<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 10, 1998 (February 27, 1998)
Suiza Foods Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-12755 75-2559681
- ----------------- ------------------- ---------------------
(State or other (Commission (IRS employer
jurisdiction of file number) identification no.)
incorporation)
3811 Turtle Creek Blvd, Suite 1300, Dallas, Texas 75219
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 528-0939
1
<PAGE> 2
ITEM 5. OTHER EVENTS
On February 27, 1998, the Registrant's Board of Directors voted to
adopt a Rights Agreement pursuant to which Rights to purchase shares of the
Registrant's Common Stock will be distributed as a dividend, one Right per
share, to record owners of the registrant's Common Stock as of the close of
business on March 18, 1998. The Rights Agreement was not adopted in response
to any known offers for the Registrant. The Registrant's press release, dated
March 9, 1998, announcing the Board's action is attached hereto as Exhibit
20.1, and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
The following documents are filed as exhibits to this
report:
4.1 Rights Agreement dated March 6, 1998 among
the Company and Harris Trust & Savings Bank,
as rights agent, which includes as Exhibit A
the Form of Rights Certificate. Pursuant to
the Rights Agreement, the rights certificates
will not be mailed until after the
Distribution Date (as defined in the Rights
Agreement).
20.1 Press release dated March 9, 1998.
2
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
SUIZA FOODS CORPORATION
By:/s/ TRACY L. NOLL
------------------------------------
Tracy L. Noll, Vice President,
Chief Financial Officer & Secretary
Dated: March 10, 1998
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
4.1 Rights Agreement dated March 6, 1998
20.1 Press Release dated March 9, 1998
</TABLE>
<PAGE> 1
EXHIBIT 4.1
SUIZA FOODS CORPORATION
and
HARRIS TRUST AND SAVINGS BANK
as Rights Agent
RIGHTS AGREEMENT
March 6, 1998
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
Section Page
<S> <C> <C>
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Issue of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Transfer, Split Up, Combination, and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost, or
Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . . . . . . . 10
9. Reservation and Availability of
Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
10. Common Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11. Adjustment of Purchase Price, Number and Kind of Shares, or
Number of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . 19
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . 20
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . 22
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
17. Rights Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . 24
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . 25
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
22. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
23. Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
29. Determinations and Actions by the Board of Directors, Etc. . . . . . . . . . . . . . . . . 33
30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
31 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
34. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
</TABLE>
ii
<PAGE> 4
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of March 6, 1998 (the "Agreement"), between
Suiza Foods Corporation, a Delaware corporation (the "Company"), and Harris
Trust and Savings Bank, (the "Rights Agent").
BACKGROUND
On February 27, 1998 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of common stock, par value $.01 per
share, of the Company (the "Common Stock") outstanding at the Close of Business
on March 18, 1998 (the "Record Date"), and has authorized the issuance of one
Right (as such number may be adjusted pursuant to the provisions of SECTION
11(p)) for each share of Common Stock of the Company issued between the Record
Date (whether originally issued or delivered from the Company's treasury) and
the Distribution Date, each Right initially representing the right to purchase
one share of Common Stock of the Company upon the terms and subject to the
conditions set forth below (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth in this Agreement, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Act" means the Securities Act of 1933, as amended.
(b) "Acquiring Person" means any Person that, together
with all Affiliates and Associates of such Person, is the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding,
but does not include (i) the Company; (ii) any Subsidiary of the
Company; (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company; (iv) any Person organized, appointed or
established by the Company for or pursuant to the terms of any such
plan; (v) any person that becomes an Acquiring Person pursuant to a
Permitted Transaction; (vi) any Person that has become an Acquiring
Person inadvertently and, within five Business Days of being requested
by the Company to advise it regarding the same, certifies to the
Company that such Person acquired beneficial ownership of shares of
Common Stock in excess of 14.9% inadvertently or without knowledge of
the terms of the Rights and such certification is accepted as true by
a Requisite Majority acting in good faith, and such Person divests as
promptly as practicable a sufficient amount of Common Stock so that
such Person would no longer hold in excess of 14.9% of the Common
Stock then outstanding; and (vii) any Person that becomes an Acquiring
Person solely as a result of a reduction in the number of outstanding
shares of Common Stock in a transaction that is approved by a
Requisite
1
<PAGE> 5
Majority, provided that such Person will immediately be an Acquiring
Person in the event such Person thereafter acquires any additional
shares of Common Stock (other than as a result of a stock split or
stock dividend) while the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding.
(c) "Affiliate" and "Associate" have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act and in effect on the date of this
Agreement.
(d) A Person will be deemed the "Beneficial Owner" of,
and will be deemed to "beneficially own," any securities that:
(i) such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the
occurrence of certain events) pursuant to any agreement,
arrangement, or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however,
that a Person will not be deemed the "Beneficial Owner" of, or
to "beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B)
securities issuable upon exercise of Rights at any time prior
to the occurrence of a Distribution Date or (C) securities
issuable upon exercise of Rights, which were acquired by such
Person or any of such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to SECTION 3(a) or
SECTION 22 (the "Original Rights") or pursuant to SECTION
11(i) in connection with an adjustment made with respect to
any Original Rights;
(ii) such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement, or understanding, whether or not in
writing; provided, however, that a Person will not be deemed
the "Beneficial Owner" of, or to "beneficially own," any
security under this SECTION 1(d)(ii) as a result of an
agreement, arrangement, or understanding to vote such security
if such agreement, arrangement, or understanding: (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 provisions of the General
Rules and Regulations under 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
(iii) are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
of such Person) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement, or
2
<PAGE> 6
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso in SECTION 1(d)(ii)), or
disposing of any voting securities of the Company;
provided, however, that nothing in this SECTION 1(d) will cause a
Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities
acquired through such Person's participation in good faith in a bona
fide firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(e) "Business Day" means any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of Texas
or Illinois are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date will mean 5:00
p.m., Dallas, Texas time, on such date; provided, however, that if
such date is not a Business Day it will mean 5:00 p.m., Dallas, Texas
time, on the next succeeding Business Day.
(g) "Common Stock" means the common stock, par value $.01
per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company will mean the capital
stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or direct
the management, of such Person.
(h) "Continuing Director" means (i) any member of the
Board of Directors of the Company who (i) is not an Acquiring Person
or an Affiliate or Associate of an Acquiring Person and (ii) was
either a member of the Board of Directors of the Company on the date
of this Agreement or who subsequently became a director of the Company
and whose initial election or initial nomination for election was
approved by a majority of the Continuing Directors then on the Board
of Directors of the Company.
(i) "Distribution Date" means the Close of Business on
the tenth Business Day (unless extended by vote of a Requisite
Majority) after the earlier to occur of (i) the Stock Acquisition Date
or (ii) the date any Person commences or publicly announces an
intention to commence a tender offer or exchange offer for the Common
Stock which would result in, upon the consummation of such offer, the
Person making such offer, together with all of its Affiliates and
Associates, being the Beneficial Owner of 15% or more of the Common
Stock then outstanding (including any such date that is after the date
of this Agreement and prior to the issuance of the Rights); provided,
however, that if the tender offer or exchange offer that gave rise to
the Distribution Date is cancelled, terminated or otherwise withdrawn
within ten Business Days of its announcement, such offer shall be
deemed never to have been made and no Distribution Date shall occur
with respect thereto.
(j) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
3
<PAGE> 7
(k) "NASDAQ" means the National Association of Securities
Dealers Automated Quotation System.
(l) "Permitted Transaction" means a stock acquisition or
a tender or exchange offer pursuant to a definitive agreement by which
a Person (who is not at the time an Acquiring Person) would become an
Acquiring Person and which has been approved by a Requisite Majority
prior to the execution of the definitive agreement providing for the
acquisition or the public announcement of the offer, as the case may
be.
(m) "Person" means any individual, firm, corporation,
partnership, limited liability company or other public or private
entity.
(n) "Redemption Price" with respect to each Right means
$.01, as such amount may from time to time be adjusted in accordance
with SECTION 11. All references herein to the Redemption Price means
the Redemption Price as in effect at the time in question.
(o) "Requisite Majority" means, at any time, the
affirmative vote of a majority of the Continuing Directors then in
office.
(p) "Rights Dividend Declaration Date" is February 27,
1998, the date the Board of Directors of the Company declared a
dividend distribution of one Right for each share of Common Stock
outstanding on the Record Date.
(q) "Rights Shares" means the shares of Common Stock
issuable or issued upon the exercise of the Rights.
(r) "Section 11(a)(ii) Event" means any event described
in SECTION 11(a)(ii).
(s) "Section 13 Event" means any event described in
clauses (i), (ii), or (iii) of SECTION 13(a).
(t) "Stock Acquisition Date" means the first date of
public announcement (which, for purposes of this definition, will
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become an Acquiring Person.
(u) "Subsidiary" means, with reference to any Person, any
entity of which an amount of voting securities sufficient to elect at
least a majority of the directors or similar Persons of such entity is
beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
(v) "Trading Day" means a day on which the principal
national securities exchange or quotation system on which the shares
of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, a
Business Day.
4
<PAGE> 8
(w) "Triggering Event" means any Section 11(a)(ii) Event
or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (which, in accordance with SECTION 3, prior to the Distribution Date
are also the holders of the Common Stock) in accordance with the terms and
conditions of this Agreement, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
pursuant to this Section or successor Rights Agents pursuant to Section 21 as
it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Prior to the Distribution Date, (i) the Rights will
be evidenced (subject to the provisions of this SECTION 3(b)) by the
certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock will
be deemed also to be certificates for Rights) and not by separate
certificates, and (ii) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will, at the expense of the
Company, send by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the Distribution Date, at the address
of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of EXHIBIT A (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so
held, subject to adjustment as provided in this Agreement. In the
event that an adjustment in the number of Rights per share of Common
Stock has been made pursuant to SECTION 11(p), at the time of
distribution of the Rights Certificates, the Company will make the
necessary and appropriate rounding adjustments (in accordance with
SECTION 14(a)) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.
(b) As soon as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the
form of EXHIBIT B, 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. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and
the registered holders of the Common Stock will also be the registered
holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as defined in SECTION 7),
the transfer of any certificates representing
5
<PAGE> 9
shares of Common Stock in respect of which Rights have been issued will
also constitute the transfer of the Rights associated with such shares
of Common Stock.
(c) Rights will be issued in respect of all shares of
Common Stock that are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date. Certificates
representing such shares of Common Stock will also be deemed to be
certificates for Rights, and will bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER TO
CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN
SUIZA FOODS CORPORATION (THE "COMPANY") AND HARRIS TRUST AND
SAVINGS BANK (THE "RIGHTS AGENT") DATED AS OF MARCH 6, 1998
(AS AMENDED FROM TIME TO TIME, THE "RIGHTS AGREEMENT"), THE
TERMS OF WHICH ARE HEREBY INCORPORATED IN THIS CERTIFICATE BY
REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICES OF THE COMPANY. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE EVIDENCED
BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY
THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF
THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT, AS IN EFFECT
ON THE DATE OF MAILING, WITHOUT CHARGE PROMPTLY AFTER RECEIPT
OF A WRITTEN REQUEST. UNDER CERTAIN CIRCUMSTANCES SET FORTH
IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY ANY
PERSON WHO IS, WAS, OR BECOMES AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD
BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER,
MAY BECOME NULL AND VOID.
With respect to the shares of Common Stock issued after the
Record Date, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common Stock
represented by such certificates will be evidenced by such
certificates alone and registered holders of Common Stock will also be
the registered holders of the associated Rights, and the transfer of
any of such certificates will also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificates.
6
<PAGE> 10
Section 4. Form of Rights Certificates.
The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse of the rights
certificates) will each be substantially in the form set forth in
EXHIBIT A and may have such marks of identification or designation and
such legends, summaries, or endorsements as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or quotation system on which the
Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of SECTION 11 and SECTION 22, the Rights
Certificates, whenever distributed, will be dated as of the Record
Date and on their face will entitle the holders of such Rights
Certificates to purchase such number of shares of Common Stock as is
set forth in such Rights Certificates at the price set forth in such
Rights Certificates (such exercise price per share, the "Purchase
Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price will be subject to
adjustment as provided in this Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates will be executed on behalf of
the Company by its Chairman of the Board, its Chief Executive Officer,
its Chief Financial Officer, its President or any Vice President,
either manually or by facsimile signature, will have affixed thereto
the Company's seal or a facsimile thereof, and will be attested by the
Secretary or an Assistant Secretary of the Company, either manually or
by facsimile signature. The Rights Certificates will be countersigned
by the Rights Agent, either manually or by facsimile signature and
will not be valid for any purpose unless so countersigned. In case
any officer of the Company who has signed any of the Rights
Certificates ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company with the
same force and effect as though the Person who signed such Rights
Certificates had not ceased to be such officer of the Company, and any
Rights Certificate may be signed on behalf of the Company by any
Person who, at the actual date of the execution of such Rights
Certificate, is a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued under this Agreement.
Such books will show the names and addresses of the respective holders
of the Rights Certificates, the number of Rights evidenced on the face
of the Rights Certificates, and the date of each of the Rights
Certificates.
7
<PAGE> 11
Section 6. Transfer, Split Up, Combination, and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost, or Stolen Rights Certificates.
(a) Subject to the provisions of SECTION 7(e) and SECTION
14, at any time after the Distribution Date, and at or prior to 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 Rights Shares (or, following a Triggering
Event, Common Stock, other securities, cash, or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered
then entitled such holder (or former holder in the case of a transfer)
to purchase. Any registered holder desiring to transfer, split up,
combine, or exchange any Rights Certificate or Rights Certificates
will make such request in writing delivered to the Rights Agent, and
will surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined, or exchanged at the principal office
or offices of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company will be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder has completed and signed the
certificate contained in the form of assignment on the reverse side of
such Rights Certificate and has provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company requests in good
faith. Thereupon, the Rights Agent will, subject to SECTION 4,
SECTION 7(e) and SECTION 14, 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 any Rights Certificate.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction, or mutilation of a Rights Certificate, and, in case of
loss, theft, or destruction, of indemnity or security satisfactory to
them, and reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated,
the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed, or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to SECTION 7(e), the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except
as otherwise provided in this Agreement including, without limitation,
the restrictions on exercisability set forth in SECTION 9(c), SECTION
11(a)(iii), SECTION 23(a) and SECTION 24) in whole or in part at any
time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate
on the reverse side of the Rights Certificate duly executed, to the
Rights Agent at the principal office or offices of the Rights Agent
designated for such
8
<PAGE> 12
purpose, together with payment of the aggregate Purchase Price for
each share of Common Stock (or other securities, cash or other assets,
as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the Close of Business
on March 18, 2008, (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in SECTION 23 or (iii) the
time at which such rights are exchanged as provided in SECTION 24 (the
earlier of such times being the "Expiration Date")).
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right will initially be $210, subject to
adjustment from time to time as provided in SECTION 11, and SECTION
13(a). The Purchase Price will be payable in accordance with SECTION
7(c).
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment of the Purchase
Price for the shares of Common Stock (or other shares, securities,
cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable transfer tax, the Rights Agent will,
subject to SECTION 20(k), 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 for such shares) certificates
for the total number of shares of Common Stock to be purchased (the
Company hereby irrevocably authorizing its transfer agent to comply
with all such requests) or (B) if the Company has elected to deposit
the shares of Common Stock with a depository agent, requisition from
the depository agent depository 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 will be deposited by the transfer agent with the depository
agent) and the Company will direct the depository agent to comply with
such request; (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with
SECTION 14; (iii) after receipt of such certificates or depository
receipts, cause such certificates or depository receipts to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by
such holder; and (iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such amount may be
reduced pursuant to SECTION 11(a)(iii)) will be made in cash or by
certified bank check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash, or
distribute other property pursuant to SECTION 11(a), the Company will
make all arrangements necessary so that such other securities, cash,
or other property are available for distribution by the Rights Agent,
if and when appropriate. The Company reserves the right to require
prior to the occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only whole shares
of Common Stock would be issued.
(d) If the registered holder of any Rights Certificate
exercises less than all the Rights evidenced by such certificate, a
new Rights Certificate evidencing the unexercised
9
<PAGE> 13
Rights will be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
subject to the provisions of SECTION 14.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by any Person referred to in
CLAUSES (i) through (iii) below will become null and void without any
further action and no holder of such Rights will have any rights
whatsoever with respect to such Rights, under any provision of this
Agreement or otherwise: (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee from an Acquiring
Person (or from any Associate or Affiliate of an Acquiring Person)
that becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee from an Acquiring Person (or of any such Associate
or Affiliate) that becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement, or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors of
the Company has determined is part of an agreement, plan, arrangement,
or understanding that has as a substantial purpose or effect the
avoidance of this SECTION 7(e). The Company will use reasonable
efforts to insure that the provisions of this SECTION 7(e) and SECTION
4(b) are complied with, but will have no liability under this
Agreement to any holder of Rights Certificates or other Person as a
result of its failure to make any determinations with respect to an
Acquiring Person, or any of its Affiliates, Associates, or
transferees.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company will be obligated
to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this SECTION 7
unless such registered holder has (i) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company requests in good faith.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange will, 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, will be cancelled by it, and no
Rights Certificates will be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company will deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent will
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent will
deliver all cancelled Rights Certificates to the Company, or will, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case will deliver a certificate of destruction to the Company.
10
<PAGE> 14
Section 9. Reservation and Availability of Capital Stock.
(a) The Company will use its best efforts to reserve and
keep available out of its authorized and unissued shares of Common
Stock (and/or or other securities) or its authorized and issued shares
of Common Stock (and/or or other securities) held in its treasury, the
number of shares of Common Stock (and/or other securities) that will
be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Common Stock (and, following
the occurrence of a Triggering Event, Common Stock or other
securities) issuable and deliverable upon the exercise of the Rights
may be listed on any national securities exchange or automated
quotation system, the Company will use its reasonable efforts to
cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange or
automated quotation system upon official notice of issuance upon such
exercise.
(c) The Company will use its best efforts to (i) file, as
soon as practicable following the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance
with SECTION 11(a)(iii), a registration statement under the Act, with
respect to the securities purchasable upon exercise of the Rights or
issued in an exchange pursuant to SECTION 24 on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting
the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and
(B) the Expiration Date. The Company will also take such action as
may be appropriate under, or to ensure compliance with, the applicable
state securities laws in connection with the exercisability of the
Rights. The Company may temporarily suspend, for up to 90 days after
the date described in CLAUSE (I) of this SECTION 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company will issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension no
longer remains in effect. In addition, if the Company determines that
a registration statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights will not be exercisable in any jurisdiction if
the requisite qualification in such jurisdiction has not been
obtained, the exercise of such Rights is not permitted under
applicable law, or a registration statement has not been declared
effective.
(d) 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 will, at the time of delivery of the certificates for such
shares upon payment of the Purchase Price, be duly and validly
authorized and issued and fully paid and nonassessable.
11
<PAGE> 15
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes
and charges that may be payable in respect of the issuance or delivery
of the Rights Certificates and any Common Stock or other certificates
issued upon the exercise of Rights. The Company will not, however, be
required to pay any transfer tax that may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or
the issuance or delivery of Common Stock (or other securities, as the
case may be) in respect of a name other than that of the registered
holder of the Rights Certificates or to issue or deliver any Common
Stock or other certificates in a name other than that of the
registered holder until such tax has been paid (any such tax being
payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name
any Rights Share certificate is issued will, for all purposes, be deemed to
have become the record holder of such Rights Shares represented thereby, and
such certificate will be dated, on the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Common Stock (or
other securities, as the case may be) transfer books of the Company are closed,
such Person will be deemed to have become the record holder of the Rights
Shares on, and such certificate will be dated, the next succeeding Business Day
on which the Common Stock (or other securities, as the case may be) transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the Rights Certificate holders will not be entitled to any stockholder
rights with respect to Rights Shares, including, without limitation, the right
to vote, to receive dividends or other distributions, or to exercise any
preemptive rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided in this Agreement.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares, or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this SECTION 11.
(a) (i) In the event the Company at any time after
the date of this Agreement (A) declares a dividend on the
Common Stock payable in shares of Common Stock, (B) subdivides
the outstanding Common Stock, (C) combines the outstanding
Common Stock into a smaller number of shares, or (D) issues
any shares of its capital stock in a reclassification of the
Common Stock (including, without limitation, any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this SECTION
11(a) and SECTION 7(e), the Purchase Price in effect at the
time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and
the number and kind of
12
<PAGE> 16
shares of Common Stock or capital stock, as the case may be,
issuable on such date, will be proportionately adjusted so
that the holder of any Right exercised after such time will be
entitled to receive, upon payment of the Purchase Price then
in effect, the aggregate number and kind of shares of Common
Stock or capital stock, as the case may be, that, 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, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend,
subdivision, combination, or reclassification. If an event
occurs that would require an adjustment under both this
SECTION 11(a)(i) and SECTION 11(a)(ii), the adjustment
provided for in this SECTION 11(a)(i) will be in addition to,
and will be made prior to, any adjustment required pursuant to
SECTION 11(a)(ii).
(ii) In the event that any Person, alone or
together with its Affiliates and Associates, at any time after
the Rights Dividend Declaration Date, becomes an Acquiring
Person, then, proper provision will be made so that each Right
holder (except as provided in SECTION 7(e)) will thereafter
have the 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 Rights Shares equal to the
result obtained by (x) multiplying the then current Purchase
Price by the then number of Rights Shares for which a Right is
then exercisable and (y) dividing that product by 50% of the
Current Market Price (defined in SECTION 11(d)) per share of
Common Stock on the date such Person became an Acquiring
Person (such number of Rights Shares, the "Adjustment
Shares").
(iii) In the event that the number of shares of
Common Stock that are authorized by the Company's articles of
incorporation but not issued, or issued but not outstanding,
are not sufficient to permit the exercise in full of the
Rights in accordance with SECTION 11(a)(ii), the Company will,
upon the exercise of a Right and payment of the applicable
Purchase Price, (A) determine the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current
Value"), and (B) with respect to each Right (subject to
SECTION 7(e)), make adequate provision to substitute for the
Adjustment Shares (1) cash, (2) a reduction in the Purchase
Price, (3) other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred
stock), that a Requisite Majority has deemed to have
essentially the same rights, privileges and preferences as
shares of Common Stock ("Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal
to the Current Value, where such aggregate value has been
conclusively determined by a Requisite Majority based upon the
advice of a nationally recognized investment banking firm
selected by a Requisite Majority; provided, however, that if
the Company has not made adequate provision to deliver value
pursuant to CLAUSE (B) above within 30 days following the
first occurrence of a Section 11(a)(ii) Event, then the
Company will be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment
13
<PAGE> 17
of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares or cash
have an aggregate value equal to the Spread. The term
"Spread" means the excess of (i) the Current Value over (ii)
the Purchase Price. If the Board of Directors determines in
good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the 30-day period set forth above may
be extended to the extent necessary, but not more than 90 days
after the Section 11(a)(ii) Triggering Event, in order that
the Company may seek shareholder approval for the
authorization of such additional shares (such 30-day period,
as it may be extended, being the "Substitution Period"). To
the extent that action is to be taken pursuant to this SECTION
11(a)(iii), the Company (1) will provide, subject to SECTION
7(e), that such action will apply uniformly to all outstanding
Rights, and (2) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to
seek any required shareholder approval or to decide the
appropriate form of distribution to be made and the value
thereof. In the event of any such suspension, the Company
will issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the
suspension no longer remains in effect. For purposes of this
SECTION 11(a)(iii), the Current Value of each Adjustment Share
will be the Current Market Price per share of the Common Stock
on the effective date of the Section 11(a)(ii) Event and the
per share or per unit value of any Common Stock Equivalent
will be deemed to equal the Current Market Price per share of
the Common Stock on such date.
(b) In case the Company fixes a record date for the
issuance of rights, options or warrants to all holders of Common Stock
entitling them to subscribe for or purchase (for a period expiring
within 45 calendar days after such record date) Common Stock (and/or
Common Stock Equivalents) (or securities convertible into Common
Stock) at a price per share of Common Stock (or having a conversion
price per share, if a security convertible into Common Stock) less
than the Current Market Price per share of Common Stock on such record
date, the Purchase Price to be in effect after such record date will
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, (i) the numerator of which is
the number of shares of Common Stock outstanding on such record date,
plus the number of shares of Common Stock that the aggregate offering
price of the total number of shares of Common Stock (and/or Common
Stock Equivalents) so to be offered (or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and (ii) the denominator of
which is the number of shares of Common Stock outstanding on such
record date, plus the number of additional shares of Common Stock
(and/or Common Stock Equivalents) to be offered for subscription or
purchase (or into which the convertible securities so to be offered
are initially convertible). In the event that the number of shares of
Common Stock issuable under the terms of a convertible security, or
the conversion or exercise price of such convertible security, changes
after the initial issuance of such convertible security, an adjustment
will be made to the Purchase Price that conforms with the adjustment
set forth in this SECTION 11(b). In case such
14
<PAGE> 18
subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such
consideration will be as conclusively determined in good faith by the
Board of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent and will be
binding on the Rights Agent and the holders of the Rights. Shares of
Common Stock owned by or held for the account of the Company will be
deemed not to be outstanding for the purpose of any such computation.
Such adjustment will 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 will be adjusted to be the Purchase Price
that would then be in effect if such record date had not been fixed.
(c) In case the Company fixes a record date for 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 will be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, (i) the numerator of which is the Current
Market Price per share of Common Stock on such record date, less the
fair market value (as conclusively determined in good faith by the
Board of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent) of the portion
of the cash, assets, or evidences of indebtedness so to be distributed
or of such subscription rights or warrants applicable to a share of
Common Stock and (ii) the denominator of which is such Current Market
Price per share of Common Stock. Such adjustments will be made
successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price will be
adjusted to be the Purchase Price that would have been in effect if
such record date had not been fixed.
(d) The "Current Market Price" per share of Common Stock
on any date will 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 Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of
such Common Stock of (i) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (ii) any
subdivision, combination, or reclassification of such Common Stock,
and the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination, or reclassification has
not occurred prior to the commencement of the requisite 30 Trading Day
period, as set forth above, then, and in each such case, the Current
Market Price will be properly adjusted to take into account
ex-dividend trading. The closing price for each day will be the last
sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked
15
<PAGE> 19
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if
the shares of Common Stock are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use, or, if on any
such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors. If on any such date no
market maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board of
Directors will be used. If the Common Stock is not publicly held or
not so listed or traded, Current Market Price per share will mean the
fair value per share as determined in good faith by the Board of
Directors, the determination of which will be described in a statement
filed with the Rights Agent and will be conclusive for all purposes.
(e) Anything in this Agreement to the contrary
notwithstanding, no adjustment in the Purchase Price will be required
unless such adjustment would require an increase or decrease of at
least one percent (1%) in the Purchase Price; provided, however, that
any adjustments that by reason of this SECTION 11(e) are not required
to be made will be carried forward and taken into account in any
subsequent adjustment. All calculations under this SECTION 11 will be
made to the nearest cent or to the nearest one-hundredth of a share of
Common Stock. Notwithstanding the first sentence of this SECTION
11(e), any adjustment required by this SECTION 11 will be made no
later than the earlier of (i) three (3) years from the date of the
transaction that mandates such adjustment or (ii) the Final Expiration
Date.
(f) If, as a result of an adjustment made pursuant to
SECTION 11(a)(ii) or SECTION 13(a), the holder of any Right thereafter
exercised becomes entitled to receive any shares of capital stock
other than Common Stock, then the number of such other shares so
receivable upon exercise of any Right and the Purchase Price will 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
Common Stock contained in SECTIONS 11(a), (b), (c), (e), (g), (h),
(i), (j), (k), (m), and (q) and the provisions of SECTIONS 7, 9, 10,
13, and 14 with respect to the Common Stock will apply on like terms
to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price under this
Agreement will evidence the right to purchase, at the adjusted
Purchase Price, the number of Rights Shares purchasable from time to
time under this Agreement, all subject to further adjustment as
provided in this Agreement.
16
<PAGE> 20
(h) Unless the Company has exercised its election as
provided in SECTION 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in SECTIONS 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
will thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Rights Shares (calculated to the
nearest one-hundredth) obtained by (i) multiplying (x) the number of
Rights Shares covered by a Right immediately prior to this adjustment,
by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of Rights Shares purchasable upon
the exercise of a Right. Each of the Rights outstanding after such an
adjustment in the number of Rights will be exercisable for the number
of Rights Shares for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights will become that number of Rights
(calculated to the nearest one-hundredth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company will 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, will be
at least ten Business 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 will, 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 14, the additional Rights
to which such holders are entitled as a result of such adjustment, or,
at the option of the Company, will 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 are
entitled after such adjustment. Rights Certificates so to be
distributed will be issued, executed, and countersigned in the manner
provided for in this Agreement (and may bear, at the option of the
Company, the adjusted Purchase Price) and will be registered in the
names of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the Rights Shares, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per Rights Shares and the number of Rights Shares that were
expressed in the initial Rights Certificates issued under this
Agreement.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value, if
any, of the number of Rights Shares, the
17
<PAGE> 21
Company will take any corporate action that may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue such number of fully paid and nonassessable Rights
Shares at such adjusted Purchase Price.
(l) In any case in which this SECTION 11 requires that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of Rights Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of Rights Shares and other capital
stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company will deliver to such
holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring
such adjustment.
(m) Anything in this SECTION 11 to the contrary
notwithstanding, the Company will be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this SECTION 11, as and to the extent that, in its good
faith judgment, the Board of Directors of the Company determines it to
be advisable in order that any (i) consolidation or subdivision of the
Common Stock, (ii) issuance wholly for cash of any shares of Common
Stock at less than the current market price, (iii) issuance wholly for
cash of shares of Common Stock or securities that by their terms are
convertible into or exchangeable for shares of Common Stock, (iv)
stock dividends, or (v) issuance of rights, options, or warrants
referred to in this SECTION 11, hereafter made by the Company to
holders of its Common Stock will not be taxable to such stockholders.
(n) The Company covenants and agrees that it will not, at
any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction that
complies with SECTION 11(o)), (ii) merge with, from, or into any other
Person (other than a Subsidiary of the Company in a transaction that
complies with SECTION 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of
which complies with SECTION 11(o)), if (x) at the time of or
immediately after such consolidation, merger, or sale there are any
rights, warrants, or other instruments or securities outstanding or
agreements in effect that could reasonably be expected to
substantially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights or (y) prior to, simultaneously with, or
immediately after, such consolidation, merger, or sale, the
stockholders of the Person that constitutes, or would constitute, the
"Principal Party" for purposes of SECTION 13(a) have received a
distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
18
<PAGE> 22
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by SECTION 23 or
SECTION 27, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, in the event that the Company at any time after the Rights
Dividend Declaration Date and prior to the Distribution Date (i)
declares a dividend on the outstanding shares of Common Stock payable
in shares of Common Stock, (ii) subdivides the outstanding shares of
Common Stock, or (iii) combines the outstanding shares of Common Stock
into a smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, will be proportionately
adjusted so that the number of Rights thereafter associated with each
share of Common Stock following any such event will equal the result
obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction
the numerator of which is the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which is the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
(q) In the event that the Rights become exercisable
following a Section 11(a)(ii) Event, the Company, by action of a
Requisite Majority, may permit the Rights, subject to SECTION 7(e), to
be exercised for 50% of the shares of Common Stock (or cash or other
securities or assets to be substituted for the Adjustment Shares
pursuant to SECTION 11(a)(iii)) that would otherwise be purchasable
under SECTION 11(a) in consideration of the surrender to the Company
of the Rights so exercised and without other payment of the Purchase
Price. Rights exercised under this SECTION 11(q) will be deemed to
have been exercised in full and will be cancelled.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in SECTION 11 or SECTION
13, the Company will (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 a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock) in
accordance with SECTION 25. The Rights Agent will be fully protected in
relying on any such certificate and on any adjustment contained in such
certificate, and shall not be obligated or responsible for calculating any
adjustment, nor shall it be deemed to have knowledge of such an adjustment
unless and until it shall have received such certificate.
19
<PAGE> 23
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, (i) the Company consolidates with, or
merges with, or into, any other Person (other than a Subsidiary of the
Company in a transaction that complies with SECTION 11(o)), and the
Company is not the continuing or surviving Person of such
consolidation or merger; (ii) any Person (other than a Subsidiary of
the Company in a transaction that complies with SECTION 11(o))
consolidates with, or merges with, or into, the Company, and the
Company is the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock is
changed into or exchanged for stock or other securities of any other
Person or cash or any other property; or (iii) the Company sells or
otherwise transfers (or one or more of its Subsidiaries sells or
otherwise transfers), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which
complies with SECTION 11(o)), then, and in each such case (except as
contemplated by SECTION 13(d)), proper provision will be made so that
(A) each holder of a Right, except as provided in SECTION 7(e) or
SECTION 13(e), will thereafter have the right to receive, upon the
exercise of such Right at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable, and freely tradable
shares of Common Stock of the Principal Party (as defined below), not
subject to any liens, encumbrances, preemptive rights, rights of first
refusal, or other adverse claims, as are equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of
Rights Shares for which a Right is exercisable immediately prior to
the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of such Rights Shares for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and (2) dividing that product (which,
following the first occurrence of a Section 13 Event, will be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price per share of the Common
Stock of such Principal Party on the date of consummation of such
Section 13 Event; (B) such Principal Party will thereafter be liable
for, and will assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement; (C)
the term "Company" will thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
SECTION 11 will apply only to such Principal Party following the first
occurrence of a Section 13 Event; (D) such Principal Party will take
such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with
the consummation of any such transaction as may be necessary to assure
that the provisions of this Agreement will thereafter be applicable,
as nearly as may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (E) the
provisions of SECTION 11(a)(ii) will be of no effect following the
first occurrence of any Section 13 Event.
20
<PAGE> 24
(b) "Principal Party" means
(i) in the case of any transaction described in
CLAUSE (i) or (ii) of the first sentence of SECTION 13(a), the
Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
CLAUSE (iii) of the first sentence of SECTION 13(a), the
Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any
such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" will refer to such
other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, with Common
Stock that is and has been so registered, "Principal Party"
will refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.
(c) The Company will not consummate any such
consolidation, merger, sale, or transfer unless the Principal Party
has a sufficient number of authorized shares of its Common Stock that
have not been issued or reserved for issuance to permit the exercise
in full of the Rights in accordance with this SECTION 13 and unless
prior thereto the Company and such Principal Party have executed and
delivered to the Rights Agent a supplemental agreement providing for
the Principal Party to assume and perform the terms set forth in
SECTIONS 13(a) and (b) and further providing that, as soon as
practicable after the date of any consolidation, merger, or transfer
mentioned in SECTION 13(a), the Principal Party 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, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Final
Expiration Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and
each of its Affiliates that comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
21
<PAGE> 25
(d) In the event that the Rights become exercisable under
SECTION 13(a), the Company, by action of a Requisite Majority, may
agree with the Principal Party that the Principal Party may permit the
Rights to be exercised for 50% of the Common Shares of the Principal
Party that would otherwise be purchasable under SECTION 13(a), in
consideration of the surrender to the Principal Party, as the
successor to the Company under SECTION 13(a)(ii), of the Rights so
exercised and without other payment of the Purchase Price. Rights
exercised under this SECTION 13(e) will be deemed to have been
exercised in full and cancelled.
(e) The provisions of this SECTION 13 will similarly
apply to successive mergers, consolidations, and sales or other
transfers. In the event that a Section 13 Event occurs at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights that
have not theretofore been exercised will thereafter become exercisable
in the manner described in SECTION 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company will not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in
SECTION 11(p), or to distribute Rights Certificates that evidence
fractional Rights. In lieu of such fractional Rights, there will 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 purposes of this SECTION 14(a), the current market
value of a whole Right will be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the
Rights for any day will be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Rights are listed
or admitted to trading, or if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the Rights
the fair value of the Rights on such date as conclusively determined
in good faith by the Board of Directors of the Company will be used.
(b) The Company will not be required to issue fractions
of shares of Common Stock upon exercise of the Rights or to distribute
certificates that evidence fractional
22
<PAGE> 26
shares of Common Stock. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as provided in this Agreement an
amount in cash equal to the same fraction of the Current Market Price
of one share of Common Stock as of the Trading Day immediately prior
to the date of such exercise.
(c) The holder of a Right, by the acceptance of the
Rights, expressly waives the right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as permitted by
this SECTION 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement 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, on its own behalf and for its
own benefit, enforce, and may institute and maintain any suit, action, or
proceeding against the Company to enforce, or otherwise act in respect of, its
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 will be entitled to specific
performance of the obligations under this Agreement and injunctive relief
against actual or threatened violations of the obligations under this Agreement
of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right
by accepting the Rights 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 or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer, and with the appropriate forms and
certificates fully executed;
(c) subject to SECTION 6(a) and SECTION 7(f), 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 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, will be affected by any notice to the contrary; and
23
<PAGE> 27
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent will have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree, or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory, or administrative agency or commission, or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the
Company will use its reasonable best efforts to have any such order,
decree, or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate will be entitled to vote or
receive dividends or be deemed for any purpose the holder of the number of
shares of Common Stock or any other securities of the Company that may at any
time be issuable on the exercise of the Rights represented thereby, nor will
anything contained in this Agreement 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, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in SECTION 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate have been exercised in accordance
with the provisions of this Agreement.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it under this
Agreement 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 under this
Agreement. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, or expense,
incurred without gross negligence, bad faith, or willful misconduct on
the part of the Rights Agent, for anything done or omitted to be done
by the Rights Agent in connection with the acceptance and
administration of this Agreement, including, without limitation, the
costs and expenses of defending against any claim of liability. The
costs and expenses of enforcing this right of indemnification shall
also be paid by the Company. The indemnification provided for
hereunder shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent may conclusively rely upon and will
be protected and will 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
24
<PAGE> 28
to be genuine and to be signed, executed, and, where necessary,
verified or acknowledged, by the proper Person or Persons.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any Person into or with which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation
to which the Rights Agent or any successor Rights Agent is a party, or
any corporation succeeding to the corporate trust or shareholder
services business of the Rights Agent or any successor Rights Agent,
will 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 to this Agreement; provided, however, that such
corporation would be eligible for appointment as a successor Rights
Agent under the provisions of SECTION 21. In case at the time such
successor Rights Agent succeeds to the agency created by this
Agreement, any of the Rights Certificates have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates have not 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 will have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is
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 have not 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 will
have the full force provided in the Rights Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Rights Certificates, by their acceptance of such Rights Certificates, will
be bound:
(a) Before the Rights Agent acts or refrains from acting,
the Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion
25
<PAGE> 29
of such counsel will 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 deems it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person or Adverse Person and the determination of "Current
Market Price") be proved or established by the Company prior to taking
or suffering any action under this Agreement, such fact or matter
(unless other evidence in respect of such fact or matter is
specifically prescribed in this Agreement) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board, the Chief Executive Officer, the Chief
Operating Officer, the President, any Vice President, the Treasurer,
any Assistant Treasurer, the Secretary, or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate
will 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 will be liable under this Agreement
only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates),
but all such statements and recitals are and will be deemed to have
been made by the Company only.
(e) The Rights Agent will not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery of this Agreement (except the due execution of this Agreement
by the Rights Agent) or in respect of the validity or execution of any
Rights Certificate (except its countersignature); nor will it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor will it
be responsible for any adjustment required under the provisions of
SECTION 11 or SECTION 13, or responsible for the manner, method, or
amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor will it by any act under this
Agreement be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be
issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock will, when so issued, be validly
authorized or issued, fully paid, or nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge, and deliver or cause to be performed, executed,
acknowledged, and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
26
<PAGE> 30
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
under this Agreement from the Chairman of the Board, the Chief
Executive Officer, the Chief Operating Officer, the President, any
Vice President, the Secretary, any Assistant Secretary, the Treasurer,
or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and
it will not be liable for any action taken or suffered to be taken by
it in good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for those instructions. Any
application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or
after the date specified in such application (which date shall not be
less than ten Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to
such application subject to the proposed action or omission and/or
specifying the action to be taken or omitted.
(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 pecuniary
interested in any transaction in which the Company may be interested,
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 in this Agreement will preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers vested by this Agreement in it or perform any duty
under this Agreement either itself or by or through its attorneys or
agents, and the Rights Agent will not be answerable or accountable for
any act, default, neglect, or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act,
default, neglect, or misconduct.
(j) No provision of this Agreement will 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 under this
Agreement or in the exercise of its rights if there are 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 Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to clause 1 or 2 of such certificate, the Rights Agent will
not take any further action with respect to such requested exercise of
transfer without first consulting with the Company.
27
<PAGE> 31
(l) The Rights Agent shall not be required to take notice
or be deemed to have notice of any fact, event or determination
(including, without limitation, any dates or events defined in this
Agreement or the designation of any Person as an Acquiring Person,
Affiliate or Associate) under this Agreement unless and until the
Rights Agent shall be specifically notified in writing by the Company
of such fact, event or determination.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock, by registered or certified mail, and, at
the expense of the Company, to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock, by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent resigns or is removed or
otherwise becomes incapable of acting, the Company will appoint a successor to
the Rights Agent. If the Company fails to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who will,
with such notice, submit such holder's Rights Certificate for inspection by the
Company), then any registered holder of any Rights Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
will be a corporation organized and doing business under the laws of the United
States or a State of the United States, in good standing, that is authorized
under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and that has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $25,000,000. After appointment, the successor Rights Agent will 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, except that
the predecessor Rights Agent will deliver and transfer to the successor Rights
Agent any property at the time held by it under this Agreement 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 will file notice of such appointment in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock and the Common Stock,
and mail a notice of such appointment in writing to the registered holders of
the Rights Certificates. Failure to give any notice provided for in this
SECTION 21, however, or any defect in such notice, will not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, in its discretion, issue new Rights Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number, kind or class
28
<PAGE> 32
of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) will, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement,
granted or awarded as of the Distribution Date, or upon the exercise,
conversion, or exchange of securities issued by the Company, and (b) may, in
any other case, if deemed necessary or appropriate by the Board of Directors of
the Company, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (y) no
such Rights Certificate will be issued if, and to the extent that, the Company
is advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (z) no such Rights Certificate will be
issued if, and to the extent that, appropriate adjustment has otherwise been
made in lieu of the issuance of such Rights Certificate.
Section 23. Redemption and Termination.
(a) The Company may, at its option, by action of a
Requisite Majority, at any time prior to the earlier of (i) the
Distribution Date, or (ii) the Final Expiration Date, redeem all but
not fewer than all the then outstanding Rights at the Redemption Price
(the date of such redemption, the "Redemption Date"), and the Company,
at its option, may pay the Redemption Price either in cash or Common
Stock or other securities of the Company, deemed by the Board of
Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of a Requisite Majority
ordering the redemption of the Rights, evidence of which has been
filed with the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights will be to receive the
Redemption Price. Promptly after the action of a Requisite Majority
ordering the redemption of the Rights, the Company will give notice of
such redemption to the Rights Agent and to the holders of the then
outstanding Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Stock. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made. Any notice that is mailed in the
manner in this Agreement provided will be deemed given, whether or not
the holder receives such notice. In any case, failure to give such
notice by mail, or any defect in the notice, to any particular holder
of Rights shall not affect the sufficiency of the notice to other
holders of Rights.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after a Triggering Event, exchange all or part of
the then outstanding and exercisable
29
<PAGE> 33
Rights (which will not include Rights that have become void pursuant
to the provisions of SECTION 7(e) hereof) for shares of Common Stock,
each Right being exchangeable for one share of Common Stock,
appropriately adjusted to reflect any transaction specified in SECTION
11(a)(i) occurring after the Record Date (such number of shares of
Common Stock issuable in exchange for one Right being referred to
herein as the "Exchange Shares"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at
any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any of its
Subsidiaries or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such
Plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
subsection (a) of this SECTION 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive the Exchange Shares. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent. Any
notice that is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of
Rights (other than Rights which have become void pursuant to the
provisions of SECTION 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Stock issued but not outstanding, or authorized but unissued,
to permit any exchange of Rights as contemplated in accordance with
this SECTION 24, the Company shall take all such action as may be
necessary to authorize additional Common Stock for issuance upon
exchange of the Rights or shall take such other action specified in
SECTION 11(a)(iii) hereof.
(d) The Company shall not be required to issue fractions
of shares of Common Stock to distribute certificates which evidence
fractional Common Stock. In lieu of such fractional shares, the
Company shall pay to the registered holders of the Right Certificates
with regard to which such fractional shares would otherwise be
issuable an amount in cash equal to the same fraction of the Current
Market Price of a whole share of Common Stock. For the purposes of
this SUBSECTION (d), the Current Market Value of a whole share of
Common Stock shall be determined as of the Trading Day immediately
prior to the date of exchange pursuant to this SECTION 24.
30
<PAGE> 34
Section 25. Notice of Certain Events.
(a) In case the Company proposes, at any time after the
Distribution Date, (i) 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 (ii)
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 (iii) to effect any reclassification of its Common Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Common Stock), or (iv) to effect any
consolidation or merger into, or with any other Person (other than a
Subsidiary of the Company in a transaction that complies with SECTION
11(o)), 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
transaction or a series of related transactions, of more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Company or
any of its Subsidiaries in one or more transactions each of which
complies with SECTION 11(o)), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company will give to each holder of a Rights Certificate, to the
extent feasible and in accordance with SECTION 26, a notice of such
proposed action, which will 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 will be
so given in the case of any action covered by CLAUSE (i) or (ii) above
at least 20 days prior to the record date for determining holders of
the shares of 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 is the
earlier.
(b) In case of a Triggering Event, then (i) the Company
will as soon as practicable give to each holder of a Rights
Certificate, to the extent feasible and in accordance with SECTION 26,
a notice of the occurrence of such event, which will specify the event
and the consequences of the event to holders of Rights under this
Agreement, and (ii) all references in SECTION 25(a) to Common Stock
will be deemed thereafter to refer to other securities, if
appropriate.
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 will 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:
31
<PAGE> 35
Suiza Foods Corporation
3811 Turtle Creek Boulevard
Suite 1300
Dallas, Texas 75219
Attention: Chief Financial Officer
with a copy to:
Hughes & Luce, L.L.P.
1717 Main Street
Suite 2800
Dallas, Texas 75201
Attention: William A. McCormack
Subject to the provisions of SECTION 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent will be sent by
registered or certified mail and will be deemed given upon receipt, addressed
(until another address is filed in writing with the Company) as follows:
Harris Trust and Savings Bank
1601 Elm Street, Suite 2320
Dallas, Texas 75201
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) will 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. Supplement and Amendments. The Company, by action of
its Board of Directors, and the Rights Agent may from time to time supplement
or amend this Agreement without the approval of any holders of Rights in order
to cure any ambiguity, to correct or supplement any provision contained in this
Agreement that may be defective or inconsistent with any other provisions in
this Agreement, or to make any other provisions in regard to matters or
questions arising under this Agreement that the Company and Rights Agent may
deem necessary or desirable and that will be consistent with, and for the
purpose of fulfilling, the objectives of the Board of Directors in adopting
this Agreement; provided, however, that following the Stock Acquisition Date,
this Agreement shall not be amended in any manner that would adversely affect
the basic economic terms of the Rights; provided, further, that, once the
Rights are no longer redeemable in accordance with SECTION 23 of this
Agreement, no amendment to this Agreement may have the effect of making the
Rights redeemable. Notwithstanding anything in this Agreement to the contrary,
no supplement or amendment that changes the rights and duties of the Rights
Agent under this Agreement will be effective against the Rights Agent without
the execution of such supplement or amendment by the Rights Agent.
32
<PAGE> 36
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent will bind
and inure to the benefit of their respective successors and assigns under this
Agreement.
Section 29. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, will 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 (with, where specifically
provided for in this Agreement, the concurrence of the Continuing Directors)
will have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors
(with, where specifically provided for in this Agreement, the concurrence of
the Continuing Directors) or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (a) interpret the provisions of this
Agreement, and (b) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights, to amend the Agreement or to
extend the Distribution Date). All such actions, calculations, interpretations
and determinations (including, for purposes of CLAUSE (y) below, all omissions
with respect to the foregoing) that are done or made by the Board of Directors
(with, where specifically provided for in this Agreement, the concurrence of
the Continuing Directors) in good faith, will (x) be final, conclusive, and
binding on the Company, the Rights Agent, the holders of the Rights, and all
other parties, and (y) not subject the Board of Directors or the Continuing
Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement will be construed to give to any Person other than the Company, the
Rights Agent, and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy, or claim under this Agreement; and this Agreement will
be for the sole and exclusive benefit of the Company, the Rights Agent, and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, or unenforceable, the remainder of the
terms, provisions, covenants, and restrictions of this Agreement will remain in
full force and effect and will in no way be affected, impaired, or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant, or restriction is held by such
court or authority to be invalid, void, or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in SECTION 23 will
be reinstated and will not expire until the Close of Business on the tenth
Business Day following the date of such determination by the Board of
Directors. Without limiting the foregoing, if any
33
<PAGE> 37
provision requiring action by a Requisite Majority is held by any court of
competent jurisdiction or other authority to be invalid, void, or
unenforceable, such determination will then be made by the Board of Directors
of the Company in accordance with applicable law and the Company's articles of
incorporation and by-laws.
SECTION 32. GOVERNING LAW. THIS AGREEMENT, EACH RIGHT, AND EACH
RIGHTS CERTIFICATE ISSUED UNDER THIS AGREEMENT WILL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS TO
THE RIGHTS AND OBLIGATIONS OF THE RIGHTS AGENT, WHICH SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts will for all purposes be
deemed to be an original, and all such counterparts will together constitute
but one and the same instrument.
Section 34. Interpretation. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and will not
control or affect the meaning or construction of any of the provisions of this
Agreement. References in this Agreement to Sections and Exhibits are
references to the Sections of and Exhibits to this Agreement unless the context
requires otherwise. In this Agreement, the word "or" is not exclusive.
34
<PAGE> 38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
Attest: SUIZA FOODS CORPORATION
By: /s/ Tracy L. Noll
------------------------------------------
Name: Tracy L. Noll
----------------------------------------
Title: Vice President
---------------------------------------
Attest: HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
By: /s/ Mark Asbury
------------------------------------------
Name: Mark Asbury
----------------------------------------
Title: Vice President
---------------------------------------
35
<PAGE> 39
Exhibit A
to Rights Agreement
Certificate No. R-
[FORM OF RIGHTS CERTIFICATE]
________ Rights
NOT EXERCISABLE AFTER MARCH 18, 2008 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID.
Rights Certificate
SUIZA FOODS CORPORATION
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 March 6, 1998 (as amended from time to time,
the "Rights Agreement"), between Suiza Foods Corporation, a Delaware
corporation (the "Company"), and Harris Trust and Savings Bank (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 p.m. (Dallas,
Texas time) on March 18, 2008 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one fully paid,
nonassessable share of Common Stock (the "Common Stock") of the Company, at a
purchase price of $210 per share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares that may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of March 18, 1998 based on the
Common Stock as constituted at such date. As provided in the Rights Agreement,
the Purchase Price and the number and kind of shares of Common Stock or other
securities, that may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and adjustment upon the
happening of certain events.
This Rights Certificate is subject to all of the terms, provisions,
and conditions of the Rights Agreement, which terms, provisions, and conditions
are incorporated herein by reference and made a part of this certificate and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties, and immunities hereunder of
the Rights Agent, the Company, and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the certain circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on file at
1
<PAGE> 40
the above-mentioned office of the Rights Agent and are also available upon
written request to the Rights Agent. All capitalized terms not otherwise
defined have the meaning set forth in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person, (ii) a
transferee of any such Acquiring Person, Associate, or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of
a Person who, after such transfer, became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person, such Rights will become null and void and
no holder of this certificate will have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of Common
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered have entitled such holder to purchase. If this Rights Certificate
is exercised in part, the holder will be entitled to receive upon surrender of
this certificate another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $0.01 per Right. In addition, in certain circumstances the
Rights may be exchanged, in whole or in part, for shares of the Common Stock.
Immediately upon the action of the Board of Directors of the Company
authorizing any such exchange, and without any further action or any notice,
the Rights (other than Rights that are not subject to such exchange) will
terminate and the Rights will only enable holders to receive the shares
issuable upon such exchange. Under certain circumstances set forth in the
Rights Agreement, the decision to redeem the Rights will require the
concurrence of a majority of the Continuing Directors.
No fractional shares of Common Stock will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate will 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 that may at any time be
issuable on the exercise hereof, nor will anything contained in the Rights
Agreement or herein be construed to confer upon the holder of this certificate,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action,
or, to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this
Rights Certificate have been exercised as provided in the Rights Agreement.
2
<PAGE> 41
This Rights Certificate will not be valid or obligatory for any
purpose until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal.
Dated as of
--------------------------
ATTEST: SUIZA FOODS CORPORATION
- --------------------------- By:
-------------------------------------
Title:
Countersigned: ----------------------------------
- ---------------------------
By
------------------------
Authorized Signature
3
<PAGE> 42
[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 transfer 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. The undersigned acknowledges
that this Assignment is voidable by the Company if it contains any material
misstatement of fact by the transferor.
Dated:
------------------------ ---------------------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned, or
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:
------------------------ ---------------------------------------------
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.
4
<PAGE> 43
FORM OF ELECTION TO PURCHASE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
To: SUIZA FOODS CORPORATION:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security or other identifying number:
-------------
Please print name and address:
----------------------------------------
-----------------------------------------------------------------------
If such number of Rights are not all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
will be registered in the name of and delivered to:
Please insert social security or other identifying number:
-------------
Please print name and address:
----------------------------------------
-----------------------------------------------------------------------
The undersigned acknowledges that this Election to Purchase is
voidable by the Company if it contains any material misstatement of fact by the
undersigned.
Dated:
------------------------ ---------------------------------------------
Signature
Signature Guaranteed:
5
<PAGE> 44
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Adverse Person or an Affiliate or Associate of any such Acquiring
Person or an Adverse Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person or Adverse Person or
an Affiliate or Associate of an Acquiring Person or an Adverse Person.
Dated:
------------------------ ---------------------------------------------
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.
6
<PAGE> 45
Exhibit B
to Rights Agreement
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF SUIZA FOODS CORPORATION COMMON STOCK
On February 27, 1998, the Board of Directors of Suiza Foods
Corporation(the "Company") declared a dividend of one common share purchase
right (a "Right") for each outstanding share of common stock, $.01 par value
per share (the "Common Shares"), of the Company. The dividend will be made to
the shareholders of record at the close of business on March 18, 1998 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company one Common Share, at a price of $210 (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement dated as of March 6, 1998 (the "Rights Agreement") between the
Company and Harris Trust and Savings Bank as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten Business Days following a public
announcement that a person or group of affiliated or associated persons has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Common Shares (an "Acquiring Person") or (ii) ten Business
Days following the commencement of, or announcement of an intention to make, a
tender offer or exchange offer, the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of such outstanding
Common Shares (the earlier of such dates being the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a copy
of this Summary of Rights attached to the certificate. A majority of the
Continuing Directors (not associated with Acquiring Person) may in their
discretion vote to extend the Distribution Date.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding even without such notation or a copy of this Summary
of Rights being attached to such Certificate, will also constitute the transfer
of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on March 18, 2008 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed by
the Company, in each case, as described below.
B-1
<PAGE> 46
The Purchase Price payable and the number of Common Shares 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
Shares, (ii) upon the grant to holders of the Common Shares of certain rights
or warrants to subscribe for or purchase Common Shares at a price, or
securities convertible into Common Shares with a conversion price, less than
the then current market price of the Common Shares or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness or
assets or of subscription rights or warrants (other than those referred to
above).
In the event that any person or entity becomes an Acquiring Person
(the beneficial owner of 15% or more of the Common Shares), provision will be
made so that each holder of a Right, other than Rights beneficially owned by
the Acquiring Person (which will then be void), will have the right to purchase
from the Company upon exercise that number of Common Shares having a market
value of two times the applicable exercise price of the Right ($210).
The Rights Agreement excludes from the definition of Acquiring Persons
who certify to the Company that they inadvertently acquired in excess of 14.9%
of the outstanding Common Shares and thereafter divest such excess Common
Shares or who acquire 15% or more of the Common Shares in a Permitted
Transaction. A "Permitted Transaction" is a stock acquisition or tender or
exchange offer pursuant to a definitive agreement which would result in a
person beneficially owning 15% or more of the Common Shares and which has been
approved by the Board of Directors (including a majority of the Continuing
Directors) prior to the execution of the agreement or the public announcement
of the offer.
In the event that the Company is acquired in a merger or other
business combination transaction, or 50% or more of its consolidated assets or
earning power are sold, proper provisions will be made so that each holder of a
Right will have the right to purchase from the acquiring company, upon the
exercise of the Right at the then applicable exercise price, that number of
shares of common stock of the acquiring company that at the time of such
transaction will have a market value of two times the applicable exercise price
of the Right ($210).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Common Shares will be issued and, in lieu
of such fractional shares, an adjustment in cash will be made based on the
market price of the Common Shares on the last trading day prior to the date of
exercise.
After a person becomes an Acquiring Person, the Company's Board of
Directors may exchange the Rights, other than those Rights owned by the
Acquiring Person, in whole or in part, at an exchange ratio of one share of
Common Stock per Right, subject to adjustment. However, the Board of Directors
cannot conduct an exchange at any time after any Person, together with its
Affiliates and Associates, becomes the Beneficial Owner of 50% or more of the
outstanding Common Stock.
B-2
<PAGE> 47
At any time prior to a Distribution Date, a Requisite Majority may
redeem the Rights in whole, but not in part, at a price of $0.01 per Right (the
"Redemption Price"). In addition, the Board of Directors may extend or reduce
the period during which the Rights are redeemable, so long as the Rights are
redeemable at the time of such extension or reduction. 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.
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 to extend the Final Expiration Date, except that from and after the
date any Person becomes an Acquiring Person, no such amendment may adversely
affect the economic interests of the holders of the Rights.
Until a Right is exercised, the holder of the Right, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote, or to receive dividends.
B-3
<PAGE> 1
EXHIBIT 20.1
Monday March 9, 8:19 am Eastern Time
Company Press Release
Suiza Foods Corporation Adopts Shareholders Rights Plan
DALLAS--(BUSINESS WIRE)--March 9, 1998--Suiza Foods Corporation (NYSE:SZA -
news) announced today that its Board of Directors has adopted a Shareholders
Rights Plan pursuant to which a dividend of one Common Share Purchase Right
will be distributed for each share of Suiza Foods outstanding Common Stock held
as of the close of business on March 18, 1998.
Each Right will entitle the shareholder to buy one share of Common Stock for
$210. Initially, the rights will not be exercisable and will automatically
trade with the Common Stock. The Rights will become exercisable only following
the acquisition of 15% or more of the Company's voting stock, or following the
announcement of a tender offer or exchange offer to acquire any interest of 15%
or more by a person or group, without prior consent of the Suiza Foods Board of
Directors. In such event, each rightholder (other than the 15% acquiror) may
exercise each Right to purchase $210 worth of Suiza Common Stock at one-half of
the then market price.
Gregg L. Engles, Chairman and Chief Executive Officer of Suiza Foods
Corporation, commented: "The Board's decision to adopt the Shareholders Rights
Plan was not a response to any known attempt to gain control of the Company. The
Plan and the Rights are designed to assure that all of Suiza's stockholders
receive fair and equal treatment in the event of any proposed takeover of the
Company. It enables the stockholders to realize the long-term value of their
investment in the Company, and to guard against partial tender offers,
squeeze-outs, open market accumulations and other abusive tactics to gain
control of Suiza without paying all stockholders a control premium."
Suiza Foods is a Dallas-based company with leading positions in the dairy,
consumer goods plastic packaging and packaged ice industries. Its principal
holdings are in fluid dairy processing, refrigerated, shelf-stable and frozen
food products, packaged ice and consumer goods plastic packaging.
Statements in this press release other than statements of historical fact may
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements, as
well as Suiza's future financial condition and results, are subject to inherent
risks and uncertainties, and actual results may differ materially from the
results discussed in these forward-looking statements. Additional information
concerning these and other risk factors are contained in Suiza's latest Annual
Report on Form 10-K and in each of Suiza's other recent filings with Securities
and Exchange Commission (SEC), copies of which are available from the SEC and
can be obtained from Suiza upon request.
----------------------------------
Contact:
Suiza Foods Corporation, Dallas
J. Michael Lewis, (214) 528-9922
or
Morgen-Walke Associates, New York
June Filingeri, John Blackwell
Media contact: Miriam Adler, Leslie Feldman
(212) 850-5600
Page 1
