each Right should approximate the
value of one Common Share.
No fractional Preferred Shares will be issued
(other than fractions which are integral multiples of
one one-thousandth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of
exercise.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to
this Amendment No. 1 to Registration Statement on Form
8-A. A copy of the Rights Agreement is available free
of charge from the Company. 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 hereby incorporated herein by
reference.
Item 2. Exhibits.
Exhibit No. Description
(1) Rights Agreement between ShopKo Stores, Inc.
and Norwest Bank Minnesota, N.A. dated as of July
3, 1992, as amended and restated as of September
24, 1997 (including the Form of Certification of
Designation, Preferences and Rights of Series B
Junior Participating Preferred Stock and Form of
Rights Certificate).
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has
duly caused this amendment to registration statement to
be signed on its behalf by the undersigned, thereunto
duly authorized.
SHOPKO STORES, INC.
By: /s/ Richard D. Schepp
-------------------------
Richard D. Schepp
Vice President Legal Affairs
Date: September 29, 1997.
RIGHTS AGREEMENT
BY AND BETWEEN
SHOPKO STORES, INC.
AND
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
RIGHTS AGENT
DATED AS OF JULY 3, 1992
AMENDED AND RESTATED AS OF SEPTEMBER 24, 1997
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent. 6
Section 3. Issue of Right Certificates. 6
Section 4. Form of Right Certificates. 8
Section 5. Countersignature and Registration. 8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. 9
Section 8. Cancellation and Destruction of Right Certificates. 11
Section 9. Availability of Preferred Shares. 11
Section 10. Preferred Shares Record Date. 12
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. 12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. 22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. 23
Section 14. Fractional Rights and Fractional Shares. 24
Section 15. Rights of Action 26
Section 16. Agreement of Right Holders. 26
Section 17. Right Certificate Holder Not Deemed a Shareholder. 27
Section 18. Concerning the Rights Agent. 27
Section 19. Merger or Consolidation or Change of Name of Rights Agent. 28
Section 20. Duties of Rights Agent. 29
Section 21. Change of Rights Agent 31
Section 22. Issuance of New Right Certificates 32
Section 23. Redemption 32
Section 24. Exchange 33
Section 25. Notice of Certain Events 34
<PAGE>
Section 26. Notices 36
Section 27. Supplements and Amendments 36
Section 28. Successors 37
Section 29. Benefits of This Agreement 37
Section 30. Severability 37
Section 31. Governing Law 37
Section 32. Counterparts 38
Section 33. Descriptive Headings 38
Signatures 39
Exhibit A Form of Certificate of Designations of Preferred Shares 40
Exhibit B Form of Right Certificate 47
Exhibit C Summary of Rights to Purchase Preferred Shares 53
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT ("Agreement"), dated as of
July 3, 1992, and amended and restated as of September
24, 1997, is made between SHOPKO STORES, INC., a
Minnesota corporation (the "Company"), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION (the "Rights Agent").
WHEREAS, the Board of Directors of the Company
(the "Board") has authorized and declared a dividend of
one preferred share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company
outstanding on the Record Date (as hereinafter
defined), each Right representing the right to purchase
one one-thousandth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions
herein set forth, and has further authorized and
directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as
such terms are hereinafter defined);
WHEREAS, the Board has determined to amend this
Agreement in several respects in accordance with
Section 27 hereof and to implement such amendments by
executing this Agreement as amended and restated;
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties
hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or
which, together with all Affiliates and
Associates (as such terms are hereinafter
defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter
defined) of 15% or more of the Common Shares
of the Company then outstanding, but shall
not include the Company, any Subsidiary (as
such term is hereinafter defined) of the
Company, any employee benefit plan of the
Company or of any Subsidiary of the Company,
or any entity holding Common Shares for or
pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as the
result of an acquisition of Common Shares by
the Company which, by reducing the number of
shares outstanding, increases the
proportionate number of shares beneficially
owned by such Person to 15% or more of the
Common Shares of the Company then
outstanding; provided, however, that if a
Person shall become the Beneficial Owner of
15% or more of the Common Shares of the
Company then outstanding by reason of share
purchases by the Company and shall, after
such share purchases by the Company, become
the Beneficial Owner of any additional Common
Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board
determines in good faith that a Person who
would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions
of this Section 1(a), has become such
inadvertently, and without any plan or
intention to seek or affect control of the
Company, and such Person divests as promptly
as practicable (without exercising or
retaining any power, including voting, with
respect to such shares) a sufficient number
of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this
Section 1(a), then such Person shall not be
deemed to be an "Acquiring Person" for any
purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(c) A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such
Person's Affiliates or Associates
beneficially owns, directly or
indirectly
(ii) which such Person or any of such
Person's Affiliates or Associates has:
(A) the right to acquire (whether such
right is exercisable immediately or
only after the passage of time)
pursuant to any agreement,
arrangement or understanding (other
than customary agreements with and
between underwriters and selling
group members with respect to a
bona fide public offering of
securities), or upon the exercise
of conversion rights, exchange
rights, rights (other than these
Rights), warrants or options, or
otherwise; provided, however, that
a Person shall not be deemed the
Beneficial Owner of, or to
beneficially own, securities
tendered pursuant to a tender or
exchange offer made by or on behalf
of such Person or any of such
Person's Affiliates or Associates
until such tendered securities are
accepted for purchase or exchange;
or
(B) the right to vote pursuant to any
agreement, arrangement or
understanding; provided, however,
that a Person shall not be deemed
the Beneficial Owner of, or to
beneficially own, any security if
the agreement, arrangement or
understanding to vote such security
(1) arises solely from a revocable
proxy or consent given to such
Person in response to a public
proxy or consent solicitation made
pursuant to, and in accordance
with, the applicable rules and
regulations promulgated under the
Exchange Act and (2) is not also
then reportable on Schedule 13D
under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned,
directly or indirectly, by any other
Person with which such Person or any of
such Person's Affiliates or Associates
has any agreement, arrangement or
understanding (other than customary
agreements with and between underwriters
and selling group members with respect
to a bona fide public offering of
securities) for the purpose of
acquiring, holding, voting (except to
the extent contemplated by the proviso
to Section 1(c)(ii)(B)) or disposing of
any securities of the Company.
Notwithstanding anything in this definition
of Beneficial Ownership to the contrary, the
phrase "then outstanding," when used with
reference to a Person's Beneficial Ownership
of securities of the Company, shall mean the
number of such securities then issued and
outstanding together with the number of such
securities not then actually issued and
outstanding which such Person would be deemed
to own beneficially hereunder.
(d) "Business Day" shall mean any day other than
a Saturday, Sunday, or a day on which banking
institutions in Wisconsin are authorized or
obligated by law or executive order to close.
(e) "Close of business" on any given date shall
mean 5:00 P.M., Green Bay, Wisconsin time, on
such date; provided, however, that if such
date is not a Business Day it shall mean 5:00
P.M., Green Bay, Wisconsin time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to
the Company shall mean the shares of common
stock, $.01 par value per share, of the
Company. "Common Shares" when used with
reference to any Person other than the
Company, shall mean the capital stock (or
equity interest) with the greatest voting
power of such other Person or, if such other
Person is a Subsidiary of another Person, the
Person or Persons which ultimately control
such first-mentioned Person.
(g) "Distribution Date" shall mean the earlier of
(i) the tenth day after the Shares
Acquisition Date (as such term is hereinafter
defined), or (ii) the tenth business day (or
such later date as may be determined by
action of the Board prior to such time as any
Person becomes an Acquiring Person) after the
date of the commencement by any Person (other
than the Company, any Subsidiary of the
Company, any employee benefit plan of the
Company or of any Subsidiary of the Company
or any entity holding Common Shares for or
pursuant to the terms of any such plan) of,
or the first public announcement of the
intention of any Person (other than the
Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of
any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the
terms of any such plan) to commence, a tender
or exchange offer the consummation of which
would result in any Person becoming the
Beneficial Owner of Common Shares aggregating
15% or more of the then outstanding Common
Shares (including any such date which is
after the date of this Agreement and prior to
the issuance of the Rights).
(h) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, as in
effect on the date of this Agreement.
(i) "Final Expiration Date" shall mean September
23, 2007.
(j) "NASDAQ" shall mean the National Association
of Securities Dealers, Inc. Automated
Quotations System.
(k) "Person" shall mean any individual, firm,
corporation or other entity, and shall
include any successor (by merger or
otherwise) of such entity.
(l) "Preferred Shares" shall mean shares of
Series B Junior Participating Preferred
Stock, $.01 par value per share, of the
Company having the rights and preferences set
forth in the Form of Certificate of
Designations attached to this Agreement as
Exhibit A.
(m) The "Purchase Price" for each one one-
thousandth of a Preferred Share purchasable
pursuant to the exercise of a Right shall
mean $100.00, subject to adjustment from time
to time as provided in Sections 11 and 13
hereof.
(n) "Record Date" shall mean July 2, 1997.
(o) "Redemption Date" shall mean that date, if
any, on which the Board shall redeem the
Rights as provided in Section 23 hereof.
(p) "Redemption Price" shall mean $.01 per
Right, appropriately adjusted to reflect any
stock split, stock dividend or similar
transaction occurring after the date hereof.
(q) "Right Certificate" shall mean certificates
evidencing ownership of Rights in
substantially the form set out in Exhibit B
hereto.
(r) "Share Exchange" shall mean an exchange
pursuant to section 302A.601 of the Minnesota
Business Corporation Act.
(s) "Shares Acquisition Date" shall mean the
first date of public announcement by the
Company or an Acquiring Person that an
Acquiring Person has become such.
(t) "Subsidiary" of any Person shall mean any
corporation or other entity of which a
majority of the voting power of the voting
equity securities or equity interest is
owned, directly or indirectly, by such
Person.
(u) "Trading Day" shall mean a day on which the
principal national securities exchange on
which a security is listed or admitted to
trading is open for the transaction of
business or, if the security is not listed or
admitted to trading on any national
securities exchange, a Business Day.
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 Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary
or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) The Company sent a copy of a Summary of
Rights to Purchase Preferred Shares, in
substantially the form initially attached as
Exhibit C hereto before this Agreement was
amended and restated ("Summary of Rights"),
by first-class, postage-prepaid mail, to each
record holder of Common Shares as of the
close of business on the Record Date, at the
address of such holder shown on the records
of the Company. The Summary of Rights
attached hereto as Exhibit C is revised to
reflect all amendments effective as of the
date of this Agreement as amended and
restated. The revised Summary of Rights need
not be mailed to shareholders.
(b) The Company issued one Right for each Common
Share outstanding as of the Record Date.
With respect to certificates for Common
Shares outstanding as of the Record Date,
until the Distribution Date, the Rights shall
be evidenced by such certificates registered
in the names of the holders thereof (which
certificates shall also be deemed to be Right
Certificates) and the right to receive Right
Certificates shall be transferable only in
connection with the transfer of Common
Shares. Until the Distribution Date (or the
earlier of the Redemption Date or Final
Expiration Date), the surrender for transfer
of any certificate for Common Shares
outstanding on the Record Date, shall also
constitute the transfer of the Rights
associated with the Common Shares represented
thereby, and certificates newly issued
pursuant to such transfer shall have printed
onto them the legend set forth in Section
3(c).
(c) Rights shall be issued in respect of all
Common Shares which are issued after the
Record Date, but prior to the earliest of the
Distribution Date, the Redemption Date or the
Final Expiration Date. Certificates
representing such Common Shares shall also be
deemed to represent the related Rights.
After the Record Date, certificates
representing Common Shares have a legend as
initially set forth in this Agreement and,
commencing as soon as reasonably practicable
following the date of this Amended and
Restated Agreement, shall have impressed on,
printed on, written on, or otherwise affixed
to them the following legend:
"This certificate also evidences and
entitles the holder hereof to certain
rights as set forth in a Rights Agreement
between ShopKo Stores, Inc. and Norwest
Bank Minnesota, National Association, as
amended and restated as of September 24,
1997 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by
reference and a copy of which is on file
at the principal executive offices of
ShopKo Stores, Inc. Under certain
circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced
by separate certificates and shall no
longer be evidenced by this certificate.
ShopKo Stores, Inc. shall mail to the
holder of this certificate a copy of the
Rights Agreement without charge after
receipt of a written request therefor.
Under certain circumstances, as set forth
in the Rights Agreement, Rights issued to
any Person who becomes an Acquiring Person
or any Associate or Affiliate of an
Acquiring Person (as such terms are
defined in the Rights Agreement) (or
nominee of any of them) may become null
and void."
With respect to such certificates containing
the foregoing legend, until the Distribution
Date, the Rights associated with the Common
Shares represented by such certificates shall
be evidenced by such certificates alone, and
the surrender for transfer of any such
certificate shall also constitute the
transfer of the Rights associated with the
Common Shares represented thereby. In the
event that the Company purchases or acquires
any Common Shares after the Record Date, but
prior to the Distribution Date, any Rights
associated with such Common Shares shall be
deemed canceled and retired so that the
Company shall not be entitled to exercise any
Rights associated with the Common Shares
which are no longer outstanding.
(d) As soon as practicable after the Distribution
Date, the Company shall prepare and execute,
the Rights Agent shall countersign, and the
Company shall send or cause to be sent (and
the Rights Agent shall, if requested, send)
by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares
as of the close of business on the
Distribution Date, at the address of such
holder shown on the records of the Company, a
Right Certificate evidencing one Right for
each Common Share so held. As of the
Distribution Date, the Rights shall be
evidenced solely by such Right Certificates.
SECTION 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the forms of election
to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially
the same as Exhibit B hereto and may have such marks of
identification or designation and such legends,
summaries or endorsements printed thereon as the
Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or
as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section
22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-
thousandths of a Preferred Share as shall be set forth
therein at the Purchase Price set forth therein, but
the number of such one one-thousandths of a Preferred
Share and the Purchase Price shall be subject to
adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
The Right Certificates shall be executed on behalf
of the Company by any of its Chairman of the Board, its
President, or any Vice President, and attested by any
of its by Secretary or any Assistant Secretary, either
manually or by facsimile signature. The Right
Certificates shall not be valid for any purpose unless
countersigned by the Rights Agent. In case any officer
of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered by the Company
with the same force and effect as though the person who
signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate
may be signed on behalf of the Company by any person
who holds any such office at the actual date of the
execution of such Right Certificate, although at the
date of the execution of this Rights Agreement such
person was not such an officer.
Following the Distribution Date, the Rights Agent
shall keep or cause to be kept, at its shareholder
services offices, books for registration and transfer
of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right
Certificates, and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND
EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED,
LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Section 14 hereof, at
any time after the close of business on the
Distribution Date and at or prior to the close of
business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right
Certificates (other than Right Certificates
representing Rights that have become void pursuant to
Section 11(a)(ii) hereof or that have been exchanged
pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right
Certificate or other Right Certificates, entitling the
registered holder to purchase a like number of one one-
thousandths of a Preferred Share as the Right
Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates
shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto
a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of
Right Certificates.
Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the
Right Certificate if mutilated, the Company shall make
and deliver a new Right Certificate of like tenor to
the Rights Agent for delivery to the registered holder
in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any Right
Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein)
in whole or in part at any time after the
Distribution Date upon surrender of the Right
Certificate (with the form of election to
purchase on the reverse side thereof duly
executed) to the Rights Agent at the
principal office of the Rights Agent,
together with payment of the Purchase Price
for each one one-thousandth of a Preferred
Share as to which the Rights are exercised,
at or prior to the earliest of
(i) the close of business on the Final
Expiration Date,
(ii) the Redemption Date, or
(iii) the time at which such Rights are
exchanged as provided in Section 24
hereof.
(b) The Purchase Price shall be payable in lawful
money of the United States of America in
accordance with Section 7(c).
(c) Upon receipt of a Right Certificate
representing exercisable Rights (with the
form of election to purchase duly executed),
accompanied by payment (by certified check,
cashier's check, or money order payable to
the order of the Company) of the Purchase
Price for the shares to be purchased and an
amount equal to any applicable transfer tax
required to be paid by the holder of such
Right Certificate in accordance with Section
9 hereof, the Rights Agent shall thereupon
promptly
(i) (A) requisition from any transfer
agent of the Preferred Shares
certificates for the number of
Preferred Shares to be purchased,
and the Company hereby irrevocably
authorizes its transfer agent to
comply with all such requests, or
(B) requisition from the depositary
agent depositary receipts
representing such number of one one-
thousandths of a Preferred Share as
are to be purchased (in which case
certificates for the Preferred
Shares represented by such receipts
shall be deposited by the transfer
agent with the depositary agent)
and the Company hereby directs the
depositary agent to comply with
such request; and
(ii) when appropriate, requisition from the
Company the amount of cash to be paid in
lieu of issuance of fractional shares in
accordance with Section 14 hereof; and
(iii) promptly after receipt of such
certificates or depositary receipts,
cause the same to be delivered to or
upon the order of the registered holder
of such Right Certificate, registered in
such name or names as may be designated
by such holder; and
(iv) when appropriate, after receipt,
promptly deliver such cash to or upon
the order of the registered holder of
such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the
Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be
issued by the Rights Agent to the registered
holder of such Right Certificate or to his
duly authorized assigns, subject to the
provisions of Section 14 hereof.
SECTION 8. CANCELLATION AND DESTRUCTION OF
RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this
Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to
the Company, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and
in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. AVAILABILITY OF PREFERRED SHARES.
The Company covenants and agrees that it shall
cause to be reserved and kept available out of its
authorized and unissued Preferred Shares, the number of
Preferred Shares that shall be sufficient to permit the
exercise in full of all outstanding Rights in
accordance with Section 7 hereof.
The Company covenants and agrees that it shall
take all such actions as may be necessary to ensure
that all Preferred Shares delivered upon exercise of
the Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to
payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable
shares, except as otherwise provided by Section
180.0622(2)(b) of the Wisconsin Statutes and judicial
interpretations thereof.
The Company covenants and agrees that it shall pay
when due and payable any and all federal and state
transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares upon the
exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the
Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing
Rights surrendered for exercise, or to issue or to
deliver any certificates or depositary receipts for
Preferred Shares upon the exercise of any Rights until
any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax
is due.
SECTION 10. PREFERRED SHARES RECORD DATE.
Each person in whose name any certificate for
Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the
holder of record of the Preferred Shares represented
thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such
Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender
and payment is a date upon which the Preferred Shares
transfer books of the Company are closed, such person
shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred
Shares transfer books of the Company are open.
Prior to the issuance of Preferred Shares upon the
exercise of the Rights evidenced thereby, the holder of
a Right Certificate shall not be entitled to any rights
of a holder of Preferred 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 OF SHARES OR NUMBER OF RIGHTS.
The Purchase Price, the number of Preferred Shares
covered by each Right, and the number of Rights
outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at
any time after the date of this
Agreement
(A) declare a dividend on the Preferred
Shares payable in Preferred Shares,
(B) subdivide the outstanding Preferred
Shares,
(C) combine the outstanding Preferred
Shares into a smaller number of
Preferred Shares, or
(D) issue any shares of its capital
stock in a reclassification of the
Preferred Shares (including any
such reclassification in connection
with a consolidation or merger in
which the Company is the continuing
or surviving corporation), except
as otherwise provided in this
Section 11(a), the Purchase Price
in effect at the time of the record
date for such dividend or of the
effective date of such subdivision,
combination or reclassification,
and the number and kind of shares
of capital stock issuable on such
date, shall be proportionately
adjusted so that the holder of any
Right exercised after such time
shall be entitled to receive the
aggregate number and kind of shares
of capital stock which, if such
Right had been exercised
immediately prior to such date and
at a time when the Preferred Shares
transfer books of the Company were
open, the holder would have owned
upon such exercise and been
entitled to receive by virtue of
such dividend, subdivision,
combination or reclassification;
provided, however, that in no event
shall the consideration to be paid
upon the exercise of one Right be
less than the aggregate par value
of the shares of capital stock of
the Company issuable upon exercise
of one Right. If an event occurs
which would require an adjustment
under both Section 11(a)(i) and
Section 11(a)(ii), 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).
(ii) Subject to Section 24 of this
Agreement, in the event any Person
becomes an Acquiring Person, each holder
of a Right shall thereafter have a right
to receive, upon exercise thereof at a
price equal to the then current Purchase
Price multiplied by the number of one
one-thousandths of a Preferred Share for
which a Right is then exercisable, in
accordance with the terms of this
Agreement and in lieu of Preferred
Shares, such number of Common Shares of
the Company as shall equal the result
obtained by multiplying
(A) the then current Purchase Price by
the number of one one-thousandths
of a Preferred Share for which a
Right is then exercisable and
dividing that product by
(B) 50% of the then current per share
market price of the Company's
Common Shares (determined pursuant
to Section 11(d) hereof) on the
date of the occurrence of such
event.
In the event that any Person shall
become an Acquiring Person and the
Rights shall then be outstanding, the
Company shall not take any action which
would eliminate or diminish the benefits
intended to be afforded by the Rights.
From and after the occurrence of such
event, any Rights that are or were
acquired or beneficially owned by any
Acquiring Person (or any Associate or
Affiliate thereof, or nominee of any of
them) shall be void and any holder of
such Rights shall thereafter have no
right to exercise such Rights under any
provision of this Agreement. No Right
Certificate shall be issued pursuant to
Section 3 hereof or otherwise that
represents Rights beneficially owned by
an Acquiring Person whose Rights would
be void pursuant to the preceding
sentence (or any Associate or Affiliate
thereof, or nominee of any of them); no
Right Certificate shall be issued at any
time upon the transfer of any Rights to
an Acquiring Person whose Rights would
be void pursuant to the preceding
sentence (or any Associate or Affiliate
thereof or any nominee of any of them);
and any Right Certificate delivered to
the Rights Agent for transfer to an
Acquiring Person whose Rights would be
void pursuant to the preceding sentence
(or any Associate or Affiliate thereof,
or nominee of any of them) shall be
canceled. In addition, any Right
Certificate issued pursuant to Section 3
hereof that represents Rights
beneficially owned by an Acquiring
Person (or any Associate or Affiliate
thereof, or nominee of any of them) and
any Right Certificate issued at any time
upon the transfer of any Rights to an
Acquiring Person (or any Associate or
Affiliate thereof, or nominee of any of
them) and any Right Certificate issued
pursuant to Sections 6, 7(d), 11, or 22
hereof upon transfer, exchange,
replacement or adjustment of any other
Right Certificate referred to in this
sentence, shall contain the following
legend:
"The Rights represented by this
Right Certificate were issued to a
Person who was an Acquiring Person
or an Affiliate or an Associate of
an Acquiring Person (as such terms
are described in the Rights
Agreement) or a nominee of one of
them. This Right Certificate and
the Rights represented hereby may
become void in the circumstances
specified in the Rights Agreement."
(iii) In the event that there shall
not be sufficient Common Shares issued
but not outstanding or authorized but
unissued to permit the exercise in full
of the Rights in accordance with the
foregoing Section 11(a)(ii), the Company
shall take all such actions as may be
necessary to authorize additional Common
Shares for issuance upon exercise of the
Rights. In the event the Company, after
good faith effort, shall be unable to
take all such actions as may be
necessary to authorize such additional
Common Shares, the Company shall
substitute, for each Common Share that
would otherwise be issuable upon
exercise of a Right, a number of
Preferred Shares or fraction thereof
such that the current per share market
price of one Preferred Share multiplied
by such number or fraction is equal to
the current per share market price of
one Common Share as of the date of
issuance of such Preferred Shares or
fraction thereof.
(b) In case the Company shall fix a record date
for the issuance of rights, options or
warrants to all holders of Preferred Shares
entitling them (for a period expiring within
45 calendar days after such record date) to
subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges
and preferences as the Preferred Shares
("Equivalent Preferred Shares")) or
securities convertible into Preferred Shares
or Equivalent Preferred Shares at a price per
share (or having a conversion price per
share, if a security convertible into
Preferred Shares or Equivalent Preferred
Shares) less than the then current per share
market price of the Preferred Shares on such
record date, the Purchase Price to be in
effect after such record date shall be
determined by multiplying the Purchase Price
in effect immediately prior to such record
date by a fraction, the numerator of which
shall be the number of Preferred Shares
outstanding on such record date plus the
number of Preferred Shares which the
aggregate offering price of the total number
of Preferred Shares and/or Equivalent
Preferred Shares so to be offered (and/or the
aggregate initial conversion price of the
convertible securities so to be offered)
would purchase at such current market price
and the denominator of which shall be the
number of Preferred Shares outstanding on
such record date plus the number of
additional Preferred Shares and/or Equivalent
Preferred Shares to be offered for
subscription or purchase (or into which the
convertible securities so to be offered are
initially convertible); provided, however,
that in no event shall the consideration to
be paid upon the exercise of one Right be
less than the aggregate par value of the
shares of capital stock of the Company
issuable upon the exercise of one Right. In
case such subscription price may be paid in a
consideration part or all of which shall be
in a form other than cash, the value of such
consideration shall be 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 holders of the Rights.
Preferred Shares owned by or held for the
account of the Company shall not be deemed
outstanding for the purpose of any such
computation.
Such adjustment shall be made successively
whenever such a record date is fixed; and in
the event that such rights, options or
warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase
Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date
for the making of a distribution to all
holders of the Preferred Shares (including
any such distribution made in connection with
a consolidation or merger in which the
Company is the continuing or surviving
corporation) of evidences of indebtedness or
assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred
Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect
after such record date shall be determined by
multiplying the Purchase Price in effect
immediately prior to such record date by a
fraction, the numerator of which shall be the
then current per share market price of the
Preferred Shares 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 and holders of the Rights) of
the portion of the assets or evidences of
indebtedness so to be distributed or of such
subscription rights or warrants applicable to
one Preferred Share and the denominator of
which shall be such current per share market
price of the Preferred Shares; provided,
however, that in no event shall the
consideration to be paid upon the exercise of
one Right be less than the aggregate par
value of the shares of capital stock of the
Company to be issued upon the exercise of one
Right.
Such adjustments shall be made successively
whenever such a record date is fixed; and in
the event that such distribution is not so
made, the Purchase Price shall again be
adjusted to be the Purchase Price which would
then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation
hereunder, the "current per share market
price" of any security (a "Security" for
the purpose of this Section 11(d)(i)) on
any date shall be deemed to be the
average of the daily closing prices per
share of such Security for the 30
consecutive Trading Days immediately
prior to such date; provided, however,
that in the event that the current per
share market price of the Security is
determined during a period following the
announcement by the issuer of such
Security of a dividend or distribution
on such Security payable in shares of
such Security or securities convertible
into such shares, or any subdivision,
combination or reclassification of such
Security, and prior to the expiration of
30 Trading Days after the ex-dividend
date for such dividend or distribution,
or the record date for such subdivision,
combination or reclassification, then,
and in each such case, the current per
share market price shall be
appropriately adjusted to reflect the
current market price per share
equivalent of such Security. The closing
price for each day shall be
(A) the last sale price, regular way,
or, in case no such sale takes
place on such day, the average of
the closing bid and asked prices,
regular way, in either case as
reported in the principal
consolidated transaction reporting
system with respect to securities
listed or admitted to trading on
the New York Stock Exchange or,
(B) if the Security is not listed or
admitted to trading on the New York
Stock Exchange, as reported in the
principal consolidated transaction
reporting system with respect to
securities listed on the principal
national securities exchange on
which the Security is listed or
admitted to trading or,
(C) if the Security is not listed or
admitted to trading on any national
securities exchange, the last
quoted price or, if not so quoted,
the average of the high bid and low
asked prices in the over-the-
counter market, as reported by
NASDAQ or such other system then in
use, or,
(D) if the Security is not quoted by
any such organization, the average
of the closing bid and asked prices
as furnished by a professional
market maker making a market in the
Security selected by the Board.
(ii) For the purpose of any computation
hereunder, the "current per share market
price" of the Preferred Shares shall be
determined in accordance with the method
set forth in Section 11(d)(i). If the
Preferred Shares are not publicly
traded, the "current per share market
price" of the Preferred Shares shall be
conclusively deemed to be the current
per share market price of the Common
Shares as determined pursuant to Section
11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend
or similar transaction occurring after
the date hereof), multiplied by one
thousand. If neither the Common Shares
nor the Preferred Shares are publicly
held or so listed or traded, "current
per share market price" shall mean the
fair value per share as determined in
good faith by the Board, whose
determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require
an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any
adjustments which by reason of this Section
11(e) are not required to be made shall be
carried forward and taken into account in any
subsequent adjustment. All calculations
under this Section 11 shall be made to the
nearest cent or to the nearest one ten-
millionth of a Preferred Share or one ten-
thousandth of any other share or security as
the case may be. Notwithstanding the first
sentence of this Section 11(e), any
adjustment required by this Section 11 shall
be made no later than the earlier of (i)
three years from the date of the transaction
which requires such adjustment or (ii) the
date of the expiration of the right to
exercise any Rights.
(f) If, as a result of an adjustment made
pursuant to Section 11(a) hereof, the holder
of any Right thereafter exercised shall
become entitled to receive any shares of
capital stock of the Company other than
Preferred Shares, thereafter the number of
such other shares so receivable upon exercise
of any Right shall be subject to adjustment
from time to time in a manner and on terms as
nearly equivalent as practicable to the
provisions with respect to the Preferred
Shares contained in Sections 11(a) through
(c), inclusive, and the provisions of
Sections 7, 9, 10 and 13 hereof with respect
to the Preferred Shares shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase
Price, the number of one one-thousandths of a
Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all
subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), 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 Preferred Share (calculated to the nearest
one ten-millionth of a Preferred Share)
obtained by
(i) multiplying the number of one one-
thousandths of a share covered by a
Right immediately prior to this
adjustment by the Purchase Price in
effect immediately prior to such
adjustment of the Purchase Price and
(ii) dividing the product so obtained by the
Purchase Price in effect immediately
after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to
adjust the number of Rights, in substitution
for any adjustment in the number of one one-
thousandths of a Preferred Share purchasable
upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of
the number of Rights shall be exercisable for
the number of one one-thousandths of a
Preferred Share for which a Right was
exercisable immediately prior to such
adjustment. Each Right held of record prior
to such adjustment of the number of Rights
shall become that number of Rights
(calculated to the nearest one ten-
thousandth) obtained by dividing the Purchase
Price in effect immediately prior to
adjustment of the Purchase Price by the
Purchase Price in effect immediately after
adjustment of the Purchase Price. The
Company shall make a public announcement of
its election to adjust the number of Rights,
indicating the record date for the
adjustment, and, if known at the time, the
amount of the adjustment to be made. This
record date may be the date on which the
Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days
later than the date of the public
announcement.
If Right Certificates have been issued, upon
each adjustment of the number of Rights
pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to
be distributed to holders of record of Right
Certificates on such record date Right
Certificates evidencing, subject to Section
14 hereof, the additional Rights to which
such holders shall be entitled as a result of
such adjustment, or, at the option of the
Company, shall cause to be distributed to
such holders of record in substitution and
replacement for the Right Certificates held
by such holders prior to the date of
adjustment, and upon surrender thereof, if
required by the Company, new Right
Certificates evidencing all the Rights to
which such holders shall be entitled after
such adjustment. Right Certificates so to be
distributed shall be issued, executed and
countersigned in the manner provided for
herein and shall be registered in the names
of the holders of record of Right
Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-
thousandths of a Preferred Share issuable
upon the exercise of the Rights, the Right
Certificates theretofore and thereafter
issued may continue to express the Purchase
Price and the number of one one-thousandths
of a Preferred Share which were expressed in
the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below
one one-thousandth of the then par value, if
any, of the Preferred Shares issuable upon
exercise of the Rights, the Company shall
take any corporate actions which may, in the
opinion of its counsel, be necessary in order
that the Company may validly and legally
issue fully paid and nonassessable (except as
provided by Section 180.0622(2)(b) of the
Wisconsin Statutes and judicial
interpretations thereof) Preferred Shares at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase
Price be made effective as of a record date
for a specified event, the Company may elect
to defer until the occurrence of such event
the issuing to the holder of any Right
exercised after such record date of the
Preferred Shares and other capital stock or
securities of the Company, if any, issuable
upon such exercise over and above the
Preferred Shares 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 upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be
entitled to make such reductions in the
Purchase Price, in addition to those
adjustments expressly required by this
Section 11, as and to the extent that it in
its sole discretion shall determine to be
advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at
less than the current market price, issuance
wholly for cash of Preferred Shares or
securities which by their terms are
convertible into or exchangeable for
Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares, or
issuance of rights, options or warrants
referred to herein above in Section 11(b),
hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to
such shareholders.
(n) In the event that at any time after the date
of this Agreement and prior to the
Distribution Date, the Company shall
(i) declare or pay any dividend on the
Common Shares payable in Common Shares,
or
(ii) effect a subdivision, combination or
consolidation of the Common Shares (by
reclassification or otherwise than by
payment of dividends in Common Shares)
into a greater or lesser number of
Common Shares,
then in any such case,
(A) the number of one one-thousandths
of a Preferred Share purchasable
after such event upon proper
exercise of each Right shall be
determined by multiplying the
number of one one-thousandths of a
Preferred Share so purchasable
immediately prior to such event by
a fraction, the numerator of which
is the number of Common Shares
outstanding immediately before such
event and the denominator of which
is the number of Common Shares
outstanding immediately after such
event, and
(B) each Common Share outstanding
immediately after such event shall
have issued with respect to it that
number of Rights which each Common
Share outstanding immediately prior
to such event had issued with
respect to it.
The adjustments provided for in this
Section 11(n) shall be made successively
whenever such a dividend is declared or paid
or such a subdivision, combination or
consolidation is effected. If an event
occurs which would require an adjustment
under Section 11(a)(ii) and this Section
11(n), the adjustments provided for in this
Section 11(n) shall be in addition and prior
to any adjustment required pursuant to
Section 11(a)(ii).
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE
PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such
adjustment, and a brief statement of the
facts accounting for such adjustment,
(b) file with the Rights Agent and with each
transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate,
and
(c) mail a brief summary thereof to each holder
of a Right Certificate in accordance with
Section 25 hereof.
The Rights Agent shall be fully protected in relying on
the terms of any such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER.
In the event, directly or indirectly, at any time
after a Person has become an Acquiring Person,
(a) the Company shall consolidate with, or merge
with and into, any other Person,
(b) any Person shall consolidate with the
Company, or merge with and into the Company
and the Company shall be the continuing or
surviving corporation of such merger and, in
connection with such merger, all or part of
the Common Shares shall be changed into or
exchanged for stock or other securities of
any other Person (or the Company) or cash or
any other property,
(c) the Company shall be a party to a Share
Exchange immediately following which the
Company is a Subsidiary of any other Person,
or
(d) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more
transactions, assets or earning power
aggregating 50% or more of the assets or
earning power of the Company and its
Subsidiaries (taken as a whole) to any other
Person other than the Company or one or more
of its wholly owned Subsidiaries, then, and
in each such case, proper provision shall be
made so that
(i) each holder of a Right (except as
otherwise provided herein) shall
thereafter have the right to receive,
upon the exercise thereof at a price
equal to the then current Purchase Price
multiplied by the number of one-
thousandths of a Preferred Share for
which a Right is then exercisable, in
accordance with the terms of this
Agreement and in lieu of Preferred
Shares, such number of Common Shares of
such other Person (including the Company
as successor thereto or as the surviving
corporation) as shall equal the result
obtained by multiplying the then current
Purchase Price by the number of one-
thousandths of a Preferred Share for
which a Right is then exercisable and
dividing that product by 50% of the then
current per share market price of the
Common Shares of such other Person
(determined pursuant to Section 11(d)
hereof) on the date of consummation of
such consolidation, merger, Share
Exchange, sale or transfer;
(ii) the issuer of such Common Shares shall
thereafter be liable for, and shall
assume, by virtue of such consolidation,
merger, Share Exchange, sale or
transfer, all the obligations and duties
of the Company pursuant to this
Agreement;
(iii) the term "Company" shall thereafter
be deemed to refer to such issuer; and
(iv) such issuer shall take such steps
(including, but not limited to, the
reservation of a sufficient number of
its Common Shares in accordance with
Section 9 hereof) in connection with
such consummation as may be necessary to
assure that the provisions hereof shall
thereafter be applicable, as nearly as
reasonably may be, in relation to the
Common Shares thereafter deliverable
upon the exercise of the Rights.
The Company shall not consummate any such
consolidation, merger, Share Exchange, sale or transfer
unless prior thereto the Company and such issuer shall
have executed and delivered to the Rights Agent a
supplemental agreement so providing.
The Company shall not enter into any transaction
of the kind referred to in this Section 13 if at the
time of such transaction there are any rights,
warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be
afforded by the Rights.
The provisions of this Section 13 shall similarly
apply to successive consolidations, mergers, Share
Exchanges, sales, or other transfers.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL
SHARES.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right
Certificates which evidence fractional
Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders
of the Right Certificates with regard to
which such fractional Rights would otherwise
be issuable, an amount in cash equal to the
same fraction of the current market value of
a whole Right. For the purposes of this
Section 14(a), the current market value of a
whole Right shall be the closing price of the
Rights for the Trading Day immediately prior
to the date on which such fractional Rights
would have been otherwise issuable. The
closing price for any day shall be the last
sale price, regular way, or, in case no such
sale takes place on such day, the average of
the closing bid and asked prices, regular
way, in either case as reported in the
principal consolidated transaction reporting
system with respect to securities listed or
admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock
Exchange, as reported in the principal
consolidated transaction reporting system
with respect to securities listed on the
principal national securities exchange on
which the Rights are listed or admitted to
trading or, if the Rights are not listed or
admitted to trading on any national
securities exchange, the last quoted price
or, if not so quoted, the average of the high
bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such
other system then in use or, if on any such
date the Rights are not quoted by any such
organization, the average of the closing bid
and asked prices as furnished by a
professional market maker making a market in
the Rights selected by the Board. If on any
such date no such market maker is making a
market in the Rights, the fair value of the
Rights on such date as determined in good
faith by the Board shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than
fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon
exercise of the Rights or to distribute
certificates which evidence fractional
Preferred Shares (other than fractions which
are integral multiples of one one-thousandth
of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at
the election of the Company, be evidenced by
depositary receipts, pursuant to an
appropriate agreement between the Company and
a depositary selected by it; provided, that
such agreement shall provide that the holders
of such depositary receipts shall have all
the rights, privileges and preferences to
which they are entitled as beneficial owners
of the Preferred Shares represented by such
depositary receipts. In lieu of fractional
Preferred Shares that are not integral
multiples of one one-thousandth of a
Preferred Share, the Company shall pay to the
registered holders of Right Certificates at
the time such Rights are exercised as herein
provided an amount in cash equal to the same
fraction of the current market value of one
Preferred Share. For the purposes of this
Section 14(b), the current market value of a
Preferred Share shall be the closing price of
a Preferred Share (as determined pursuant to
the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) The holder of a Right, by the acceptance
thereof, expressly waives his right to
receive any fractional Rights or any
fractional shares upon exercise of a Right
(except as provided above).
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered
holders of the Common Shares). Any registered holder
of any Right Certificate (or, prior to the Distribution
Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach
of this Agreement and shall be entitled to specific
performance of the obligations under, and injunctive
relief against actual or threatened violations of the
obligations of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right, by accepting the same,
consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights
shall be transferable only in connection with
the transfer of the Common Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the
registry books of the Rights Agent if
surrendered at the principal office of the
Rights Agent, duly endorsed or accompanied by
a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right
Certificate (or, prior to the Distribution
Date, the Common Shares certificate) is
registered as the absolute owner thereof and
of the Rights evidenced thereby
(notwithstanding any notations of ownership
or writing on the Right Certificate or the
Common Shares certificate made by anyone
other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) any restriction on transfer deemed to be
imposed by this Agreement is valid and
enforceable against the holder and any
transferee of the holder in accordance with
Section 302A.409 of the Minnesota Business
Corporation Act.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED
A SHAREHOLDER.
No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time
be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the
rights of a shareholder of the Company or any right to
vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration
and execution of this Agreement and the exercise and
performance of its duties hereunder.
The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of
this Agreement, including the costs and expenses of
defending against any claim of such liability.
The Rights Agent shall be protected and shall
incur no liability for, or in respect of any action
taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon
any Right Certificate or certificate for the Preferred
Shares or Common Shares or other securities of the
Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to
be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in
Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE
OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it
may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any
corporation succeeding to the stock transfer or
corporate trust powers of the Rights Agent or any
successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part
of any of the parties hereto; provided that such
corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section
21 hereof. In case, at the time such successor Rights
Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name
of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
In case, at any time the name of the Rights Agent
shall be changed and at such time any of the Right
Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right
Certificates so countersigned; and in case, at that
time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its
changed name; and in all such cases, such Right
Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the
following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the
Company), and the opinion of such counsel
shall be full and complete authorization and
protection to the Rights Agent as to any
action taken or omitted by it in good faith
and in accordance with such opinion.
(b) Whenever, in the performance of its duties
under this Agreement, the Rights Agent shall
deem it necessary or desirable that any fact
or matter be proved or established by the
Company prior to taking or suffering any
action hereunder, such fact or matter (unless
other evidence in respect thereof be herein
specifically prescribed) may be deemed to be
conclusively proved and established by a
certificate signed by any one of the Chairman
of the Board, the Chief Executive Officer,
the President, any Vice President, the
Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such
certificate shall be full authorization to
the Rights Agent for any action taken or
suffered in good faith by it under the
provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its
own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or
recitals contained in this Agreement or in
the Right Certificates (except its
countersignature thereof) or be required to
verify the same, but all such statements and
recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of
this Agreement or the execution and delivery
hereof (except the due execution hereof by
the Rights Agent) or in respect of the
validity or execution of any Right
Certificate (except its countersignature
thereof); nor shall it be responsible for any
breach by the Company of any covenant or
condition contained in this Agreement or in
any Right Certificate; nor shall it be
responsible for any change in the
exercisability of the Rights (including the
Rights becoming void pursuant to Section
11(a)(ii) hereof) or any adjustment in the
terms of the Rights (including the manner,
method or amount thereof) provided for in
Sections 3, 11, 13, 23, or 24 hereof, or the
ascertaining of the existence of facts that
would require any such change or adjustment
(except with respect to the exercise of
Rights evidenced by Right Certificates after
actual notice that such change or adjustment
is required); nor shall it by any act
hereunder be deemed to make any
representation or warranty as to the
authorization or reservation of any Preferred
Shares to be issued pursuant to this
Agreement or any Right Certificate or as to
whether any Preferred Shares shall, when
issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it shall perform,
execute, acknowledge and deliver (or cause to
be performed, executed, acknowledged and
delivered) all such further and other acts,
instruments and assurances as may reasonably
be required by the Rights Agent for the
carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect
to the performance of its duties hereunder
from any one of the Chairman of the Board,
the Chief Executive Officer, the President,
any Vice President, the Secretary, Assistant
Secretary or the 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 by it in good faith in
accordance with instructions of any such
officer or for any delay in acting while
waiting for those instructions.
(h) The Rights Agent and any shareholder,
director, officer or employee of the Rights
Agent may buy, sell or deal in any of the
Rights or other securities of the Company, or
become pecuniarily interested in any
transaction in which the Company may be
interested, or contract with or lend money to
the Company, or otherwise act fully and
freely as though it were not Rights Agent
under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any
other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it
or perform any duty hereunder either itself
or by or through its attorneys or agents, and
the Rights Agent shall not be answerable or
accountable for any act, default, neglect or
misconduct of any such attorneys or agents or
for any loss to the Company resulting from
any such act, default, neglect or misconduct,
provided reasonable care was exercised in the
selection and continued employment thereof.
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 Shares
or Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first-
class mail.
The Company may remove the Rights Agent or any
successor Rights Agent upon 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 Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right
Certificates by first-class mail.
If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal
or after it has been notified in writing of such
resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may
apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and
doing business under the laws of the United States or
of the State of Wisconsin (or of any other state of the
United States so long as such corporation is authorized
to do business as a banking institution in the State of
Wisconsin), in good standing, having an office in the
State of Minnesota or Wisconsin, which is authorized
under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or
examination by federal or state authority and which has
at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million.
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. 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 Shares or
Preferred Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this
Agreement or of the Rights Certificates to the
contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment
or change in the Purchase Price and the number or kind
or class of shares or other securities or property
purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
SECTION 23. REDEMPTION.
(a) The Board may, at its option, at any time
prior to such time as any Person becomes an
Acquiring Person, redeem all but not less
than all of the then outstanding Rights at
the Redemption Price; provided, however, that
in connection with a transaction to be
accounted for as a pooling of interests, the
Board shall have the option to pay the
Redemption Price in securities or other
property with an equivalent value per Right.
The redemption of the Rights by the Board may
be made effective at such time on such basis
and with such conditions as the Board in its
sole discretion may establish.
(b) Immediately upon the action of the Board
ordering the redemption of the Rights
pursuant to Section 23(a), and without any
further action and without any notice, the
right to exercise the Rights shall terminate
and the only right thereafter of the holders
of Rights shall be to receive the Redemption
Price. The Company shall promptly give
public notice of any such redemption;
provided, however, that the failure to give,
or any defect in, any such notice shall not
affect the validity of such redemption.
Within 10 days after such action of the Board
ordering the redemption of the Rights, the
Company shall mail a notice of redemption to
all the holders of the then outstanding
Rights at their last addresses as they appear
upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the
registry books of the transfer agent for the
Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed
given, whether or not the holder receives the
notice. Each such notice of redemption shall
state the method by which the payment of the
Redemption Price shall be made. Neither the
Company nor any of its Affiliates or
Associates may redeem, acquire or purchase
for value any Rights at any time in any
manner other than that specifically set forth
in this Section 23 or in Section 24 hereof,
and other than in connection with the
purchase of Common Shares prior to the
Distribution Date.
SECTION 24. EXCHANGE.
(a) The Board may, at its option, at any time
after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding
and exercisable Rights (which shall not
include Rights that have become void pursuant
to the provisions of Section 11(a)(ii)
hereof) for Common Shares at an exchange
ratio of one Common Share per Right,
appropriately adjusted to reflect any stock
split, stock dividend or similar transaction
occurring after the date hereof (such
exchange ratio being hereinafter referred to
as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board shall not be
empowered to effect such exchange at any time
after any Person (other than the Company, any
Subsidiary of the Company, any employee
benefit plan of the Company or any such
Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any
such plan), together with all Affiliates and
Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board
ordering the exchange of any Rights pursuant
to Section 24(a), and without any further
action and without any notice, the right to
exercise such Rights shall terminate and the
only right thereafter of a holder of such
Rights shall be to receive that number of
Common Shares equal to the number of such
Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly
give public notice of any such exchange;
provided, however, that the failure to give,
or any defect in, such notice shall not
affect the validity of such exchange. The
Company 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 shall
state the method by which the exchange of the
Common Shares for Rights shall be effected
and, in the event of any partial exchange,
the number of Rights which shall be
exchanged. Any partial exchange shall be
effected pro rata based on the number of
Rights (other than Rights which have become
void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of
Rights.
(c) In the event that there shall not be
sufficient Common Shares issued but not
outstanding or authorized but unissued to
permit any exchange of Rights as contemplated
in accordance with this Section 24, the
Company shall take all such actions as may be
necessary to authorize additional Common
Shares for issuance upon exchange of the
Rights. In the event the Company shall,
after good faith effort, be unable to take
all such actions as may be necessary to
authorize such additional Common Shares, the
Company shall substitute, for each Common
Share that would otherwise be issuable upon
exchange of a Right, a number of Preferred
Shares or fraction thereof such that the
current per share market price of one
Preferred Share multiplied by such number or
fraction is equal to the current per share
market price of one Common Share as of the
date of issuance of such Preferred Shares or
fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute
certificates which evidence fractional Common
Shares. In lieu of such fractional Common
Shares, the Company shall pay to the
registered holders of the Right Certificates
with regard to which such fractional Common
Shares would otherwise be issuable an amount
in cash equal to the same fraction of the
current market value of a whole Common Share.
For the purposes of this Section 24(d), the
current market value of a whole Common Share
shall be the closing price of a Common Share
(as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose
(i) to pay any dividend payable in stock of
any class to the holders of its
Preferred Shares or to make any other
distribution to the holders of its
Preferred Shares (other than a regular
quarterly cash dividend),
(ii) to offer to the holders of its Preferred
Shares rights or warrants to subscribe
for or to purchase any additional
Preferred Shares or shares of stock of
any class or any other securities,
rights or options,
(iii) to effect any reclassification of
its Preferred Shares (other than a
reclassification involving only the
subdivision of outstanding Preferred
Shares),
(iv) to effect any consolidation or merger
into or with, to effect any Share
Exchange with, or to effect any sale or
other transfer (or to permit one or more
of its Subsidiaries to effect any sale
or other transfer), in one or more
transactions, of 50% or more of the
assets or earning power of the Company
and its Subsidiaries (taken as a whole)
to, any other Person,
(v) to effect the liquidation, dissolution
or winding up of the Company, or
(vi) to declare or pay any dividend on the
Common Shares payable in Common Shares
or to effect a subdivision, combination
or consolidation of the Common Shares
(by reclassification or otherwise than
by payment of dividends in Common
Shares),
then, in each such case, the Company shall
give to each holder of a Right Certificate,
in accordance with Section 26 hereof, a
notice of such proposed action, which shall
specify the record date for the purposes of
such stock dividend, or distribution of
rights or warrants, or the date on which such
reclassification, consolidation, merger,
Share Exchange, sale, transfer, liquidation,
dissolution, or winding up is to take place
and the date of participation therein by the
holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and
such notice shall be so given in the case of
any action covered by Section 25(a)(i) or
(ii) above at least 10 days prior to the
record date for determining holders of the
Preferred Shares for purposes of such action,
and in the case of any such other action, at
least 10 days prior to the date of the taking
of such proposed action or the date of
participation therein by the holders of the
Common Shares and/or Preferred Shares,
whichever shall be the earlier.
(b) In case an event set forth in Section
11(a)(ii) hereof shall occur, then the
Company shall as soon as practicable
thereafter give to each holder of a Right
Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such
event, which notice shall describe such event
and the consequences of such event to holders
of Rights under Section 11(a)(ii) hereof.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder
of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
ShopKo Stores, Inc.
700 Pilgrim Way
Green Bay, Wisconsin 54304
Attention: Secretary
Subject to the provisions of Section 21 hereof,
any notice or demand authorized by this Agreement to be
given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is
filed in writing with the Company) as follows
Norwest Bank Minnesota, National Association
Stock Transfer Department
161 North Concord Exchange
P.O. Box 738
South St. Paul, Minnesota 55075-0738
Notices or demands authorized by this Agreement to
be given or made by the Company or the Rights Agent to
the holder of any Right Certificate 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.
The Company may from time to time supplement or
amend this Agreement without the approval of any
holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other
provisions with respect to the Rights which the Company
may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however, that
from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended
in any manner which would adversely affect the
interests of the holders of Rights.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to
give to any person or corporation other than the
Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).
SECTION 30. SEVERABILITY.
If any term, provision, covenant or restriction of
this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be
affected, impaired or invalidated.
SECTION 31. GOVERNING LAW.
This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under
the laws of the State of Minnesota and for all purposes
shall be governed by and construed in accordance with
the laws thereof applicable to contracts to be made and
performed entirely within Minnesota.
SECTION 32. 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 33. 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 as of the day and
year first above written.
SHOPKO STORES, INC. NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ Dale P. Kramer By: /s/ Ted Garrity
- ---------------------- ----------------------
Name: Dale P. Kramer Name: Ted Garrity
Title: President and Chief Title: Account Officer
Executive Officer
Exhibit A
CERTIFICATE OF DESIGNATIONS
of
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
SHOPKO STORES, INC.
(Pursuant to Section 302A.401 of the
Minnesota Business Corporation Act)
_____________________________
ShopKo Stores, Inc., a corporation organized
and existing under the Business Corporation Act of the
State of Minnesota (hereinafter called the
"Corporation"), hereby certifies that the following
resolution was adopted by the Board of Directors of the
Corporation as required by Section 302A.401 of the
Business Corporation Act at a meeting duly called and
held on April 16, 1992:
RESOLVED, that pursuant to the authority
granted to and vested in the Board of Directors of this
Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the
provisions of the Articles of Incorporation, the Board
of Directors hereby creates a series of Preferred
Stock, par value $.01 per share (the "Preferred
Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the rela
tive rights, preferences, and limitations thereof as
follows:
Series B Junior Participating Preferred
Stock:
Section 1. Designation and Amount. The
shares of such series shall be designated as "Series B
Junior Participating Preferred Stock" (the "Series B
Preferred Stock") and the number of shares constituting
the Series B Preferred Stock shall be 100,000. Such
number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series B
Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation
convertible into Series B Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of
any shares of any series of Preferred Stock (or
any similar stock) ranking prior and superior to
the Series B Preferred Stock with respect to
dividends, the holders of shares of Series B
Preferred Stock, in preference to the holders of
Common Stock, par value $.01 per share (the
"Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors
out of funds legally available for the purpose,
quarterly dividends payable in cash on the first
day of March, June, September and December in each
year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a
share of Series B Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to
the greater of (a) $10 or (b) subject to the
provision for adjustment hereinafter set forth,
1,000 times the aggregate per share amount of all
cash dividends, and 1,000 times the aggregate per
share amount (payable in kind) of all non-cash
dividends or other distributions, other than a
dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared
on the Common Stock 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 B Preferred Stock.
In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the
outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then
in each such case the amount to which holders of
shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (b)of
the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the
numerator of which is the number of shares of
Common Stock outstanding immediately after such
event and the denominator of which is the number
of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend
or distribution on the Series B Preferred Stock as
provided in paragraph (A) of this Section
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 B
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 B
Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of
such shares, 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 B
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
B 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 B Preferred Stock entitled to
receive payment of a dividend or distribution
declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of
shares of Series B Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series B
Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote
of the shareholders of the Corporation. In the
event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding
shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case
the number of votes per share to which holders of
shares of Series B Preferred Stock were entitled
immediately prior to such event shall be adjusted
by multiplying such 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) Except as otherwise provided herein, in
any other Certificate of Designations creating a
series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series B
Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the
Corporation having general voting rights shall
vote together as one class on all matters
submitted to a vote of shareholders of the
Corporation.
(C) Except as set forth herein, or as
otherwise provided by law, holders of Series B
Preferred Stock shall have no special voting
rights and their consent shall not be required
(except to the extent they are entitled to vote
with holders of Common Stock as set forth herein)
for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series B
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 B Preferred Stock
outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or
make any other distributions, on any shares
of stock ranking junior (either as to
dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock;
(ii) declare or pay dividends, 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 B Preferred
Stock, except dividends paid ratably on the
Series B 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 junior (either as to
dividends or upon liquidation, dissolution or
winding up) to the Series B Preferred Stock,
provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for
shares of any stock of the Corporation
ranking junior (either as to dividends or
upon dissolution, liquidation or winding up)
to the Series B Preferred Stock; or
(iv) redeem or purchase or
otherwise acquire for consideration any
shares of Series B Preferred Stock, or any
shares of stock ranking on a parity with the
Series B 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.
(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.
Section 5. Reacquired Shares. Any shares of
Series B 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 subject to the conditions and
restrictions on issuance set forth herein, in the
Articles of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or
any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or
Winding Up. Upon any liquidation, dissolution or
winding up of the Corporation, no distribution shall be
made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred
Stock unless, prior thereto, the holders of shares of
Series B 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, provided that
the holders of shares of Series B Preferred Stock shall
be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set
forth, equal to 1,000 times the aggregate amount to be
distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking
on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series
B Preferred Stock, except distributions made ratably on
the Series B Preferred Stock and all such parity stock
in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the
Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of
shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in
clause (1) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock
outstanding immediately after such event and the denomi
nator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In
case the Corporation shall enter into any
consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for
or changed into other stock or securities, cash and/or
any other property, then in any such case each share of
Series B Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per
share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding
sentence with respect to the exchange or change of
shares of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock
outstanding immediately after such event and the
denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of
Series B Preferred Stock shall not be redeemable.
Section 9. Rank. The Series B Preferred
Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all
series of any other class of the Corporation's
Preferred Stock.
Section 10. Amendment. The 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
B Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series B
Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of
Designations is executed on behalf of the Corporation
by its President and attested by its Secretary this 7th
day of August, 1992.
/s/ Dale P. Kramer
--------------------------
President
Attest:
/s/ David A. Liebergen
- -------------------------
Secretary
Exhibit B
Form of Right Certificate - Front Side
Certificate No. R-_______________ _______________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 23, 2007, OR
EARLIER REDEMPTION OR EXCHANGE. THE RIGHTS ARE SUBJECT
TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS, ASSOCIATES OR AFFILIATES OF ACQUIRING PERSONS
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) (OR
NOMINEE OF ANY OF THEM) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A
PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR
AN ASSOCIATE OF AN ACQUIRING PERSON (OR A NOMINEE OF
ONE OF THEM). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES
SPECIFIED IN THE RIGHTS AGREEMENT.]1
Right Certificate
SHOPKO STORES, 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 July 3, 1992, as amended and restated as of
September 24, 1997 (the "Rights Agreement"), between
ShopKo Stores, Inc., a Minnesota corporation (the
"Company"), and Norwest Bank Minnesota, National
Association (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as
such term is defined in the Rights Agreement) and prior
to 5:00 P.M., Green Bay, Wisconsin time, on September
23, 2007, at the principal office of the Rights Agent,
or at the office of its successor as Rights Agent, one
one-thousandth of a fully paid non-assessable share
(except as otherwise provided by Section 180.0622(2)(b)
of the Wisconsin Statutes and judicial interpretations
thereof) of Series B Junior Participating Preferred
Stock, $.01 par value (the "Preferred Shares"), of the
Company, at a purchase price of $100.00 per one one-
thousandth of a Preferred Share (the "Purchase Price"),
upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly
executed.
The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a
Preferred Share which may be purchased upon exercise
hereof) and the Purchase Price set forth above are the
number and Purchase Price as of _________________,
1997, based on the Preferred Shares as constituted
at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-thousandths of
a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment
upon the happening of certain events.
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights
Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part
hereof and reference is hereby made to the Rights
Agreement for a full description of the rights,
limitations of rights, obligations, duties and
immunities of the Rights Agent, the Company, and the
holders of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive
offices of the Company and the above-mentioned offices
of the Rights Agent.
This Right Certificate, upon surrender at the
principal office of the Rights Agent, may be exchanged
for another Right Certificate of like tenor and date
evidencing Rights entitling the holder to purchase a
like aggregate number of Preferred Shares as the Rights
evidenced by the Right Certificate. If this Right
Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be
redeemed by the Company at a redemption price of $.01
per Right or (ii) may be exchanged in whole or in part
for shares of the Company's Common Stock, par value
$.01 per share, or Preferred Shares.
No fractional Preferred Shares shall be issued
upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share,
which may, at the election of the Company, be evidenced
by depositary receipts), but in lieu thereof a cash
payment shall be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be
entitled to vote or receive dividends or be deemed for
any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or
obligatory for any purpose until it has been
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company, dated as of
_______________________, ______.
ATTEST: SHOPKO STORES, INC.
By: By:
- ---------------------- ------------------------
Secretary
Countersigned (for purposes of authentication):
By:
- ----------------------
Authorized Signature
Form of Right Certificate - Reverse Side
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform
to the name as written upon the face of this Right
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth below in
the Form of Assignment or the Form of Election to
Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial
owner of the Rights evidenced by this Right Certificate
to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
FORM OF ASSIGNMENT
(To be executed by the registered holder to transfer
the Right Certificate.)
FOR VALUE RECEIVED, __________________, hereby
sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably
constitute and appoint
Attorney, to
transfer the within Right Certificate on the books of
the within-named Company, with full power of
substitution.
Signature: Dated:
Signature Guaranteed:
(Signatures must be guaranteed by a member firm of
a registered national securities exchange, a member of
the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office
or correspondent in the United States.)
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the
Rights Agreement).
Signature:
FORM OF ELECTION TO PURCHASE
(To be executed by registered holder to exercise Rights
represented by the Right Certificate.)
To: SHOPKO STORES, INC.
The undersigned hereby irrevocably elects to
exercise ________ Rights represented by this Right
Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the
name of:
(Please print name and address)
Social security or taxpayer identification number:
If such number of Rights shall not be all the
Rights evidenced by this Right Certificate, a new Right
Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
(Please print name and address)
Social security or taxpayer identification number:
Signature: Dated:
Signature Guaranteed:
(Signatures must be guaranteed by a member firm of
a registered national securities exchange, a member of
the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office
or correspondent in the United States.)
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not
beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the
Rights Agreement).
Signature:
Exhibit C
Summary of Rights to Purchase Preferred Shares
On April 16, 1992, the Board of Directors (the
"Board") of ShopKo Stores, Inc. (the "Company")
declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common
stock, par value $.01 per share (the "Common Shares")
of the Company. The dividend was payable on July 2,
1997, to the shareholders of record on that date.
Each Right entitles the holder to purchase from
the Company one one-thousandth of a share of Series B
Junior Participating Preferred Stock, $.01 par value
(the "Preferred Shares") of the Company at a price of
$100.00 per one one-thousandth of a Preferred Share
(the "Purchase Price").
A complete description of the Rights is set forth
in the Amended and Restated Rights Agreement (the
"Rights Agreement") between the Company and Norwest
Bank Minnesota, National Association, the Rights Agent,
and this Summary is qualified in its entirety by
reference to the Rights Agreement. A copy of the
Rights Agreement was filed with the Securities and
Exchange Commission as an exhibit to a Registration
Statement on Form 8-A/A dated September 24, 1997, and
copies are available from the Company free of charge on
request.
The Rights Agreement provides that the Rights will
not be exercisable until the Distribution Date, which
will be the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the Company's
outstanding Common Shares, or (ii) 10 business days (or
such later date as is established by the Board before
any person or group becomes an Acquiring Person)
following the commencement of, or the announcement of
an intention to make, a tender offer or exchange offer
which, if consummated, would result in the beneficial
ownership by a person or group of 15% or more of the
Company's outstanding Common Shares.
Until the Distribution Date (or the earlier
redemption or expiration of the Rights), the Rights
will be transferred with, and only with, the Common
Shares. For Common Shares outstanding as of July 2,
1997, the Rights will be evidenced by the certificates
for such Common Shares. For Common Shares issued
thereafter, the Rights will be evidenced by a notation
on the certificate incorporating the Rights Agreement
by reference. In either case, until the Distribution
Date (or the earlier redemption or expiration of the
Rights), the surrender for transfer of any certificate
for Common Shares, even without the notation or an
attached copy of this Summary, will constitute the
transfer of the Rights associated with the Common
Shares represented by the certificate. As soon as
practicable after the Distribution Date, separate
certificates evidencing the Rights ("`Right
Certificates") will be mailed to holders of record of
the Common Shares as of the close of business on the
Distribution Date, and thereafter such separate Right
Certificates alone will evidence the Rights.
If any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a
Right (other than the Acquiring Person, whose Rights
will have become void) will be entitled, upon the
exercise of the Right, to receive that number of Common
Shares having a market value of two times the exercise
price of the Right. In addition, if, after a person or
group has become an Acquiring Person, the Company is
acquired in a merger or other business combination
transaction or if 50% or more of its consolidated
assets or earning power are sold, each holder of a
Right will be entitled to receive, upon the exercise of
the Right at its then current exercise price, that
number of shares of common stock of the acquiring
company having a market value at the time of such event
of two times the exercise price of the Right.
At any time before an Acquiring Person acquires
beneficial ownership of 15% or more of the Company's
outstanding Common Shares, the Board may redeem the
Rights in whole, but not in part, at a price of $.01
per Right, on such terms as the Board may establish in
its sole discretion. Immediately upon any redemption
of the Rights, the right to exercise the Rights will
terminate and the holders will be entitled only to
receive the foregoing redemption price.
At any time after any person or group becomes an
Acquiring Person, but before the Acquiring Person
acquires 50% or more of the Company's outstanding
Common Shares, the Board may exchange the Rights (other
than those held by the Acquiring Person, which will
have become void), in whole or part, at an exchange
ratio of one Common Share or one one-thousandth of a
Preferred Share (or of a share of a class or series of
the Company's preferred stock having equivalent rights,
preferences and privileges) per Right.
The number of outstanding Rights and the number of
one one-thousandths of a Preferred Share issuable upon
exercise of each Right are subject to adjustment if,
prior to the Distribution Date, there is a stock split
of the Common Shares; a stock dividend on the Common
Shares payable in Common Shares; or a subdivision,
consolidation or combination of the Common Shares.
The Purchase Price and the number of Preferred
Shares or other securities or property issuable upon
exercise of the Rights are also subject to adjustment
to prevent dilution: in the event of a stock dividend
or of a subdivision, combination or reclassification of
the Preferred Shares; upon the grant to the Preferred
Share holders of certain rights or warrants to
subscribe for or purchase Preferred Shares at a price
less than the then-current market price or securities
convertible into Preferred Shares with a conversion
price less than the then-current market price for the
Preferred Shares; or upon the distribution to the
Preferred Share holders of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid
out of earnings or retained earnings or dividends
payable in Preferred Shares) 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 require
an adjustment of at least 1% in such Purchase Price.
The holder of a Right, as such, will have no
rights as a shareholder of the Company (including,
without limitation, the right to vote or to receive
dividends) until the Right is exercised. The terms of
the Rights may be amended by the Board without the
consent of the holders of the Rights, provided that no
amendment adversely affects the interests of the
holders.
If not exercised, redeemed or exchanged sooner,
the Rights will expire on September 23, 2007, unless
such expiration date is extended.
The Company's Articles of Incorporation set forth
the terms of the Preferred Shares. If issued, the
Preferred Shares will be entitled to a cumulative
preferential quarterly dividend per share equal to the
greater of $10 or 1,000 times the dividend declared on
the Company's Common Shares. In the event of
liquidation, the holders of the Preferred Shares will
be entitled to receive an amount equal to accrued and
unpaid dividends, plus an amount per share equal to the
greater of $1,000 or 1,000 times the payment made per
share to holders of Common Shares. Each Preferred
Share will be entitled to 1,000 votes, voting together
with the holders of the Common Shares on all matters
submitted to the vote of shareholders. In the event of
any merger, consolidation or other transaction in which
Common Shares are exchanged, the holder of each
Preferred Share will be entitled to receive 1,000 times
the amount and type of consideration paid per Common
Share. The rights of the holders of Preferred Shares
as to dividends and liquidations, their voting rights,
and their rights in the event of mergers and
consolidations, are protected by customary anti-
dilution provisions.
Because of the nature of the Preferred Shares'
dividend, liquidation and voting rights, the value of
the one one-thousandth of a Preferred Share purchasable
upon the exercise of each Right should approximate the
value of one Common Share.
No fractional Preferred Shares will be issued
(other than fractions which are integral multiples of
one one-thousandth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of
exercise.
_______________________________
1 The portion of the legend in brackets shall be
inserted only if applicable.
