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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 (g) of the
Securities Exchange Act of 1934
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MONTEREY PASTA COMPANY
(Exact Name of Registrant as Specified in Charter)
CALIFORNIA 77-0227341
(State or Other Jurisdiction (IRS Employer Identification Number)
of Incorporation)
353 Sacramento Street, Suite 500
San Francisco, CA 94111
(Address of Principal Executive Offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box. / /
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. / /
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
SHARE PURCHASE RIGHTS
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Item 1. Description of Registrant's Securities to be Registered
Pursuant to an agreement dated as of May 15, 1996 (the "Rights
Agreement"), between Monterey Pasta Company (the "Company") and Corporate Stock
Transfer, as Rights agent (the "Rights Agent"), the Company declared a dividend
of one right (a "Right") for each outstanding share of common stock of the
Company (the "Common Shares"). The dividend is payable on May 20, 1996 (the
"Record Date") to the shareholders of record on that date. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is attached hereto as
an Exhibit 4.
Initially, the Rights will be attached to all certificates
representing the Common Shares then outstanding, and no separate certificates
representing Rights will be distributed. The Rights will not be exercisable
until the "Distribution Date." The Distribution Date is the earlier of (i)the
date any person owns 20% or more of the outstanding shares, or (ii)ten days
after any person commences a tender or exchange offer that would result in the
acquisition of 20% or more of the outstanding shares. Any person that reaches
the 20% threshold is defined as an "Acquiring Person." After the Distribution
Date, the Rights shall be evidenced by separate certificates, shall trade
separately from the Common Shares and shall be exercisable by any holder
thereof.
If any person becomes an Acquiring Person (other than through a
Permitted Offer, as defined below), the holder of a Right will have 60 days to
purchase at the Purchase Price as defined in the Rights Agreement additional
Common Shares ("Adjustment Shares") (the number of shares that can be purchased
is equal to the number of rights multiplied by a factor, which is obtained by
dividing the Purchase Price by 1/2 the current market price of the Company
stock); and upon the occurrence of certain mergers following a person's having
become an Acquiring Person, a Rights holder can purchase, at the Purchase Price,
shares of the acquirer or surviving corporation (the number of shares that can
be purchased is equal to the number of rights multiplied by a factor, which is
obtained by dividing the Purchase Price by 1/2 the current market price of the
Acquiring Person's stock). The Acquiring Person will not be entitled to any
Rights.
If not exercised, the Rights will expire on the earliest of (i)
December 31, 2004, (ii) redemption by the Company, or (iii) consummation of a
Permitted Offer (full tender offer approved by a majority of outside directors)
on terms that are fair to shareholders. The Board of Directors may redeem the
Rights, at its discretion and in its judgment, at any time after the
Distribution Date and before an Acquiring Person becomes such by reaching 20%
ownership, and any time after an Acquiring Person ceases to be an Acquiring
Person due to a drop in share ownership below 20%.
At any time prior to the time that any person becomes an Acquiring
Person or December 31, 2004, the final expiration date of the Rights, the Board
of Directors of the Company may redeem all but not less than all the Rights at a
price of $0.001 per Right (the "Redemption Price"). Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
2.
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The terms of the Rights may be amended by the Board of Directors
of the Company without the consent of the holders of the Rights, including an
amendment prior to and after the Distribution Date, to change or supplement the
provisions of the Rights Agreement in any manner in which the Company may deem
necessary or desirable and which shall not adversely affect the interest of the
holders of Rights.
Until a Right is exercised, the holder of a Right will not, by reason
of being such a holder, have rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
ITEM 2. EXHIBITS.
No. Description
4. Rights Agreement between Monterey Pasta Company and Corporate Stock
Transfer dated as of May 15, 1996, including Form of Rights Certificate
attached thereto.
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this registration statement to be signed on its
behalf by the undersigned hereunto duly authorized.
MONTEREY PASTA COMPANY
(Registrant)
Date: May 23, 1996 By: /s/ DAVID J. MASSARA
-----------------------------------------
David J. Massara,
Chief Financial Officer
4
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MONTEREY PASTA COMPANY
RIGHTS AGREEMENT
MAY 15, 1996
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TABLE OF CONTENTS
Section Page
- - ------- ----
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 8
3. Issue of Rights Certificates. . . . . . . . . . . . . . . . . . . . . . 8
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . 10
5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . 11
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates. . . . . . . . 12
7. Exercise of Rights: Expiration Date of Rights; Purchase Price . . . . . 13
8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . 16
9. Reservation and Availability of Common Stock. . . . . . . . . . . . . . 17
10. Common Stock Record Date. . . . . . . . . . . . . . . . . . . . . . . . 19
11. Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12. Certificate of Adjusted Purchase Price or Number of Shares. . . . . . . 30
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. . 30
14. Additional Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . 36
15. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . 36
16. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
17. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . 39
18. Rights Certificate Holder Not Deemed a Stockholder. . . . . . . . . . . 39
19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . 40
20. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . 40
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
Section Page
- - ------- ----
21. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . 42
22. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . 45
23. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . 47
24. Redemption and Termination. . . . . . . . . . . . . . . . . . . . . . . 47
25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . . . . 49
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
27. Supplements and Amendments. . . . . . . . . . . . . . . . . . . . . . . 51
28. Determination and Actions by the Board of Directors, etc. . . . . . . . 52
29. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
30. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . . . . 53
31. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
32. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
33. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 54
Exhibit A -- Form of Rights Certificate
Exhibit B -- Summary of Rights to Purchase Common Stock of Monterey Pasta
Company
Exhibit C -- Form of Election to Purchase
<PAGE>
RIGHTS AGREEMENT
This Rights Agreement (the "Agreement"), dated as of May 15, 1996,
between Monterey Pasta Company, a California corporation (the "Company"), and
Corporate Stock Transfer (the "Rights Agent").
WHEREAS, on May 7, 1996, the Board of Directors of the Company authorized
and issued a distribution of one right for each share of common stock, no par
value, of the Company outstanding on May 20, 1996 (the "Record Date") ("Common
Stock"), and contemplates the issuance of one right (subject to adjustment) for
each share of Common Stock issued between the date hereof and the earlier of the
Distribution Date and the Expiration Date (as such terms are hereafter defined
in Section 1), each right representing the right to purchase one share of Common
Stock (as adjusted) upon the terms and subject to the conditions set forth
herein (the "Rights");
NOW, THEREFORE, in consideration of the premises and the material
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, except pursuant to a Permitted Offer (as such term is hereinafter
defined), shall be the Beneficial Owner (as such term is hereinafter defined) of
securities representing 20% or more of the Voting Power (as such term is
hereinafter defined) or who was such a Beneficial Owner at any
1.
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time after the date hereof, whether or not such Person continues to be the
Beneficial Owner of securities representing 20% or more of the Voting Power;
PROVIDED, HOWEVER, that
(i) in no event shall a Person who or which, together
with all Affiliates and Associates of such Person, is the Beneficial Owner of
less than 10% of the Company's outstanding shares of Common Stock become an
Acquiring Person solely as a result of a reduction of the number of shares of
outstanding Common Stock, including repurchases of outstanding shares of Common
Stock by the Company, which reduction increases the percentage of outstanding
shares of Common Stock beneficially owned by such Person; and
(ii) "Acquiring Person" shall not mean (A) any Person who
has purchased shares pursuant to a Permitted Offer (as such term is hereinafter
defined) made by such Person, (B) the Company, any Subsidiary of the Company (as
such term is hereinafter defined), any employee benefit plan of the Company or
any of its Subsidiaries or any entity holding securities of the company
organized, appointed or established by the Company or any of its Subsidiaries
for or pursuant to the terms of any such plan, or (C) a Person who becomes the
Beneficial Owner (as such term is hereinafter defined) of securities
representing 20% or more of the Voting Power (as such term is hereinafter
defined) as a result of exercising Rights pursuant to this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
2.
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(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates
or Associates has
(A) the right or obligation to acquire (whether
such right or obligation is exercisable or effective 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 these Rights), warrants or options, or otherwise;
PROVIDED, HOWEVER, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," securities tendered pursuant to a tender or exchange
offer made by such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or
(B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing); PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the Exchange Act
and (2) is not also then reportable by such person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
3.
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(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of this paragraph (c)) or disposing
of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of California 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.,
San Francisco, California time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., San Francisco, California
time, on the next succeeding Business Day.
(f) The "Closing Price" for any security shall be
(i) 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 principal national securities exchange on which such security is
listed or admitted to trading, or
(ii) if such security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National
4.
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Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use, or
(iii) if on any such date such security is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such security
selected by the Board of Directors of the Company. If on any such date no
market maker is making a market in such security, the fair value of such
security on such date as determined reasonably and with good faith by the Board
of Directors of the Company shall be used and shall be binding on the Rights
Agent.
(g) "Common Stock" shall mean the Common Stock, no par value,
of the Company, except that "Common Stock" when used with reference to stock
issued by any Person other than the Company shall mean the capital stock with
the greatest aggregate voting power with respect to, or the equity securities or
other equity interest having power to control or direct the management of, such
Person or, if such Person is a Subsidiary of another Person, with respect to or
of the Person which ultimately controls such first mentioned Person and which
has issued and outstanding such capital stock, equity securities or equity
interests.
(h) The "Distribution Date" shall mean the earlier of (i) the
Stock Acquisition Date or (ii) the tenth day after the date of the commencement
of, or first public announcement of the intent of any Person (other than the
Company, any Subsidiary of the Company, or any employee benefit plan of the
Company or any of its Subsidiaries) to commence (which intention to commence
remains in effect for five business days after such announcement) a tender or
exchange offer which would result in such Person becoming an
5.
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Acquiring Person, unless such date is extended by the Board of Directors of the
Company (such date shall be no later than the Stock Acquisition Date).
(i) "Expiration Date" shall have the meaning ascribed to it in
Section 7(a) hereof.
(j) "Final Expiration Date" shall mean the Close of Business on
December 31, 2004.
(k) A "Permitted Offer" shall mean an offer for shares of
Common Stock at a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the Company and who
are not representatives, nominees, Affiliates or Associates of an Acquiring
Person, after receiving advice from a recognized investment banking firm, to be
(i) fair and adequate to stockholders (taking into account all factors which
such members of the Board deem relevant including, without limitation, prices
which could reasonably be achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and (ii) otherwise in the best
interests of the Company and its stockholders, employees, customers, depositors
and communities in which the Company does business; PROVIDED, HOWEVER, that in
making such determination the Board of Directors shall only take into account
the interests of stockholders other than the Person or an Affiliate or Associate
thereof on whose behalf the offer is being made.
(l) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(m) "Purchase Price" shall have the meaning ascribed to it in
Sections 4 and 7(b).
6.
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(n) "Record Date" shall have the meaning ascribed to it in the
preamble to this Agreement.
(o) "Redemption Price" shall have the meaning ascribed to it in
Section 24(a)(i).
(p) "Rights" shall have the meaning ascribed to it in the
preamble to this Agreement.
(q) "Rights Certificates" shall have the meaning ascribed to it
in Section 3(c).
(r) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such or such date within ten (10) business days thereafter as
shall be determined by the Board of Directors of the Company in its sole
discretion.
(s) A "Subsidiary" or any "Subsidiaries" of any Person shall
mean any corporation or other entity of which a majority of the voting power of
the voting equity securities or voting interests is owned, directly or
indirectly, by such Person, or which is otherwise controlled by such Person.
(t) "Trading Day" shall mean a day on which the principal
national securities exchange on which any security is listed or admitted to
trading is open for the transaction of business or, if such security is not
listed or admitted to trading on any national securities exchange, a Business
Day.
(u) "Voting Power" shall mean the voting power of all
securities of the Company then outstanding generally entitled to vote for the
election of directors of the Company.
7.
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Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable. In the event the Company appoints one or more Co-Rights Agents, the
respective duties of the Rights Agents and any Co-Rights Agents shall be as the
Company shall determine.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date (or earlier redemption or
expiration of the Rights), (i) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for Common
Stock outstanding as of the date hereof registered in the names of the holders
of the Common Stock, together with the Summary of Rights (as defined in this
Section 3), and not by separate certificates, and (ii) the registered holders of
the Common Stock shall be the registered holders of the associated Rights, and
the certificates for Common Stock shall be deemed also to be certificates for
Rights. Until the Distribution Date (or earlier redemption or expiration of the
Rights), (x) the surrender for transfer of any of the certificates for the
Common Stock outstanding on the date hereof, even without a copy of the Summary
of Rights (as defined in this Section 3) attached thereto, shall also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate, (y) the Rights (and the right to receive certificates therefor)
will be transferable only in connection with the transfer of the underlying
shares of Common Stock, and (z) the rights cannot be exercised.
8.
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As soon as practicable following the date hereof, the Company will
send a copy of a Summary of Rights, in the form attached hereto as Exhibit B
(the "Summary of Rights"), by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the Close of Business on the Record Date, at
the address of such holder shown on the records of the Company.
(b) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
the Record Date, but prior to the earlier of the Distribution Date or the
Expiration Date (as such term is hereinafter defined), shall be deemed also to
be certificates for Rights, and shall have impressed, printed, stamped, written
or otherwise affixed onto them the following legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set forth in
a Rights Agreement between Monterey Pasta Company
and Corporate Stock Transfer, as Rights Agent, the
terms of which are incorporated herein by reference
and a copy of which is on file at the principal
offices of Monterey Pasta Company. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may expire, or may be
evidenced by separate certificates and will no
longer be evidenced by this certificate. Monterey
Pasta Company will mail to the holder of this
certificate a copy of the Rights Agreement without
charge within five days after receipt of a written
request therefor. Under certain circumstances,
Rights issued to Acquiring Persons (as defined in
the Rights Agreement) or certain related persons and
any subsequent holder of such Rights may become null
and void with respect to certain rights set forth in
the Rights Agreement.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such
9.
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certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
(c) As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a certificate for Rights, in substantially the form of Exhibit A hereto
(the "Rights Certificates"), evidencing one Right for each share of Common Stock
so held, all as more fully described in Section 4; PROVIDED, HOWEVER, that no
such Rights Certificates shall be issued in the name of, or distributed to, any
Acquiring Person or to any Affiliate or Associate of such Acquiring Person, and
the Rights associated with shares of Common Stock beneficially owned or held by
any of such persons as of the Stock Acquisition Date shall become null and void
on such Stock Acquisition Date. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates and will be
transferable only in connection with the transfer of the Rights Certificates.
Section 4. FORM OF RIGHTS CERTIFICATES. The Rights Certificates (and
the forms of assignment and of certification to be printed on the reverse
thereof) shall be substantially in the form set forth in Exhibit A hereto, and
the form of election to purchase shares shall be substantially in the form set
forth in Exhibit C, and each may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange
10.
<PAGE>
on which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 23 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date, and on
their face shall entitle the holders thereof to purchase such number of shares
of Common Stock as shall be set forth therein at the price per share set forth
therein (the "Purchase Price"), but the number of such shares and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, any
Vice Chairman of the Board, any President, Chief Executive Officer or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
11.
<PAGE>
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at one of its offices at 370 - 17th Street, #2350, Denver, Colorado
80202, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES. Subject
to the provisions of Section 15 hereof regarding fractional shares, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to purchase
a like number of shares of Common Stock as the Rights Certificate or Rights
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent and the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
12.
<PAGE>
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificates so lost, stolen, destroyed or
mutilated.
Section 7. EXERCISE OF RIGHTS: EXPIRATION DATE OF RIGHTS; PURCHASE
PRICE.
(a) The registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon presentation of
the Rights Certificate, with the appropriate form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the principal office
of the Rights Agent, together with payment of the Purchase Price for each share
of Common Stock (or such other number of shares or other securities) as to which
the Rights are exercised, at or prior to the earliest of (i) the Close of
Business on December 31, 2004 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 24 hereof, or (iii) the
consummation of a transaction contemplated by Section 13(f) hereof (such earlier
time being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock to be
purchased pursuant to the exercise of a Right shall initially be twenty-eight
dollars ($28.00), shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof and shall
13.
<PAGE>
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the appropriate form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares (or other
securities or property) to be purchased and an amount equal to any applicable
transfer tax payable in respect of certain transfers pursuant to Section 9(d),
in cash, or by certified check or bank draft payable to the order of the
company, the Rights Agent shall, subject to Section 21(k), thereupon promptly
(i)(A) requisition from any transfer agent of the shares
of Common Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the number of shares of Common Stock to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company, in its sole discretion, shall have elected to
deposit the shares of Common Stock issuable upon exercise of the Rights
hereunder into a depositary, requisition from the depositary agent depositary
receipts representing such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares of Common Stock represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with such
request,
(ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 15,
14.
<PAGE>
(iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, and
(iv) when appropriate, after receipt promptly deliver
such cash to or upon the order of the registered holder of such Rights
Certificate.
In the event that the Company is obligated to issue other securities of the
Company, and/or distribute other property pursuant to Section 11, the Company
will make all arrangements necessary so that such other securities and/or
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In the case of an exercise of the Rights by a holder solely
pursuant to Section 11(a)(ii), the Rights Agent shall return such Rights
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by such Rights
Certificate no longer include the rights provided by Section 11(a)(ii) of the
Rights Agreement, or, if less than all the Rights represented by such Rights
Certificate were so exercised, the Rights Agent shall indicate on the Rights
Certificate the number of Rights represented thereby which continue to include
the rights provided by Section 11(a)(ii).
In case the registered holder of any Rights Certificate shall exercise
(except pursuant to Section 11(a)(ii)) less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Rights Certificates or to his duly authorized assigns,
subject to the provisions of Section 15 hereof regarding fractional shares.
15.
<PAGE>
(e) Notwithstanding anything in this Agreement to the contrary,
if any of the transactions described in Section 11(a)(ii) or Section 13(a) has
occurred or occurs, then any Rights that are or were on or after the
Distribution Date beneficially owned by an Acquiring Person or any Associate or
Affiliate shall become void with respect to the Rights provided under this
Section 7, Section 11(a)(ii) and Section 13(a), and any holder of such Rights
shall thereafter have no right to exercise such Rights under the provisions of
this Section 7, Section 11(a)(ii) and Section 13(a).
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless the certificate set forth on the
reverse side of the Rights Certificate surrendered for such exercise shall have
been properly completed and duly executed by the registered holder thereof and
the Company shall have been provided with such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this 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 Rights Certificates purchased or acquired by the
Company
16.
<PAGE>
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF COMMON STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock, or any authorized and issued shares of Common Stock held in its treasury,
the number of shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the occurrence of an event
specified in Section 11, shall so reserve and keep available a sufficient number
of shares of Common Stock (and/or other securities) which may be required to
permit the exercise in full of the Rights pursuant to Section 11 and this
Agreement.
(b) So long as the shares of Common Stock (and, after the
occurrence of an event specified in Section 11, any other securities) issuable
upon the exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares (or other securities) reserved
for such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock and/or
other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such
17.
<PAGE>
shares or other securities (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares or
securities.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates or of any certificates for shares of Common Stock and/or other
securities upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Rights Certificates to a person other than, or in respect of the
issuance or delivery of the shares of Common Stock and/or other securities in a
name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise; nor shall the Company be required to
issue or deliver any certificates for shares of Common Stock and/or other
securities in a name other than that of the registered holder upon the exercise
of any Rights until such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
(e) The Company shall use its best efforts to (i) file, as soon
as practicable following the Distribution Date, a registration statement on an
appropriate form under the Securities Act of 1933, as amended (the "Act"), with
respect to the securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act and the
rules
18.
<PAGE>
and regulations thereunder) until the expiration of the Rights. The Company
will also take such action as may be appropriate under the blue sky laws of the
various states.
Section 10. COMMON STOCK RECORD DATE. Each person in whose name any
certificate for shares of Common Stock (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 shares of Common Stock (or other securities) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly presented and payment of the
Purchase Price (and any applicable transfer taxes) was made; PROVIDED, HOWEVER,
that if the date of such presentation and payment is a date upon which the
Common Stock (or other securities) transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the Common Stock (or other securities) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a stockholder of
the Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions, or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
19.
<PAGE>
(a)(i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Common Stock payable in shares
of Common Stock, (B) subdivide the outstanding Common Stock, (C) combine the
outstanding Common Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Common Stock (including
any such reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), 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, except as otherwise
provided in this Section 11(a) and in Section 7(e), 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 and other
securities which, if such Right had been exercised immediately prior to such
date and at a time when the Common Stock transfer books of the Company were
open, the holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event that any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any of its Subsidiaries or any entity holding securities of the company
organized, appointed or established by the company or any of its Subsidiaries
for or pursuant to the terms of any
20.
<PAGE>
such plan), alone or together with its Affiliates and Associates, shall become
an Acquiring Person (except pursuant to a Permitted Offer or transaction set
forth in Section 13(a)), then proper provision shall be made so that each holder
of a Right, except the Acquiring Person and other Persons as provided in Section
7(e) hereof, shall, for a period of 60 days after the later of the occurrence of
any such event and the effective date of an appropriate registration statement
pursuant to Section 9, have a right to receive, upon exercise of such Right at
the then current Purchase Price in accordance with the terms of this Agreement,
such number of shares of Common Stock of the Company as shall equal the result
obtained by multiplying the then number of shares of Common Stock for which a
Right is then exercisable by a fraction, the numerator of which is equal to the
current Purchase Price, and the denominator of which is equal to 50% of the
current market price per one share of Common Stock (determined pursuant to
Section 11(d)) on the date of the occurrence of the event set forth in this
subparagraph (ii) (such number of shares being referred to as the "number of
Adjustment Shares"); PROVIDED, HOWEVER, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13 hereof
shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common Stock to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii) and the Rights become so exercisable, notwithstanding any other provision
of this Agreement, to the extent necessary and permitted by applicable law and
any agreements in effect on the date hereof to which the Company is a party,
each Right shall thereafter represent the right to receive, upon
21.
<PAGE>
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, a number of shares, or units of shares, of (x) Common Stock
(up to the maximum number of shares of Common Stock which may permissibly be
issued using the allocation procedure specified in the second sentence of
Section 11(j)) and (y) preferred stock (or other equity securities) of the
Company equal in the aggregate to the number of, Adjustment Shares where the
Board of Directors of the Company shall have deemed such shares or units, other
than the shares of Common Stock, to have at least the same economic value and
voting rights as the Common Stock (a "common stock equivalent"); PROVIDED,
HOWEVER, if there are unavailable sufficient shares (or fractions of shares) of
Common Stock and/or common stock equivalents, then the Company shall take all
such action as may be necessary to authorize additional shares of Common Stock
or common stock equivalents for issuance upon exercise of the Rights, including
the calling of a meeting of shareholders; AND PROVIDED, FURTHER, that the
Company shall issue no common stock equivalent upon exercise of the Rights until
the Company has first issued all authorized and unreserved shares of Common
Stock; AND PROVIDED, FURTHER, that if the Company is unable to cause sufficient
shares of Common Stock and/or common stock equivalents to be available for
issuance upon exercise in full of the Rights, then each Right shall thereafter
represent the right to receive the Adjusted Number of Common Shares upon
exercise at the Adjusted Purchase Price (as such terms are hereinafter defined).
As used herein, the term "Adjusted Number of Common Shares" shall be equal to
that number of shares (or fractions of shares) of Common Stock (and/or shares or
units of common stock equivalents) equal to the product of (x) the number of
Adjustment Shares and (y) a fraction, the numerator of which is the number of
shares of Common Stock (and/or shares
22.
<PAGE>
or units of common stock equivalents) available for issuance upon exercise of
the Rights, and the denominator of which is the aggregate number of Adjustment
Shares otherwise issuable upon exercise in full of all Rights (assuming there
were sufficient shares of Common Stock available) (such fraction being referred
to as the "Proration Factor"). The "Adjusted Purchase Price" shall mean the
product of the Purchase Price and the Proration Factor. The Board of Directors
may, but shall not be required to, establish procedures to allocate the right to
receive Common Stock and common stock equivalents upon exercise of the Rights
among holders of Rights.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Common Stock (or shares having the same or more favorable rights,
privileges and preferences as the Common Stock ("equivalent common stock")) or
securities convertible into Common Stock or equivalent common stock, at a price
per share of Common Stock or equivalent common stock (or having a conversion
price per share, if a security,convertible into Common Stock or equivalent
common stock) less than the current market price (as defined in Section 11(d))
per share of Common Stock 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 shares of Common Stock outstanding on
such record date, plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares of Common Stock and/or equivalent
common stock to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would
23.
<PAGE>
purchase at such current market price, and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock and/or equivalent common stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price
may be paid in a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be determined reasonably and
with good faith to the holders of Rights 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. Shares of Common Stock
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such
rights or warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (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 (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Common Stock, but including
any dividend payable in stock other than Common Stock) 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
24.
<PAGE>
shall be the current market price (as defined in Section 11(d)) per share of
Common Stock on such record date, less the fair market value (as determined
reasonably and with good faith to the holders of Rights by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants distributable in respect of one share of
Common Stock, and the denominator of which shall be the current market price per
share of the Common Stock. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price which
would be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than in
Section 11(a)(iii), the "current market price" per share of Common Stock on any
date shall be deemed to be the average of the daily Closing Prices per share of
such Common Stock for the 30 consecutive Trading Days immediately prior to,such
date; PROVIDED, HOWEVER, that in the event that the current per-share market
price of the Common Stock is determined during and following the announcement by
the issuer of such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible into
shares of such Common Stock or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each
such case, the "current market price" shall be properly adjusted to take into
account ex-dividend trading.
25.
<PAGE>
If the Common Stock is not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share determined
reasonably and with good faith to the holders of Rights 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.
(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 which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) one year from the date of the transaction which mandates
such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a), the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Common Stock, thereafter the
number of such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares contained
in Section 11(a) through (c), inclusive, and the provisions of Sections 7, 9,
10, 13 and 15 hereof with respect to the Common Stock shall apply on like terms
to any such other shares.
26.
<PAGE>
(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 shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of shares of
Common Stock (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares of Common Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of shares of Common Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of shares of Common Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest 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
27.
<PAGE>
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 Rights Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 15 hereof
regarding fractional shares, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement. Irrespective of any
adjustment or change in the Purchase Price or the number of shares of Common
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per
share and the number of shares which were expressed in the initial Rights
Certificates issued hereunder.
28.
<PAGE>
(j) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares of
common stock or other securities issuable upon exercise of the Rights, the
Company shall take any corporate action which, in the opinion of its counsel,
may be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock or other securities at such
adjusted Purchase Price. If upon any exercise of the Rights, a holder is to
receive a combination of Common Stock and common stock equivalents, a portion of
the consideration paid upon such exercise, equal to at least the then par value
of a share of Common Stock of the Company, shall be allocated as the payment for
each share of Common Stock of the Company so received.
(k) 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 shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the shares of Common Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(l) Anything to the contrary in this Section 11
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its
29.
<PAGE>
sole discretion shall determine to be advisable in order that any consolidation
or subdivision of the Common Stock, issuance wholly for cash of any shares of
Common Stock at less than the current market price, issuance wholly for cash of
shares of Common Stock or securities which by their terms are convertible into
or exchangeable for shares of Common Stock, stock dividends, or issuance of
rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Common Stock shall not be
taxable to such stockholders.
(m) The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent so exercised
and shall not otherwise affect the rights represented by the Rights under this
Rights Agreement.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Stock a
copy of such certificate and (c) mail a brief summary thereof to each holder of
Rights in accordance with Section 26 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly,
(w) the Company shall consolidate with, or merge with
and into, any other Person,
30.
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(x) any Person shall consolidate with the Company, or
merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger,
(y) any subsidiary of the Company shall consolidate
with, or merge with and into any other Person or any Person shall consolidate
with, or merge with and into, any subsidiary of the Company (other than, in the
case of any transaction described in (w), (x) or (y)), a merger or consolidation
which would result in all of the Voting Power represented by the securities of
the Company or subsidiary outstanding immediately prior thereto continuing to
represent, directly or indirectly (either by remaining outstanding or by being
converted into securities of the surviving entity), all of the Voting Power
represented by the securities of the Company, subsidiary or such surviving
entity outstanding immediately after such merger or consolidation and the
holders of such securities not having changed as a result of such merger or
consolidation), or
(z) the Company shall sell, mortgage or otherwise
transfer (or one or more of its subsidiaries shall sell, mortgage or otherwise
transfer), in one or more transactions, assets or earnings power aggregating
more than 50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) to any other Person (other than to the Company or any of its
subsidiaries), then, and in each such case, proper provision shall be made so
that
(i) following the Distribution Date, each holder of a
Right shall 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 shares of freely tradeable Common Stock of the Principal Party (as
hereinafter defined), free and clear of liens, rights
31.
<PAGE>
of call or first refusal, encumbrances or other adverse claims, as shall be
equal to the result obtained by (A) multiplying the then current Purchase Price
by the number of shares of Common Stock for which a Right is then exercisable
and (B) dividing that product by 50% of the current market price per share of
the Common Stock of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer;
(ii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply to such Principal Party; and
(iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of shares
of its Common Stock in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
hereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause
(w) or (x) of Section 13(a), the person that is the issuer of any securities
into which shares of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to the merger or consolidation;
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(ii) in the case of any transaction described in clause
(y) of Section 13(a), the surviving or resulting Person in such merger or
consolidation; and
(iii) in the case of any transaction described in clause
(z) 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,
(A) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect subsidiary or Affiliate of one or more other Persons, "Principal Party"
shall refer to any such other Person the Common Stock of which is and has been
so registered, unless the Common Stock of two or more of such other Persons are
and have been so registered, in which case "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value,
(B) if the Common Stock of such Person is and has
not been so registered and such Person is a direct or indirect subsidiary or
Affiliate of one or more other Persons, the Common Stocks of none of which are
and have been so registered, "Principal Party" shall refer to the senior such
Person having outstanding Common Stock; and
(C) in case such Person is owned, directly or
indirectly, by a joint venture or partnership formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the rules set forth
in (A) and (B) above shall apply to each of the chains of ownership having an
interest in such joint venture or partnership as
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if such party were a "Subsidiary" of both or all of such joint venturers or
partners and the Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate, nor will it permit any
subsidiary to consummate, any such consolidation, merger, sale or transfer
unless prior thereto the Company, the subsidiary, if appropriate, and each
Principal Party and each other Person who may become a Principal Party as a
result of such consolidation, merger, sale or transfer shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation, merger, sale
or transfer of assets mentioned in paragraph (a) of this Section 13, the
Principal Party at its own expense will:
(i) prepare and file a registration statement under the
Act with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, will use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing and will use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate; and
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(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all material respects with the requirements for registration on Form
10 under the Exchange Act.
(d) The provisions of this Section 13 are intended to provide
to the holders of Rights a significant continuing equity interest in the
business of the Company following the consummation of any transaction of the
types described in paragraph (a) of this Section 13, and any attempt by any
Acquiring Person or Principal Party to avoid the provisions of this Section 13
or to limit the impact thereof shall not be given any effect.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. The Company
will cause its subsidiary or subsidiaries to adhere to the terms and provisions
of this Agreement, to the extent applicable to such subsidiaries.
(f) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(w), (x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons (or a wholly-owned subsidiary of any such Person or Persons)
who acquired shares of Common Stock pursuant to a Permitted Offer, (ii) the
price per share of Common Stock offered in such transaction is not less than the
price per common share paid to all holders of Common Stock whose shares were
purchased pursuant to such Permitted Offer, and (iii) the form of consideration
being offered to the remaining holders of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
Permitted Offer. Upon consummation of any such transaction contemplated by this
subsection (f), all Rights under this Agreement shall expire.
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Section 14. ADDITIONAL COVENANTS.
(a) After the Stock Acquisition Date, the Company covenants and
agrees that it shall not (i) consolidate with, (ii) merge with or into, or (iii)
sell or transfer, in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries taken as a whole, to any other Person if at the time of or after
such consolidation, merger or sale there are any charter or by-law provisions or
any rights, warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to be afforded
by the Rights. The Company shall not consummate any such consolidation, merger
or sale unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this subsection.
(b) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 24 hereof
regarding redemption of the Rights, take any action the purpose or effect of
which is to diminish or otherwise eliminate the benefits intended to be afforded
by the Rights.
Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 15(a),
the current market value of a whole Right shall be the Closing Price per
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Right of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of fractional shares
of Common Stock the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of shares of
Common Stock. For purposes of this Section 15(b), the current market value of
one share of Common Stock shall be the Closing Price of a share of Common Stock
for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 giving rise to the right to receive common stock
equivalents (other than Common Stock) or other securities upon the exercise of a
Right, the Company shall not be required to issue fractions of shares or units
of such common stock equivalents or other securities upon exercise of the Rights
or to distribute certificates which evidence fractional shares of such common
stock equivalents or other securities. In lieu of fractional shares or units of
such common stock equivalents or other securities, the Company may pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a share or unit of such common stock equivalent or other
securities. For purposes of this Section 15(c), the current market value shall
be determined in the manner set forth in Section 11(d) hereof for the Trading
Day immediately prior to the date of such exercise
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and, if such common stock equivalent is not traded, each such common stock
equivalent shall have the value of one share of Common Stock.
(d) Except as otherwise expressly provided herein, the holder
of a Right by the acceptance of the Rights expressly waives his right to receive
any fractional Rights or any fractional shares upon exercise of a Right.
Section 16. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.
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Section 17. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or Writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 18. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
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corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions thereof.
Section 19. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or
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with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Rights Agent or any successor Rights Agent shall
be a party, or any corporation succeeding to the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement any of the Rights
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 Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
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Section 21. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by
it (who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person) be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, any Vice
Chairman of the Board, any President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates
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(except as to the fact that it has countersigned the Rights Certificates) 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 Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Sections 11 and 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall it be
responsible for any determination by the Board of Directors of the Company of
the current market value of the Rights or Common Stock pursuant to the
provisions of Section 15 hereof regarding fractional shares; nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or other securities
to be issued pursuant to this Agreement or any Rights Certificate, or as to
whether any shares of Common Stock or other securities will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights
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Agent for the carrying out or performing by the Rights Agent of the provisions
of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the Chairman of the
Board, any Vice Chairman of the Board, any President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and is authorized to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instruction of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company or to the holders of the
Rights resulting from any such act, omission,
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default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights, if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
Section 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock by registered or certified mail, and to holders of the
Rights 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 Stock by registered or certified mail, and to the holders of the
Rights 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
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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 (who shall, with such notice, submit
his Rights Certificate (if any) for inspection by the Company), then the
registered holder of any Rights may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the State of
California (or of any other state of the United States so long as such
corporation is authorized to do business in the State of California), in good
standing, having a principal office in the State of California, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Rights. Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
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Section 23. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.
Section 24. REDEMPTION AND TERMINATION.
(a)(i) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (x) ten (10) business days after the time
that any person becomes an Acquiring Person or (y) 5:00 P.M., San Francisco,
California time, on the Final Expiration Date, redeem all but not less than all
of the then outstanding Rights at a redemption price of $.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such price being hereinafter
referred to as the "Redemption Price").
(ii) In addition, the Board of Directors of the Company
may redeem all but not less than all of the then outstanding Rights at the
Redemption Price, following the occurrence of a Stock Acquisition Date but prior
to any transaction described in Section 13(a), following the expiration of any
period during which the holder of Rights may exercise the rights under Section
11(a)(ii) if and for as long as the Acquiring Person ceases to be the Beneficial
Owner of securities representing 20% or more of the outstanding shares of the
Voting Power, and at the time of redemption there are no other persons who are
Acquiring Persons.
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(iii) Upon consummation of any transaction specified in
Section 13(a) pursuant to a Permitted Offer and complying with the terms of
Section 13(f), all Rights under this Agreement shall expire.
(b) In the case of a redemption permitted under Section
24(a)(i) or 24(a)(iii), 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.
In the case of a redemption permitted only under Section 24(a)(ii), the
right to exercise the Rights will terminate and represent only the right to
receive the Redemption Price only after the giving of notice of such redemption
to the holder of such Rights upon the later of ten Business Days following the
giving of such notice or the expiration of any period during which the rights
under Section 11(a)(ii) may be exercised.
After the action of the Board of Directors ordering any such redemption
of the Rights, the Company shall promptly give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by mailing such
notice to the Rights Agent and to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
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(c) In the case of a redemption permitted under Section
24(a)(i) or (ii), the Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release announcing
the manner of redemption of the Rights and (ii) mailing payment of the
Redemption Price to the registered holders of the Rights at their last addresses
as they appear on the registry books of the Rights Agent, or, prior to the
Distribution Date, on the registry books of the Transfer Agent of the Common
Stock, and upon such action, all outstanding Rights Certificates shall be null
and void without any further action by the Company.
Section 25. NOTICE OF CERTAIN EVENTS. In case the Company shall propose
(a) to pay any dividend payable in stock of any class to the
holders of Common Stock or to make any other distribution to the holders of
Common Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or
(b) to offer to the holders of Common Stock rights or warrants
to subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, or
(c) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or
(d) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person, or
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(e) 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
Rights Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (a) or (b) above at least 20 days prior to the record date for
determining holders of the shares of Common Stock for purposes of such action,
and in the case of any such other action, at least 20 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the shares of Common Stock, whichever shall be the earlier. In case
any of the events set forth in Section 11(a)(ii) shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to each holder of
a Rights Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. NOTICES. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Monterey Pasta Company
353 Sacramento Street, Suite 500
San Francisco, California 94111
Attention: Carolyn Mar
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Subject to the provisions of Section 22, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Corporate Stock Transfer
370 - 17th Street, #2350
Denver, Colorado 80202
Attention: Carolyn Bell
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without approval
of any holders of Right Certificates in order (i) to cure any ambiguity,(ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) prior to the Distribution
Date, to change or supplement the provisions hereunder which the Company, in its
sole discretion, may deem necessary or desirable, and (iv) following the
Distribution Date, to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment
unless the Rights Agent shall
51.
<PAGE>
have determined in good faith that such supplement or amendment would adversely
affect its interests under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
Section 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
or any other securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors, or the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret and amend 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 in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights Certificates
and all other parties, and (y) not subject the Board to any liability to the
holders of the Rights Certificates.
52.
<PAGE>
Section 29. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. BENEFITS OF THIS AGREEMENT. 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 Rights Certificates (and, prior
to the Distribution Date, the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
53.
<PAGE>
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
MONTEREY PASTA COMPANY
Attest: /s/ Carolyn Mar By: /s/ Norman E. Dean
- - ---------------------------------- --------------------------------
Name: Carolyn Mar Name: Norman E. Dean
-----------------------------
Title: Vice President - Legal Affairs Title: President and Chief Executive
and Secretary Officer
----------------------------
CORPORATE STOCK TRANSFER
Attest: /s/ Shari Humphreys By: /s/ Carylyn Bell
- - ---------------------------------- --------------------------------
Name: Shari Humpherys Name: Carylyn Bell
----------------------------- ------------------------------
Title: Secretary Title: President
---------------------------- -----------------------------
54.
<PAGE>
EXHIBIT A
The front of the Rights Certificate is represented by the form in Exhibit
A-1. The reverse side of the Rights Certificate is represented by the forms in
Exhibit A-2 and Exhibit A-3.
55.
<PAGE>
EXHIBIT A-1
[Form of Rights Certificate]
Certificate No. R-____________ ______________ Rights
NOT EXERCISABLE AFTER DECEMBER 31, 2004 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID TO THE EXTENT PROVIDED IN AND
UNDER THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT.
Rights Certificate
MONTEREY PASTA COMPANY
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 May 15, 1996 (the "Rights Agreement") between MONTEREY PASTA COMPANY
(the "Company") and Corporate Stock Transfer (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. (San Francisco,
California time) on December 31, 2004 at the principal office of the Rights
Agent one fully paid, nonassessable share of Common Stock (the "Common Stock")
of the Company, at an initial purchase price of $28 per share, subject to
adjustment as provided in the Rights Agreement (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the appropriate Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the numbers and Purchase Price as of __________________, 19___, based on the
Common Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of
shares of Common Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights
56.
<PAGE>
Certificates. Copies of the Rights Agreement are on file at the principal
office of the Company and are also available upon written request to the
Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent, may be exercised for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Common Stock as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised (other than pursuant to Section
11(a)(ii) of the Rights Agreement) in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised. If this Rights Certificate shall
be exercised in whole or in part pursuant to Section 11(a)(ii) of the Rights
Agreement, the holder shall be entitled to receive this Rights Certificate duly
marked to indicate that such exercise has occurred as set forth in the Rights
Agreement.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this certificate may be redeemed by the Company at its option at a redemption
price of $.001 per Right. Subject to the provisions of the Rights Agreement,
the Company, at its option, may elect to mail payment of the redemption price to
the registered holder of the Right at the time of redemption, in which event
this certificate may become void without any further action by the Company.
The Company is not obligated to issue fractional shares of Common Stock
upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof a
cash payment may be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of Common
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a 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 Rights
Certificate shall have been exercised as provided in the Rights Agreement.
57.
<PAGE>
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
Dated as of , 199 .
Attest: MONTEREY PASTA COMPANY
By:
- - ---------------------------------- --------------------------------
Name: Name:
----------------------------- ------------------------------
Title: Title:
---------------------------- -----------------------------
CORPORATE STOCK TRANSFER
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
58.
<PAGE>
EXHIBIT A-2
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED____________________________________________________________
hereby sells, assigns and transfers unto _____________________________________
- - --------------------------------------------------------------------------------
(Please print name and address of transferee)
- - --------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: , 19
---------------- --
--------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
59.
<PAGE>
EXHIBIT A-3
[Form of Reverse Side of Rights Certificate]
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
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 pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , 19
---------------- --
--------------------------------------
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Rights certificate in every particular, without
alteration or enlargement or any change whatsoever.
60.
<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS
TO PURCHASE COMMON STOCK
OF MONTEREY PASTA COMPANY
Pursuant to an agreement dated as of May 15, 1996 (the "Rights
Agreement"), between Monterey Pasta Company (the "Company") and Corporate Stock
Transfer, as Rights agent (the "Rights Agent"), the Company declared a dividend
of one right (a "Right") for each outstanding share of common stock of the
Company (the "Common Stock"). The dividend is payable on May 20, 1996 (the
"Record Date") to the shareholders of record on that date.
A SUMMARY OF THE RIGHTS AGREEMENT IS SET FORTH BELOW. HOWEVER, THIS
SUMMARY IS PROVIDED FOR CONVENIENCE ONLY, AND DOES NOT PURPORT TO FULLY
REPRESENT THE TERMS AND CONDITIONS GOVERNING THE RIGHTS. FOR A FULL DESCRIPTION
OF SUCH TERMS AND CONDITIONS, CONSULT THE RIGHTS AGREEMENT.
Each Right, when exercisable, entitles the registered holder (a) to
purchase from the Company one share of Common Stock, at a price of $28 per share
(the "Purchase Price"), subject to adjustment; (b) to purchase additional shares
of common stock ("Adjustment Shares") at a rate set forth below; and (c) under
certain circumstances to purchase shares of stock of a corporation that merges
with or into the Company (the "Merger Right"), as described below. The Rights
are not exercisable until the Distribution Date (as defined below).
The "Distribution Date" shall mean the earlier of (i) the first date of
public announcement by the Company or by a person (an "Acquiring Person") who or
which shall be the beneficial owner of securities representing 20% or more of
the voting power of all securities of the Company outstanding or such date
within ten (10) business days thereafter as shall be determined by the Board of
Directors of the Company in its sole discretion (the "Stock Acquisition Date");
or (ii) the tenth day after the date of the commencement of, or first public
announcement of the intent of any Person (other than the Company, any Subsidiary
of the Company, or any employee benefit plan of the Company or any of its
Subsidiaries) to commence (which intention to commence remains in effect for
five business days after such announcement) a tender or exchange offer which
would result in such Person becoming an Acquiring Person, unless such date is
extended by the Board of Directors of the Company (such date shall be no later
than the Stock Acquisition Date).
Once an Acquiring Person becomes such, then any rights that are or were
beneficially owned by the Acquiring Person or any Associate or Affiliate shall
become void, and any holder of such Rights shall thereafter have no right to
exercise such Rights.
61.
<PAGE>
Until the Distribution Date (or earlier redemption or expiration of the
Rights), the following will apply to the Rights:
(a) Rights will be evidenced, with respect to any of the Common Stock
certificates outstanding as of the Record Date, by such Common Stock certificate
together with this Summary of Rights.
(b) Rights will be transferred with and only with Common Stock certificates,
and the surrender for transfer of any certificates for Common Stock outstanding
as of the Record Date (with or without this Summary of Rights attached) will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
(c) New Common Stock certificates issued after the Record Date upon transfer
or new issuance of the Common Stock will contain a notation incorporating the
Rights Agreement by reference.
After the Distribution Date, the Rights will be separated from the shares
of stock. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date, and the separate Rights Certificates alone will evidence the
Rights.
The Rights will expire on the earliest of (i) December 31, 2004, (ii)
redemption by the Company as described below, or (iii) consummation of a merger
transaction with a person or group who acquired Common Stock pursuant to
Permitted Offer (as defined below), and is offering in the merger the same price
per share and form of consideration paid in the Permitted Offer.
A "Permitted Offer" shall mean a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the members of the Board of Directors who are not officers
of the Company to be both adequate and otherwise in the best interests of the
Company and its stockholders.
The Purchase Price payable, and the number of shares of the Common Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of the
Common Stock, (ii) upon the grant to holders of the Common Stock of certain
rights, options or warrants to subscribe for Common Stock, certain convertible
securities or securities having the same or more favorable rights, privileges
and preferences as the Common Stock at less than the current market price of the
Common Stock, or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness, cash or assets (excluding regular quarterly cash
dividends out of earnings or retained earnings and dividends payable in Common
Stock) or of subscription rights or warrants (other than those referred to
above).
62.
<PAGE>
The right to purchase Adjustment Shares shall arise at the time any
person becomes an Acquiring Person (unless pursuant to a Permitted Offer). At
such time, proper provision shall be made so that each holder of a Right (except
for the Acquiring Person) will for a 60-day period thereafter have the right to
receive upon exercise of each right, at the Purchase Price, that number of
shares of Common Stock equal to the result obtained by dividing the Purchase
Price by 50% of the current market price of the Common Stock (as defined in the
Rights Agreement). If there is an insufficient number of shares of Common Stock
available, then the Right holder shall receive (after all authorized and
unreserved shares of Common Stock have been issued) a common stock equivalent
(such as preferred stock or another equity security with at least the same
economic value as the Common Stock). However, in the event that the Merger
Right arises (as described below), the right to purchase Adjustment Shares shall
become void.
The Merger Right shall arise in the event that, after the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such, (i) the Company is acquired in a merger or other
business combination transaction in which the Common Stock is exchanged or
changed, (ii) any subsidiary of the Company is involved in a merger or other
business combination transaction, or (iii) 50% or more of its assets or earning
power are sold (in one transaction or a series of transactions). At such time,
proper provision shall be made so that each holder of a Right (except for the
Acquiring Person) shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price, that number of shares of common
stock of the surviving or resulting Person in the merger or business combination
transaction or the Person acquiring the greatest portion of the assets, as
appropriate, or, in either case, its publicly traded parent company or
affiliate, equal to the result obtained by dividing the Purchase Price by 50% of
the current market price of the common stock of the surviving or resulting
Person.
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractions of shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) ten (10) business days
after the time any person becomes an Acquiring Person or (ii) the expiration of
the Rights, the Company may redeem the Rights in whole, but not in part, at a
price of $.001 per Right (the "Redemption Price") which redemption shall be
effective upon the action of the Board of Directors. Additionally, the Company
may thereafter redeem the then outstanding Rights in whole, but not in part, at
the Redemption Price (i) provided that such redemption is incidental to a merger
or other business combination transaction or series of transactions involving
the Company but not involving an Acquiring Person or any person who was an
Acquiring Person, or (ii) following an event giving rise to, and the expiration
of the exercise period for, the right to purchase Adjustment Shares if and for
as long as an Acquiring Person ceases to beneficially own securities
representing less than 20% of the voting power of the Company's voting
securities and at the time of redemption there are no other
63.
<PAGE>
persons who are Acquiring Persons. The redemption of Rights described in the
preceding sentence shall be effective only as of such time when the right to
purchase Adjustment Shares is not exercisable, and in any event, only after 10
business days prior notice.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A COPY OF THE RIGHTS AGREEMENT IS AVAILABLE FREE OF CHARGE FROM THE
COMPANY. THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
INCORPORATED HEREIN BY REFERENCE.
64.
<PAGE>
EXHIBIT C
FORM OF ELECTION TO PURCHASE
[To be executed upon the exercise of Rights]
To MONTEREY PASTA COMPANY:
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by Rights Certificate Number R-__________ to purchase the shares of
Common Stock (or such other securities of the Company or any other Person)
issuable upon the exercise of the Rights and requests that certificates for such
shares be issued in the name of:
- - --------------------------------------------------------------------------------
(Please insert social security or other identifying number)
- - --------------------------------------------------------------------------------
(Please print name and address)
- - --------------------------------------------------------------------------------
The Rights Certificate indicating the balance, if any, of such Rights
which may still be exercised shall be returned to the undersigned unless such
person requests that the Rights Certificate be registered in the name of and
delivered to:
- - --------------------------------------------------------------------------------
(Please insert social security or other identifying number)
- - --------------------------------------------------------------------------------
(Please print name and address)
- - --------------------------------------------------------------------------------
65.
<PAGE>
Dated: , 19
---------------- --
--------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
66.
