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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
GEORGIA 58-1949379
(State of incorporation or organization) (I.R.S. Employer Identification No.)
5895 WINDWARD PARKWAY, SUITE 220 30202-4182
ALPHARETTA, GEORGIA 30202-4182 (Zip code)
(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH EACH
TO BE SO REGISTERED CLASS IS TO BE REGISTERED
------------------- -----------------------------------
Common Share Purchase Rights NASDAQ
Securities to be registered pursuant to Section 12(g) of the Act:
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
On April 24, 1996, the Board of Directors of Mountasia Entertainment
International, Inc. (the "Company") declared a dividend distribution of one
common stock purchase right (the "Rights") for each outstanding share of common
stock, no par value per share (the "Common Shares"), of the Company, to
shareholders of record at the close of business on May 6, 1996 (the "Record
Date"). Each Right entitles the registered holder to purchase from the Company
one Common Share (or in certain circumstances, cash, property or other
securities of the Company) at a purchase price of $12.50, subject to adjustment
(the "Purchase Price"). The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement") between the Company and
Continental Stock Transfer & Trust Company, the Rights Agent. Capitalized
terms used but not otherwise defined herein shall have the meaning given such
terms in the Rights Agreement.
Initially, the Rights will be evidenced by the certificates
representing Common Shares then outstanding, no separate Right Certificates
will be distributed and the Rights will not be tradeable separate from the
Common Shares. The Rights will become exercisable and will separate from the
Common Shares upon the earlier of (i) ten calendar days after a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 20% or more of the
outstanding Common Shares (the "Shares Acquisition Date") or (ii) ten business
days (or a later date as determined by the Board of Directors or, if there has
been an Adverse Change of Control, by a majority of the Continuing Directors
(as such terms are herein defined)) after the commencement of, or first public
announcement of an intention to commence, a tender offer or exchange offer that
would result in a person or group beneficially owning 20% or more of the
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Share certificates and will be transferred with and only with such
Common Share certificates, (ii) new Common Share certificates issued after the
Record Date will contain in accordance with the Rights Agreement a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on April 24, 2006, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date, and thereafter, the separate Right
Certificates alone will represent the Rights. Except as
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otherwise provided by the Rights Agreement or determined by the Board of
Directors, only Common Shares issued prior to the Distribution Date will be
issued with Rights.
In the event that a person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Common Shares
(or in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price of the Right.
Notwithstanding the foregoing, following the occurrence of such an event or any
other Triggering Event (as defined below), all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
After the Shares Acquisition Date, in the event that (i) the Company
consolidates, or merges with, any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding Common Shares of
the Company are exchanged for securities, cash or property of the other person
and the Company is the surviving corporation, or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Purchase Price of the Right. The events set forth in
this paragraph and the preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable, and the number of Common Shares or other
securities, cash or property issuable, upon exercise of the Rights are subject
to customary adjustments from time to time to prevent dilution in the event of
certain changes in the shares of the Company. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
amount to an increase or decrease of at least 1% in the Purchase Price. The
Company may determine not to issue fractional Rights or shares, and in lieu
thereof, an adjustment in cash will be made based on the market value of the
Rights or shares on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (subject to adjustment), at any time before
the close of business on the tenth calendar day following the Shares
Acquisition Date; provided, however, that if the authorization to redeem the
Rights occurs on or after the date of a change in a majority of the Board of
Directors of the Company as a result of a proxy or consent solicitation and a
person who was a participant in such solicitation has stated that such person
(or any of its Affiliates or Associates) has taken or intends to take or may
consider taking actions that would result in such person becoming an Acquiring
Person or cause the occurrence of a Triggering Event (the existence of these
circumstances being an "Adverse Change of Control"), then the redemption of the
Rights will require the approval of a majority of the Continuing Directors.
Immediately upon the action of the Board of Directors ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the redemption price.
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"Continuing Director" means (i) any member of the Board of Directors
of the Company, while such person is a member of the Board, who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate,
and was a member of the Board prior to the Record Date, or (ii) any person who
subsequently becomes a member of the Board who, while such person is a member
of the Board, is not an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by any person of 50% or more of the outstanding Common Shares,
the Board of Directors of the Company may exchange the then outstanding and
exercisable Rights (other than Rights owned by an Acquiring Person, which will
have become null and void), in whole or in part, for Common Shares, each Right
being exchangeable for one Common Share, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the earliest of (i) the Distribution
Date, (ii) a Triggering Event or (iii) an Adverse Change of Control. After the
first to occur of such events, the provisions of the Rights Agreement may be
amended with the approval of a majority of the Continuing Directors in order
(x) to make changes that do not adversely affect the interests of holders of
the Rights (other than the interests of any Acquiring Person), (y) to cure any
ambiguity or correct or supplement any provision which may be defective or
inconsistent with other provisions contained in the Rights Agreement, or (z) to
shorten or lengthen any time period under the Rights Agreement, but after (i)
the Distribution Date, (ii) a Triggering Event or (iii) an Adverse Change of
Control, no time period relating to redemption of the Rights may be lengthened
so as to make the Rights redeemable at a time at which the Rights had not then
been redeemable and no other time period may be lengthened unless for the
purpose of protecting, enhancing or clarifying the rights or benefits of
holders of the Rights,
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being
acquired. Accordingly, the existence of the Rights may deter certain acquirors
from making takeover proposals or tender offers. However, the rights plan
helps ensure that the Company's shareholders receive fair and equal treatment
in the event of any proposed takeover of the Company. The adoption of the plan
is not in response to any specific takeover threat or proposal, but is a
precaution taken to protect the rights of the Company's shareholders.
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A conformed copy of the Rights Agreement between the Company and the
Rights Agent specifying the terms of the Rights (which includes as Exhibit A
the form of Right Certificate), the form of press release announcing the
declaration of the Rights and the letter to the Company's shareholders
regarding the adoption of the Rights Plan are attached hereto as Exhibits 1, 2
and 3, respectively, and are incorporated herein by reference. The foregoing
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to such exhibits.
Item 2. Exhibits.
Exhibit 1 Form of Rights Agreement dated as of April 24, 1996 between
Mountasia Entertainment International, Inc. and Continental
Stock Transfer & Trust Company, including Form of Right
Certificate (Exhibit A) and Summary of Rights to Purchase
Common Stock (Exhibit B)
Exhibit 2 Press Release dated April 25, 1996
Exhibit 3 Draft Letter to Shareholders dated May 6, 1996
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
MOUNTASIA ENTERTAINMENT
INTERNATIONAL, INC.
Date: May 6, 1996 By: /s/ L. Scott Demerau
---------------------------------
L. Scott Demerau, Chairman of the
Board, Chief Executive Officer
and President
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EXHIBIT
MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
RIGHTS AGREEMENT
Dated as of April 24, 1996
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TABLE OF CONTENTS
<TABLE>
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . 8
Section 8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 9. Reservation and Availability of Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 10. Common Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights . . . . . . . . . . . . . . . . . 11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . 18
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . 19
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . 24
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
</TABLE>
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<TABLE>
<S> <C> <C>
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 23. Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 29. Determinations and Actions by the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Exhibit A Form of Right Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Form of Summary of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
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RIGHTS AGREEMENT
Rights Agreement, dated as of April 24, 1996, between MOUNTASIA
ENTERTAINMENT INTERNATIONAL, INC., a Georgia corporation (the "Company"), and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY as Rights Agent (the "Rights
Agent").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one common share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company outstanding as of the
Close of Business on May 6, 1996 (the "Record Date"), each Right initially
representing the right to purchase one Common Share, upon the terms and subject
to the conditions herein set forth, and has further authorized (1) 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 (as such term
is defined in Section 3), the Redemption Date and the Final Expiration Date (as
such terms are defined in Section 7) and (ii) in certain circumstances provided
in Section 22, the issuance of one Right with respect to each Common Share that
shall become outstanding between the Distribution Date and the earlier of the
Redemption Date and the Final Expiration Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, and intending to be legally bound hereby, 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 who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the Common Shares then outstanding, but
shall not include any Exempt Person (as hereinafter defined). Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of beneficial ownership of Common Shares by the Company that, by
reducing the number of Common Shares (or securities convertible into or
exchangeable for Common Shares) outstanding, increases the percentage of Common
Shares beneficially owned by such Person (together with all Affiliates and
Associates of such Person) to 20% or more of the Common Shares then
outstanding; provided, however, that if any Person (other than Exempt Persons)
shall become the Beneficial Owner of 20% or more of the Common Shares 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 an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the first sentence of this paragraph (a), has
become such inadvertently, and such Person divests as promptly as practicable 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
paragraph (a), then such Person shall not, solely as a result of such
inadvertent acquisition, be deemed to be an "Acquiring Person" for any purpose
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
promulgated under the Securities
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Exchange Act of 1934, as amended (the "Exchange Act"), as such rule is in
effect on the Record Date.
(c) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own," and shall be deemed to have "beneficial
ownership" of, any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly has (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own
(1) securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange, (2) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (3) securities
issuable upon exercise of Rights from and after the occurrence of a
Triggering Event, if such Rights were acquired by such Person or such
Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 or pursuant to Section 11(a)(i)
in connection with an adjustment made with respect to any of the
Rights heretofore specified in this clause (3); or (B) the right to
vote or otherwise has "beneficial ownership" (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, pursuant to this subparagraph (B), any security as a result of
any agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding (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 of the Exchange
Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(ii) that are beneficially owned, including pursuant to
subparagraphs (i)(A) and (B) of this subsection (c), directly or
indirectly, by any other Person (or Affiliate or Associate thereof)
with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the provision in
subparagraph (i)(B) of this subsection (c)) or disposing of any
securities of the Company;
provided, however, that nothing in this subsection (c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
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(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York 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.,
New York, New York time, on such date; provided, however, that if such date is
not a Business Day, it shall mean 5:00 P.M., New York, New York time, on the
next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean the shares of Common Stock, no 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 Person or, if such Person is a Subsidiary of another Person, the
Person or Persons that ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3.
(h) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company or, (iv) any entity holding Common Shares for the
benefit of present or future participants (e.g. a trustee or plan fiduciary)
pursuant to the terms of any such plan.
(i) "Final Expiration Date" shall have the meaning set forth in
Section 7.
(j) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(k) "Redemption Date" shall have the meaning set forth in Section
7.
(l) "Section 11(a)(ii) Event" shall mean the event described in
Section 11(a)(ii).
(m) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
(n) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(o) "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 interests is owned, directly or indirectly, by such Person.
(p) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (and such holders shall, in
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accordance with Section 3, 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. In
the event the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company
shall determine.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the tenth
calendar day after the Shares Acquisition Date or (ii) the Close of Business on
the tenth Business Day (or such later date as the Board of Directors shall
determine; provided that if such determination occurs on or after the date of
an Adverse Change of Control, then such date may be extended only if there are
Continuing Directors in office and such extension is authorized by a majority
of such Continuing Directors) after the date that a tender or exchange offer by
any Person (other than an Exempt Person) is first published or sent or given
within the meaning of Rule 14d-4(a) of the General Rules and Regulations under
the Exchange Act, the consummation of which would result in beneficial
ownership by a Person (other than an Exempt Person) of 20% or more of the
outstanding Common Shares (including any such date that is after the date of
this Agreement and prior to the issuance of the Rights) (the earlier of (i) and
(ii) being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer of
Common Shares. As soon as practicable after the Distribution Date, the Rights
Agent will send, by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date,
or, with respect to Common Shares so issued on or after the Distribution Date
(unless otherwise provided with respect thereto as aforesaid), to the record
holder of such Common Shares on the date of issuance, at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit A, evidencing one Right for each Common Share
so held, subject to adjustments as provided herein. In the event that an
adjustment in the number of Rights per Common Share has been made pursuant to
Section 11(i) hereof, at the time of distribution of the Right Certificates,
the Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof so that Right Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit B (the "Summary of Rights"), 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. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for Common
Shares registered in the names of the holders thereof (together with a copy of
the Summary of Rights).
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Until the earlier of the Distribution Date or Final Expiration Date, the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Rights shall be issued in respect of all Common Shares which
are issued (whether originally issued or delivered from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or
Final Expiration Date, or in certain circumstances provided in Section 22,
after the Distribution Date. Certificates for Common Shares issued after the
Record Date but prior to the earlier of the Distribution Date or the Final
Expiration Date (including, without limitation, reacquired Common Shares
referred to in the last sentence of this paragraph (c)) 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 Mountasia
Entertainment International, Inc. (the "Company") and Continental
Stock Transfer & Trust Company as Rights Agent, dated as of April 24,
1996 (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 the Company.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly following
receipt of a written request therefor.
Under certain circumstances, Rights beneficially owned by Acquiring
Persons or Associates or Affiliates of Acquiring Persons (as such
terms are defined in the Rights Agreement) and any subsequent holder
of such Rights may become null and void.
With respect to such certificates bearing the foregoing legend, until the
earlier of the Distribution Date or the Final Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Shares
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates. In the
event that the Company purchases or acquires any Common Shares after the Record
Date but prior to the earlier of the Distribution Date or the Final Expiration
Date, any Rights associated with such Common Shares shall be deemed canceled
and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES. (a) The Right
Certificates (and the forms of election to purchase shares and of assignment to
be printed on the reverse thereof) shall be substantially in the form of
Exhibit A and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
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<PAGE> 9
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 any securities
association on whose interdealer quotation system the Rights may from time to
time be authorized for quotation, or to conform to usage. Subject to the
provisions of Section 22, the Right Certificates that are issued in respect of
Common Shares that were issued and outstanding as of the Record Date, shall be
dated as of the Record Date, and all Right Certificates that are issued in
respect of other Common Shares shall be dated as of the respective dates of
issuance of such Common Shares, and in either case on their faces shall entitle
the holders thereof to purchase such number of Common Shares as shall be set
forth therein at the price per Common Share set forth therein (the "Purchase
Price"), but the number of such Common Shares and the Purchase Price shall be
subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3 or Section
22 that represents Rights beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or any Associate or Affiliate of an Acquiring Person) which
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or any Associate or Affiliate of an
Acquiring Person) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A)
a transfer (whether or not for consideration) from the Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) to holders of equity interests
in such Acquiring Person (or of such Associate or Affiliate) or to any Person
with whom the Acquiring Person has any agreement, arrangement or understanding
regarding the transferred Rights, or (B) a transfer that the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of Section 7(e) or
Section 11 hereof, and any Right Certificate issued pursuant to Section 6 or
Section 11 upon transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or an Associate of an Acquiring Person. This Right
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of the Rights
Agreement.
The absence of the foregoing legend on any Right Certificate shall in
no way affect any of the other provisions of this Agreement, including, without
limitation, the provisions of Section 7(e). The Company shall instruct the
Rights Agent in writing of the Rights which should be so legended and shall
supply the Rights Agent with such legended Right Certificates.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Right
Certificates shall be executed on behalf of the Company by its chairman, its
president or a vice president, either manually or by facsimile signature, and
have affixed thereto the Company's seal or a facsimile thereof that shall be
attested by the secretary, or an assistant secretary or treasurer, of the
Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so
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<PAGE> 10
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect
as though the person who signed such Right Certificates had not ceased to be
such officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the office of the Rights Agent designated for such
purposes, 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 as evidenced on the
face of each of the Right Certificates and the date and certificate number of
each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. (a)
Subject to the provisions of Section 4(b), Section 7(e), Section 11 and Section
14, at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number
of Common Shares (or other securities or other assets, as the case may be) 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 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, with the
form of assignment and certificate appropriately executed, at the office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e), Section 11 and Section 14, 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.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a 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
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<PAGE> 11
Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a))
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 office of the Rights
Agent designated for such purpose, together with payment of the Purchase Price
for each Common Share (or other securities, cash or other assets, as the case
may be) as to which the Rights are exercised, at or prior to the earliest of
(i) the Close of Business on April 24, 2006 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section 23 (the
"Redemption Date"), or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price for each Common Share pursuant to the
exercise of a Right shall initially be $12.50, shall be subject to adjustment
from time to time as provided in Sections 11 and 13 and shall be payable in
lawful money of the United States of America, subject to paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares (or other securities or other
assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9(e) (as determined by the Rights Agent)
the Rights Agent shall, subject to Section 20(j), thereupon promptly (i) (A)
requisition from any transfer agent of the Common Shares certificates for the
number of Common Shares to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of Common Shares usable
upon exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number of Common
Shares to be purchased (in which case certificates for the Common 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, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional interests in shares
in accordance with Section 14, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificates registered in such name or names
as may be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii)) may be made in cash or by certified or bank
check or money order payable to the order of the Company. In the event the
Company is obligated to issue other securities (including Common Shares) of the
Company or distribute other property pursuant to Section 11(a) hereof, the
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<PAGE> 12
Company will make all arrangements necessary so that such other securities or
property are available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require prior to the occurrence
of a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole Common Shares would be issued.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14.
(e) Notwithstanding anything to the contrary in this Agreement,
from and after the first occurrence of any Triggering Event, any Rights
beneficially owned by (i) any Acquiring Person (or any Associate or Affiliate
of an Acquiring Person), (ii) a transferee of an Acquiring Person (or any
Associate or Affiliate of an Acquiring Person) which becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or any Associate or Affiliate of an Acquiring Person) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) to holders of equity interests in such Acquiring Person (or
of such Associate or Affiliate) or to any Person with whom the Acquiring Person
has any agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer that the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall be null and
void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) are complied
with, but shall have no liability to any holder of Rights or any other Person
as a result of its failure to make any determination under this Section 7(e) or
such Section 4(b) with respect to any Acquiring Person or an Associate or
Affiliate of an Acquiring Person or their transferees.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
transfer or exercise unless such registered holder shall have (i) completed and
signed the certificate following the form of assignment or election to purchase
set forth on the reverse side of the Right Certificate surrendered for such
assignment or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or 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
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<PAGE> 13
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. RESERVATION AND AVAILABILITY OF COMMON SHARES. (a)
Subject to the Company's rights under Section 11(a)(iii) hereof to otherwise
fulfill its obligations hereunder, the Company covenants and agrees that it
will cause to be reserved and kept available out of its authorized and unissued
Common Shares or any Common Shares held in its treasury, the number of Common
Shares that will be sufficient to permit the exercise in full of all
outstanding Rights pursuant to the terms of this Agreement; provided, however,
that such action need not be taken with respect to Common Shares (or other
securities) issuable upon exercise of the Rights until after such time as the
Rights become exercisable, and with respect to Common Shares (or other
securities) issuable upon occurrence of a Triggering Event until the occurrence
of such event.
(b) So long as the Common Shares issuable upon the exercise of
Rights may be listed on any United States national securities exchange, the
Paris Stock Exchange or the London Stock Exchange or authorized for quotation
on any interdealer quotation system of any securities association, the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed on such
exchange or quoted on such system upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
is practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Sections
11(a)(ii) (or Section 11(a)(iii) and 13 hereof), or as soon as is required by
law following the Distribution Date, as the case may be, a registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
with respect to the Common Shares or other securities purchasable upon exercise
of the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities or
(B) the Final Expiration Date. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or "blue
sky" laws of the various states and other appropriate jurisdictions in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this paragraph, the exercisability
of the Rights in order to prepare and file such registration statement and
permit it to become effective and to take such actions under such other
securities or blue sky laws and permit them to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction
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<PAGE> 14
shall not have been obtained or the exercise thereof shall not be permitted
under applicable law or a registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares or other securities
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that, subject to
Sections 6 and 7(c), it will pay when due and payable any and all foreign,
federal and state transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates or of any Common Shares (or
other securities or property) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for
the Common Shares (or other securities or property) in a name other than that
of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates or depositary
receipts for Common Shares (or other securities or property) 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 satisfaction that no such tax is
due.
SECTION 10. COMMON SHARES RECORD DATE. Each person in whose name
any certificate for Common Shares (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the Common Shares (or other securities) 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 Common Shares (or
other securities) transfer books of the Company are closed or a date on which
the exercisability of the Rights is suspended pursuant to Section 9(c), such
person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, as applicable, the next succeeding Business
Day on which the Common Shares (or other securities) transfer books of the
Company are open or the next succeeding Business Day on which such suspension
is no longer in effect. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate, as such, shall not be entitled to any rights
of a holder of common Shares (or other securities) 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 and kind of securities
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
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<PAGE> 15
(a)(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of Common Shares or (D) issue
any shares of its capital stock in a reclassification of the Common Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e), 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 that, if such Right had been exercised immediately prior to such
date and at a time when the Common Shares (or other capital stock, as the case
may be) transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs that would
require an adjustment under both this 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) In the event any Person (other than an Exempt Person), at any
time after the date of this Agreement, is or becomes an Acquiring
Person, then, promptly following the occurrence of such Section
11(a)(ii) Event, proper provision shall be made so that each holder of
a Right, except as provided in Section 7(e), shall thereafter have a
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of the
number of Common Shares for which a Right was theretofore exercisable,
such number of Common Shares as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of Common
Shares for which a Right was exercisable immediately prior to the
first occurrence of the Section 11(a)(ii) Event and (y) dividing that
product (which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the current per share market
price of the Common Shares (determined pursuant to Section 11(d)) on
the date of the occurrence of the Section 11(a)(ii) Event (such number
of shares is herein called the "Adjustment Shares"); provided,
however, that the Purchase Price and number of Adjustment Shares shall
be further adjusted as provided in this Agreement to reflect any event
occurring after the date of such first occurrence.
(iii) In the event that after the Distribution Date or, in the case
of a Section 11(a)(ii) Event after the date of the occurrence of such
Section 11(a)(ii) Event, the number of Common Shares which is
authorized by the Company's articles of incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in
full of the Rights, the Company shall: (A) determine the excess of (1)
the value of the Common Shares, or Adjustment Shares in accordance
with Section 11(a)(ii), as the case may be, issuable upon the exercise
of a Right (the "Current Value") over (2) the Purchase Price (such
excess is herein called the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for
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<PAGE> 16
the Common Shares, or Adjustment Shares, as the case may be, upon
exercise of the Rights, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Shares of the same or different class or other
equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock which the Board of
Directors of the Company has deemed to have substantially the same
economic value as Common Shares (such shares or units of shares of
preferred stock are referred to herein as "common share
equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing having an aggregate value
equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the
advice of a nationally recognized investment banking firm selected by
the Board of Directors of the Company; provided, however, if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the
Distribution Date, or in the case of a Section 11(a)(ii) Event the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x), and (y) being refer-red to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Common
Shares (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If
the Board of Directors of the Company shall determine in good faith
that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent
necessary, but not more than one hundred twenty (120) days after the
Distribution Date or the Section 11(a)(ii) Trigger Date, as the case
may be, in order that the Company may seek shareholder approval for
the authorization of such additional shares (such period, as it may be
extended, the "Substitution Period"). To the extent that the Company
determines that some action should be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional securities
and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public
announcement stating that exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time
as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Shares shall be the
current per share market price per Common Share (as defined in Section
11(d)) on the Distribution Date or the Section 11(a)(ii) Trigger Date,
as the case may be, and the value of any "common share equivalent"
shall be deemed to have the same value as the Common Shares on such
date.
(b) In case the Company shall fix a record date for the issuance
of rights (other than the Rights), options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Shares, or shares having the
same rights, privileges and preferences as Common Shares ("equivalent common
shares"), or securities convertible into Common Shares or equivalent
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<PAGE> 17
common shares at a price per Common Share or per equivalent common share, or
having a conversion price per share, if a security convertible into Common
Shares or equivalent common shares, less than the current per share market
price of the Common Shares (as determined pursuant to Section 11(d)) 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
Common Shares outstanding on such record date plus the number of Common Shares
which the aggregate offering price of the total number of Common Shares and/or
equivalent common 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 Common Shares outstanding on such record date plus the number of additional
Common Shares and/or equivalent common shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in
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 the holders of Rights. Common 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 or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that
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 Common Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash or assets (other
than a regular quarterly cash dividend out of the earnings or retained earnings
of the Company or a dividend payable in Common Shares but including a dividend
payable in stock other than Common Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price of the Common
Shares (as determined pursuant to Section 11(d)) 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 the holders of the
Rights) of the portion of the cash, assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants applicable to one
Common Share and the denominator of which shall be such current per share
market price of the Common Shares. 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 that would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder (other than
computations made pursuant to Section 11(a)(iii) hereto, the "current per share
market price" of the Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such
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<PAGE> 18
Common Shares for the twenty (20) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "current per share
market price" of Common Shares on any date shall be deemed to be the average of
the daily closing prices per share of such Common Shares for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the current per share market price of the Common Shares
is determined during a period following the announcement by the issuer of such
Common Shares of (1) a dividend or distribution on such Common Shares payable
in such Common Shares or securities convertible into such Common Shares (other
than the Rights), or (2) any subdivision, combination or reclassification of
such Common Shares, and prior to the expiration of twenty (20) Trading Days, or
ten (10) Trading Days, as set forth above, 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 take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way, or,
in case no such 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 Common Shares 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 United States national securities exchange
on which the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any United States national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the United States over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use, or, if on any
such date the Common Shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a United States
professional market maker making a market in the Common Shares selected by the
Board of Directors of the Company. If on any such date no such market maker is
making a market in the Common Shares, the fair value of the Common Shares on
such date as determined in good faith by the Board of Directors of the Company
shall be used. The term "Trading Day" shall mean a day on which the principal
United States national securities exchange on which the Common Shares are
listed or admitted to trading is open for the transaction of business or, if
the Common Shares are not listed or admitted to trading on any United States
national securities exchange, a Business Day. If the Common Shares are not
publicly held or not so listed or traded, "current per share market price"
shall mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments that by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one ten-thousandth of a Common Share or other
share, as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section
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<PAGE> 19
11 shall be made no later than the earlier of (i) three (3) years from the date
of the transaction which mandates such adjustment or (ii) the Final Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other
than Common 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 shares contained in Section 11(a), (b), (c), (e), (g), (h),
(i), (j), (k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Common 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 Common Shares
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
Common Shares obtained by (i) multiplying (x) the number of Common Shares
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares 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 Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten- thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least ten (10) days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights on such record date
Right Certificates evidencing, subject to Section 14, 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,
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<PAGE> 20
new Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of Common Shares 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 Common Shares that were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the Common
Shares issuable upon exercise of the Rights, the Company shall take any
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Common 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
the Common Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Common 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 in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Shares, (ii) issuance wholly for cash of any Common
Shares at less than the current market price, (iii) issuance wholly for cash of
Common Shares or other securities that by their terms are convertible into or
exchangeable for Common Shares, (iv) dividends on Common Shares payable in
Common Shares or (v) issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of its
Common Shares shall not be taxable to such Shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof, (ii) merge with or into or engage in a share exchange with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereto, or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 25% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its
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<PAGE> 21
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereto, if (x) at the time of or immediately after such consolidation,
merger, share exchange or sale there are any rights, warrants, or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger, share exchange or sale, the shareholders of
the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it shall not, except as permitted by Section 23, Section 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution Date consolidate with, or merge with or into, any
other Person for the primary purpose of a change of domicile of the Company,
and, in connection with such consolidation or merger, all of the outstanding
Common Shares shall be changed into or exchanged for Common Shares of the
surviving corporation of such consolidation or merger (the "Surviving
Corporation"), then proper provision shall be made so that Rights shall be
associated with each Common Share of the Surviving Corporation, except as
provided in Section 7(e) hereof, such that the number of Rights associated with
each Common Share of the Surviving Corporation following any such event shall
equal the result obtained by multiplying the number of Rights associated with
each Common Share immediately prior to such event by a fraction the numerator
of which shall be the total number of Common Shares outstanding immediately
prior to the occurrence of the event and the denominator of which shall be the
total number of Common Shares of the Surviving Corporation which the Common
Shares were changed into or exchanged for pursuant to the consolidation or
merger. Following such a consolidation or merger, this Agreement shall remain
in effect and all references to the Company shall be deemed to be references to
the Surviving Corporation.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 or 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares a
copy of such certificate and (c) mail a brief summary thereof to each holder of
record of a Right Certificate (or, if prior to the Distribution Date, to each
holder of record of a certificate representing Common Shares) in accordance
with Section 25. The Rights Agent shall be fully protected in relying on such
certificate and on any adjustment contained therein and shall not be deemed to
have knowledge of any adjustment unless and until it shall have received such
certificate.
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<PAGE> 22
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof, and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall engage in a share exchange with or
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such share exchange,
consolidation or merger and, in connection with such share exchange,
consolidation or merger, all or part of the outstanding Common Shares shall be
changed into or exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof), then, and in each such case proper
provision shall be made so that
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and issued,
fully paid,nonassessable and freely tradeable Common Shares of the
Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of call, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of Common
Shares for which a Right was exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the Purchase Price in effect immediately prior to
the first occurrence of a Section 11(a)(ii) Event by the number of
Common Shares for which a Right was exercisable immediately prior to
such first occurrence of a Section 11(a)(ii) Event and (2) dividing
that product (such product following the first occurrence of a Section
13 Event shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by 50% of the current per
share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11(d)) on the date of consummation of
such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following
the first occurrence of a Section 13 Event;
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<PAGE> 23
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of Common Shares)
in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights; And
(v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
If, in the case of a transaction of the kind described in clause (z)
of the first sentence of this Section 13(a), the Person or Persons to whom
assets or earning power are sold or otherwise transferred are individuals, then
the preceding sentences of this Section 13(a) shall be inapplicable, and the
Company shall require as a condition to such sale of transfer that such Person
or Persons pay to each holder of a Right Certificate, upon its surrender to the
Rights Agent and in exchange therefor (without requiring payment by such
holder), cash in the amount determined by multiplying the then current Purchase
Price by the number of Common Shares for which a Right is then exercisable.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities for or into which Common Shares of the
Company are converted in such share exchange, merger or consolidation,
and if no securities are so issued, the Person that is the other party
to such merger or consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized shares of
common stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any such Section 13 Event, the
Principal Party will
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<PAGE> 24
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights
under the securities or blue sky laws of such jurisdictions as may be
necessary or appropriate and
(iii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
share exchanges, mergers or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the first
occurrence of a Section 11(a) (ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Right Certificates that 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 other-wise 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 United States 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 United States securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the United States 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 United States professional market maker making a market in the
Rights selected by the Board of Directors of the Company. 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 of Directors of
the Company shall be used.
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<PAGE> 25
(b) The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to issue certificates that evidence
fractions of Common Shares. In lieu of fractional interests in Common Shares,
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 Common Share. For
purposes of this Section 14(b), the current market value of a Common Share
shall be the closing price of a Common Share (as determined pursuant to Section
11(d) hereof for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares (except as provided by this Section 14) upon exercise of a Right.
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section. 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
(c) subject to Section 6 and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by anyone
other than the
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<PAGE> 26
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to Section 7(e), shall be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
SECTION 17. 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 Common Shares or any
other securities of the Company that 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), 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. (a) The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
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<PAGE> 27
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. 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.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name, and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity or existence of any Acquiring
Person and the determination of "current per share market price") be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the chairman of the board,
the president, any vice president, the secretary, an assistant secretary or the
treasurer 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.
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<PAGE> 28
(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 adjustment required under the provisions of
Section 11 or Section 13 or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would
require any such 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
Common Shares to be issued pursuant to this Agreement or any Right Certificate
or as to whether any Common Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the chairman of the board, the president, any vice president, the
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 to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
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
Person.
(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
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<PAGE> 29
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 or 2 thereof,
the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
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 60 days notice in writing mailed to the Company and to each
transfer agent of the Common Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 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 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 holder of record 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 any state of the
United States so long as such corporation is authorized to do business as a
banking institution, is in good standing, is authorized under such laws to
exercise corporate trust powers, and is subject to supervision or examination
by federal or state authority, and 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; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice with the
predecessor Rights Agent and each transfer agent of the Common Shares, and mail
a notice thereof in writing to the holders of record of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made
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<PAGE> 30
in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Common Shares so issued or sold (i) pursuant
to the exercise of stock options or under any employee plan or arrangement,
(ii) pursuant to the Offers, or (iii) upon the exercise, conversion or exchange
of securities hereinafter issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that(i) no such
Right Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or to the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustments shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (i) the Close of Business on the tenth
calendar day following the Shares Acquisition Date (or, if the Shares
Acquisition Date occurred prior to the Record Date, the Close of Business on
the tenth calendar day following such Record Date) or (ii) the Close of
Business on the Final Expiration Date, redeem all, but not less than all, of
the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided, however, that if
such authorization occurs on or after the date of a change (resulting from a
proxy or consent solicitation) in a majority of the directors in office at the
commencement of such solicitation, and any Person who is or was a participant
in such solicitation has stated (or if upon the commencement of such
solicitation, a majority of the Board of Directors of the Company has
determined in good faith) that such Person (or any of its Affiliates or
Associates) has taken or intends to take, or may consider taking, any action
that would result in such Person becoming an Acquiring Person or that would
cause the occurrence of a Triggering Event (the existence of the circumstances
described in this proviso being referred to herein as an "Adverse Change of
Control"), then the Rights may be so redeemed only if there are Continuing
Directors (as hereinafter defined) in office and such redemption is authorized
by a majority of such Continuing Directors. Notwithstanding the foregoing, in
the event payment of the Redemption Price to a holder of Rights would result in
the payment of an amount not equal to $.01 or an integral multiple of $.01, the
amount to be paid shall be rounded upward to the next $.01. "Continuing
Director" shall mean (i) any member of the Board of Directors of the Company
who, while such person is a member of the Board, is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and was a member of the
Board prior to the Record Date, or (ii) any Person who subsequently becomes a
member of the Board who, while such Person is a member of the Board, is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, if
such Person's nomination for election or election to the Board is recommended
or approved by a majority of the Continuing Directors. Notwithstanding
anything contained in this Agreement to the contrary,
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<PAGE> 31
the Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption set forth
in the first sentence of this Section 23(a) has expired. The Company, may, at
its option, pay the Redemption Price in cash (whether in United States dollars
or in such other currency or currencies as the Board of Directors may
determine), Common Shares (based on the current market price per share at the
time of redemption) or any other form of consideration deemed appropriate by
the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) days after action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Shares. Any notice that is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 and 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 of Directors of the Company 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 7(e) hereof) for
Common Shares, each Right being exchangeable for one Common Share,
appropriately adjusted to reflect any transaction specified in Section 11(a)(i)
occurring after the date hereof (such number of Common Shares issuable in
exchange for one Right being referred to herein as the "Exchange Shares").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than any Exempt
Person), 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 of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive the Exchange Shares. 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 that is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Common Shares for Rights will be effected and, in the
event of any partial exchange, the
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<PAGE> 32
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof held by each
holder of Rights.
(c) In 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 action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights or shall take such other action
specified in Section 11(a)(iii) hereof.
(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 subsection (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 and third sentences of Section 11(d) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS. (a) In case the Company
shall propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of its Common Shares or to make
any other distribution to the holders of its Common Shares (other than a
regular quarterly cash dividend) or (ii) to offer to the holders of its Common
Shares rights or warrants to subscribe for or to purchase any additional Common
Shares or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Common Shares (other
than a reclassification involving only the subdivision of outstanding Common
Shares), or (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other transfer),
in one or more transactions, of 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions, each of which complies with Section 11(o) hereof), or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action that shall
specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of the Common
Shares for purposes of such action, and in the case of any such other action,
at least twenty (20) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common
Shares, whichever shall be the earlier.
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<PAGE> 33
(b) In case a Triggering Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) or Section 13 and (ii)
all references in the preceding paragraph to Common Shares shall be deemed
thereafter to refer to Common Shares and/or other securities, if appropriate.
The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote on any such action.
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:
Mountasia Entertainment International, Inc.
5895 Windward Parkway, Suite 220
Alpharetta, Georgia 30202
Attention: L. Scott Demerau
President and Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
2 Broadway
New York, New York 10004
Attention: Compliance Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate (or,
if prior to the Distribution Date, to the holder of certificates representing
Common Shares) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the earliest of
(i) the Distribution Date, (ii) the occurrence of a Triggering Event or (iii)
an Adverse Change of Control, the Company may and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement
(including supplements or amendments that may be deemed to affect the interests
of the holders of Right Certificates adversely) without the approval of any
holders of certificates representing Common Shares and associated Rights. From
and
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<PAGE> 34
after the earliest of (i) the Distribution Date, (ii) the occurrence of a
Triggering Event or (iii) an Adverse Change of Control, the Company may and the
Rights Agent shall, if the Company so directs (upon approval of a majority of
the Continuing Directors then in office), supplement or amend this Agreement
without the approval of any holders of Right Certificates (x) in any manner
that will not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person), or (y) in order to cure any ambiguity or to correct
or supplement any provision contained herein which, in the good faith
determination of a majority of the Continuing Directors then in office, may be
defective or inconsistent with the other provisions contained herein, or (z) to
shorten or lengthen any time and after the earliest of (i) the Distribution
period hereunder; provided, however, that, from Adverse Change of Control this
Date, (ii) the occurrence of a Triggering Event, or (iii) an Adverse Change of
Control, this Agreement shall not be supplemented or amended to lengthen (A) a
time period relating to when Agreement shall not be supplemented or amended to
lengthen then redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or, the benefits to, the holders of Rights (other than an Acquiring Person
or any Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an officer of the Company or, so long as any Person is an
Acquiring Person hereunder, the Continuing Directors that states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, but
subject to the next succeeding paragraph, no supplement or amendment shall be
made that changes the Redemption Price, accelerates the Final Expiration Date,
changes the Purchase Price, or changes the number of Common Shares for which a
Right is exercisable without the approval of a majority of the Continuing
Directors then in office. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Shares.
Notwithstanding anything contained in this Agreement to the contrary,
in the event that at any time after the date of this Agreement the Company
authorizes one or more series of preferred stock, then this Agreement may be
amended or supplemented as the Board of Directors shall deem necessary or
advisable (upon approval of the Continuing Directors then in office), without
the approval of any holders of Right Certificates, to provide for the issuance
of shares (or fractional shares) of preferred stock of the Company in place of
Common Shares which may be received upon exercise of Rights hereunder prior to
the occurrence of any Triggering Event, and to modify or amend this Agreement
in any respect to take into account the use of such preferred stock (or
fractional shares of preferred stock) in place of such Common Shares.
SECTION 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of
which any person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
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<PAGE> 35
under the Exchange Act. The Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board (with,
where specifically provided for herein, the Continuing Directors) or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors of the Company (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y) not
subject the Board or the Continuing Directors to any liability to the holders
of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any person or corporation other than
the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common 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 registered holders of the Common Shares).
SECTION 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing
the invalid language of this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the Board of
Directors.
SECTION 32. GOVERNING LAW. This Agreement, each Right and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Georgia and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts to
be made and performed entirely within such state.
SECTION 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
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<PAGE> 36
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC.
Attest: By: /s/ L. Scott Demerau
------------------------------------
Name: L. Scott Demerau
-----------------------------------
Title: President
----------------------------------
By: /s/ Ann Travis
-----------------------
Name: Ann Travis
----------------------
Title: V. P. Finance
---------------------
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Attest: By: /s/ William F. Seegraber
-------------------------------------
Name: William F. Seegraber
-----------------------------------
Title: Vice President
----------------------------------
By: /s/ Thomas Jennings
------------------------
Name: Thomas Jennings
-----------------------
Title: Assistant Secretary
----------------------
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Exhibit A
[Form of Right Certificate]
Certificate No. R- _________________ Rights
NOT EXERCISABLE AFTER APRIL 24, 2006 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED
BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
AN ASSOCIATE OF AN ACQUIRING PERSON. THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.] (1)
Right Certificate
Mountasia Entertainment International, Inc.
This certifies that _______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of April 24, 1996 (the "Rights
Agreement"), between Mountasia Entertainment International, Inc., a Georgia
corporation (the "Company"), and Continental Stock Transfer & Trust Company
(the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 P.M. (New York, New York time) on April 24, 2006 at the office of the
Rights Agent designated for such purpose, or at the office of its successors as
Rights Agent, one share of common stock, no par value per share (the "Common
Shares"), of the Company, fully paid and nonassessable (or in certain
circumstances, cash, property or other securities of the Company), at a
purchase price of $12.50 per Common 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 Common Shares which may be purchased upon exercise thereof set forth
above, and the Purchase Price
____________________
(1)The portion of the legend shall be modified to apply to an Acquiring
Person as applicable and shall replace the preceding sentence.
A-1
<PAGE> 38
set forth above, are the number and Purchase Price as of May 6, 1996 based on
the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of Common Shares or other securities that may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events, including Triggering Events
(as such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates.
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, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may, but are not required to, be redeemed by the
Company at a redemption price of $.01 per Right, payable in cash, Common Shares
or any other form of consideration deemed appropriate by the Company's Board of
Directors.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a 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 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.
A-2
<PAGE> 39
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _____________________.
Mountasia Entertainment International, Inc.
By:
----------------------------------------
Attest:
By:
-------------------------
Countersigned:
Continental Stock Transfer & Trust Company
By:
-------------------------
Authorized Officer
A-3
<PAGE> 40
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
To be executed by the registered holder if such holder desires to transfer the
Right Certificates)
FOR VALUE RECEIVED_____________________________________________________
______________________ hereby sells, assigns and transfers unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ,
------------------- ---------------
-------------------------
Signature
Signature Guaranteed:
-----------------------------
A-4
<PAGE> 41
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person.
Dated: ,
--------------------------- ---------------
--------------------------
Signature
Signature Guaranteed:
-----------------------------
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-5
<PAGE> 42
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right Certificate)
To: Mountasia Entertainment International, Inc.
The undersigned hereby irrevocably elects to exercise
_______________________________ Rights represented by this Right Certificate to
purchase the Common Shares issuable upon the exercise of such Rights (or such
other securities of the Company or of any other person which may be issuable
upon exercise of the Rights) and requests that certificates for such securities
be issued in the name of and delivered to:
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
(Please insert social security or other identifying 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)
- --------------------------------------------------------------------------------
(Please insert social security or other identifying number)
Dated: ,
------------------- ---------------
-----------------------------
Signature
Signature Guaranteed:
--------------------------------------
A-6
<PAGE> 43
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) Rights evidenced by this Rights Certificate are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Per,on.
Dated: ,
------------------- ---------------
--------------------------
Signature
Signature Guaranteed:
--------------------------------------
NOTICE
The signatures in the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
- --------------------------------------------------------------------------------
WARNING
In the event the Certificate set forth above in the Assignment and
Election to Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate of such Acquiring Person (as defined in the
Rights Agreement), and such Assignment or Election to Purchase will not be
honored.
A-7
<PAGE> 44
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
The Board of Directors of Mountasia Entertainment International, Inc.
(the "Company") has declared a dividend distribution of one common stock
purchase right (the "Rights") for each outstanding share of common stock, no
par value per share (the "Common Shares"), of the Company, to shareholders of
record at the close of business on May 6, 1996 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one Common Share
(or in certain circumstances, cash, property or other securities of the
Company) at a purchase price of $12.50, subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and Continental Stock
Transfer & Trust Company, the Rights Agent. Capitalized terms used but not
otherwise defined herein shall have the meaning given such terms in the Rights
Agreement.
Initially, the Rights will be evidenced by the certificates
representing Common Shares then outstanding, no separate Right Certificates
will be distributed and the Rights will not be tradeable separate from the
Common Shares. The Rights will become exercisable and will separate from the
Common Shares upon the earlier of (i) ten calendar days after a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired beneficial ownership of 20% or more of the
outstanding Common Shares (the "Shares Acquisition Date") or (ii) ten business
days (or a later date as determined by the Board of Directors or, if there has
been an Adverse Change of Control, by a majority of the Continuing Directors
(as such terms are herein defined)) after the commencement of, or first public
announcement of an intention to commence, a tender offer or exchange offer that
would result in a person or group beneficially owning 20% or more of the
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Share certificates and will be transferred with and only with such
Common Share certificates, (ii) new Common Share certificates issued after the
Record Date will contain in accordance with the Rights Agreement a notation
incorporating the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on April 24, 2006, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Right Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date, and thereafter, the separate Right
Certificates alone will represent the Rights. Except as otherwise provided by
the Rights Agreement or determined by the Board of Directors, only Common
Shares issued prior to the Distribution Date will be issued with Rights.
B-1
<PAGE> 45
In the event that a person becomes an Acquiring Person, each holder of
a Right will thereafter have the right to receive, upon exercise, Common Shares
(or in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price of the Right.
Notwithstanding the foregoing, following the occurrence of such an event or any
other Triggering Event (as defined below), all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
After the Shares Acquisition Date, in the event that (i) the Company
consolidates, or merges with, any other person, and the Company is not the
surviving corporation, (ii) any person engages in a share exchange,
consolidation or merger with the Company where the outstanding Common Shares of
the Company are exchanged for securities, cash or property of the other person
and the Company is the surviving corporation, or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, proper provision will
be made so that each holder of a Right will thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the Purchase Price of the Right. The events set forth in
this paragraph and the preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable, and the number of Common Shares or other
securities, cash or property issuable, upon exercise of the Rights are subject
to customary adjustments from time to time to prevent dilution in the event of
certain changes in the shares of the Company. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
amount to an increase or decrease of at least 1% in the Purchase Price. The
Company may determine not to issue fractional Rights or shares, and in lieu
thereof, an adjustment in cash will be made based on the market value of the
Rights or shares on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (subject to adjustment), at any time before
the close of business on the tenth calendar day following the Shares
Acquisition Date; provided, however, that if the authorization to redeem the
Rights occurs on or after the date of a change in a majority of the Board of
Directors of the Company as a result of a proxy or consent solicitation and a
person who was a participant in such solicitation has stated that such person
(or any of its Affiliates or Associates) has taken or intends to take or may
consider taking actions that would result in such person becoming an Acquiring
Person or cause the occurrence of a Triggering Event (the existence of these
circumstances being an "Adverse Change of Control"), then the redemption of the
Rights will require the approval of a majority of the Continuing Directors.
Immediately upon the action of the Board of Directors ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the redemption price.
"Continuing Director" means (i) any member of the Board of Directors
of the Company, while such person is a member of the Board, who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such
B-2
<PAGE> 46
Affiliate or Associate, and was a member of the Board prior to the Record Date,
or (ii) any person who subsequently becomes a member of the Board who, while
such person is a member of the Board, is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by
a majority of the Continuing Directors.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by any person of 50% or more of the outstanding Common Shares,
the Board of Directors of the Company may exchange the then outstanding and
exercisable Rights (other than Rights owned by an Acquiring Person, which will
have become null and void), in whole or in part, for Common Shares, each Right
being exchangeable for one Common Share, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the earliest of (i) the Distribution
Date, (ii) a Triggering Event or (iii) an Adverse Change of Control. After the
first to occur of such events, the provisions of the Rights Agreement may be
amended with the approval of a majority of the Continuing Directors in order
(x) to make changes that do not adversely affect the interests of holders of
the Rights (other than the interests of any Acquiring Person), (y) to cure any
ambiguity or correct or supplement any provision which may be defective or
inconsistent with other provisions contained in the Rights Agreement, or (z) to
shorten or lengthen any time period under the Rights Agreement, but after (i)
the Distribution Date, (ii) a Triggering Event or (iii) an Adverse Change of
Control, no time period relating to redemption of the Rights may be lengthened
so as to make the Rights redeemable at a time at which the Rights had not then
been redeemable and no other time period may be lengthened unless for the
purpose of protecting, enhancing or clarifying the rights or benefits of
holders of the Rights,
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being
acquired. Accordingly, the existence of the Rights may deter certain acquirors
from making takeover proposals or tender offers. However, the rights plan
helps ensure that the Company's shareholders receive fair and equal treatment
in the event of any proposed takeover of the Company. The adoption of the plan
is not in response to any specific takeover threat or proposal, but is a
precaution taken to protect the rights of the Company's shareholders.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A.
Once the Rights are issued, a copy of the Rights Agreement will be available to
registered holders of the Rights upon written request free of charge from the
Rights Agent. This summary description of the Right does not purport to be
complete and is qualified in its entirety by reference to the Right Agreement,
which is incorporated herein by reference.
B-3
<PAGE> 1
EXHIBIT 2
NEWS RELEASE
FOR: MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC.
FOR FURTHER INFORMATION CONTACT:
Gregory N. Waters
Executive Vice President
Chief Financial Officer
(770) 442-6640
Margaret Schaeffer
Investor Relations
(770) 442-6640
FOR IMMEDIATE RELEASE
MOUNTASIA ENTERTAINMENT INTERNATIONAL, INC
DECLARES DIVIDEND DISTRIBUTION
OF COMMON SHARE PURCHASE RIGHTS
ATLANTA, GEORGIA, APRIL 25, 1996 - Mountasia Entertainment
International, Inc. (NASDAQ/NMS: FUNN) announced today that the Board of
Directors have declared a dividend distribution of one Common Share Purchase
Right on each outstanding share of its common stock
Mr. L. Scott Demerau, Chief Executive Office of Mountasia Entertainment
International, Inc., stated: "The Rights are designed to assure that all of the
Mountasia's shareholders receive fair and equal treatment in the event of any
proposed takeover of the Company and to guard against partial tender offers,
open market accumulations and other hostile tactics to gain control of
Mountasia Entertainment International, without paying all shareholders the
full value of their investment."
The Rights will be exercisable only if a person or group acquires 20%
or more of Mountasia Entertainment International's common stock or announces a
tender offer the consummation of which would result in ownership by a person or
group of 20% or more of the common stock. Each Right will entitle shareholders
to buy one share of common stock at an exercise price of $12.50.
If Mountasia Entertainment International is acquired in a merger or
other business combination transaction after a person has acquired 20% or more
of the Company's outstanding common stock, each Right will entitle its holder
to purchase, at the Right's then-current exercise price, a number of the
acquiring company's common stock shares having a market value of twice such
price. In addition, if a person or group acquires 20% or more of Mountasia
Entertainment International's outstanding common stock, each Right will
entitle its holder (other than such person or members of such group) to
purchase, at the right's then-current exercise price, a number of Mountasia
Entertainment International's common shares having market value of twice such
price.
Following the acquisition by a person or group of beneficial ownership
of 20% or more of the Company's common stock and prior to an acquisition of 50%
or more of the common stock, the Board of Directors may exchange the Rights
(other than Rights owned by such person or group), in whole or in part, at an
exchange ratio of one common stock per Right.
<PAGE> 2
Prior to the acquisition by a person or group of beneficial ownership
of 20% or more of the Company's common stock (and for ten days thereafter), the
rights are redeemable for one cent per Right at the option of the Board of
Directors.
The Board of Directors is also authorized to reduce the 20% thresholds
referred to above to no less than 10%.
Mr. Demerau further commented, "The Rights are intended to enable all
Mountasia Entertainment International, Inc. shareholders to realize the
long-term value of their investment in the Company. They will not prevent a
takeover; however, they should encourage anyone seeking to acquire the Company
to negotiate with the Board prior to attempting a takeover."
The dividend distribution will be made on May 6, 1996, payable to
shareholders of record on that date. The Rights will expire on May 6, 2006.
The Rights distribution is not taxable to shareholders.
Headquartered in Atlanta, Georgia, Mountasia Entertainment
International, Inc., is a leader in the family entertainment center industry,
with 53 company owned or licensed family fun centers located in the United
States and four other countries. Mountasia has been publicly traded since
November, 1993.
###
<PAGE> 1
EXHIBIT 3
[MOUNTASIA
ENTERTAINMENT
INTERNATIONAL, INC. LOGO]
May 3, 1996
To Our Shareholders:
Your Board of Directors has declared a dividend distribution of Common
Share Purchase Rights ("Rights"). This letter describes the Share Purchase
Rights Plan and the Board's reasons for adopting it.
These Rights contain provisions to protect shareholders in the event of
an unsolicited attempt to acquire the Company, including a graudal accumulation
of shares in the open market, a partial or two-tier tender offer that does not
treat all shareholders equally, a squeeze-out merger and other abusive takeover
tactics which the Board believes are not in the best interests of shareholders,
or may deprive them of the full value of their shares.
Many of this country's most respected corporations have issued rights
to protect their shareholders against these tactics. We consider the Rights to
be the best available means of protecting both your right to retain your equity
investment in Mountasia Entertainment International, Inc. and the full value of
that investment, while not prohibiting a fair acquisition bid for the Company.
The Rights are not intended to prevent a takeover of the Company and
will not do so. However, they should deter any attempt to acquire the Company
in any manner or on terms not approved by the Board. The Rights approved by
the Board are designed to deal with the very serious problem of another person
or company using abusive tactics to deprive Mountasia Entertainment
International Inc.'s Board and its shareholders of any real opportunity to
determine the destiny of the Company.
Until the tenth day following a public announcement that a single
acquirer or group has acquired beneficial ownership of 20% or more of the
Company's shares, the Rights may be redeemed by the Board of Directors for one
cent per Right. Thus, the rights should not interfere with any merger or
business combination approved by the Board of Directors prior to that time.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plan. The issuance of
the Rights has no dilutive effect, will not affect reported earnings per share,
is not taxable to the Company or to
<PAGE> 2
shareholders, and will not change the way in which you can presently trade the
Company's shares. As explained, in detail below, the Rights will only be
exercisable if and when the problem arises which they were created to address.
Your Board was aware when it acted that some people have advanced
arguments that securities of the sort we are issuing deter legitimate
acquisition proposals. We carefully considered these views and concluded that
the arguments are speculative and do not justify leaving shareholders without
protection against unfair treatment by an acquirer who, after all, is seeking
his own advantage, not yours. Your Board believes that these Rights represent
a sound and reasonable means of addressing the complex issues of corporate
policy created by the current takeover environment.
The Rights will be issued on May 6, 1996, to shareholders of record
on that date and will expire in ten years. Initially, the Rights will not be
exercisable, certificates will not be sent to you, and the Rights will
automatically trade with the common shares. However, ten days after a person or
a group acquires 20% or more of the Company's shares, or ten days (or such later
date as may be determined by the Board prior to a person or group
acquiring 20% or more of the Company's shares) after a person or group
announces an offer the consummation of which would result in such person or
group owning 20% or more of the shares (even if no purchases actually occur),
the Rights will become exercisable and separate certificates representing the
Rights will be distributed. We expect that the Rights will begin to trade
independently from the Company's shares at that time. At no time will the
Rights have any voting power.
When the Right first become exercisable, unless a person has acquired
20% or more of the Company's shares, a holder will be entitled to buy from the
Company one share of common stock for $12.50. If any person or group acquire
20% or more of the Company's outstanding common stock, a "flip-in" provision of
the Rights will be triggered and the Rights will entitle the holder (other than
such person or any member of such group which has acquired 20% or more of the
Company's shares) to buy a number of additional shares of common stock of the
Company having a market value of twice the exercise price of each Right. Thus,
if at the time of the 20% acquisition the Company's stock were to have a market
value per share equal to $6.25, the holder of each Right (other than such person
or any member of such which has acquired 20% or more of the Company's shares)
company would be entitled to receive approximately two shares of the Company's
common stock for $12.50.
If the Company is involved in a merger or other business combination at
any time after a person or group has acquired 20% or more of the Company's
shares, the "flip-over" provision of the Right will be triggered and the Rights
will entitle a holder to buy a number of shares of common stock of the
acquiring company having a market value of twice the exercise price of each
Right. For example, if at the time of the business combination the acquiring
company's stock has a per share value of $12.50, the holder of each Right would
be entitled to receive two shares of acquiring company's common stock for
$12.50, i.e. at a 50% discount.
<PAGE> 3
Following the acquisition by any person or group of 20% or more of the
Company's common stock, but only prior to the acquisition by a person or group
of a 50% stake, the Board of Directors will also have the ability to exchange
the Rights (other than Rights held by such person or group), in whole or in
part, for one share of common stock per Right. This provision will have an
economically dilutive effect on the acquirer, and provide a corresponding
benefit to the remaining rightsholders, that is comparable to the flip-in
without requiring rightsholders to go through the process and expense of
exercising their Rights.
While, as noted above, the distribution of the Rights will not be
taxable to shareholders or the Company, shareholders may recognize taxable
income upon the occurrence of certain subsequent events.
In declaring the Rights dividend, we have expressed our confidence in
the future of Mountasia and our determination that you, our shareholders, be
given every opportunity to participate fully in that future.
Sincerely,
/s/ L. Scott Demerau
---------------------------
L. Scott Demerau
Chief Executive Officer and
President
