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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
-----------------------
AMENDING FORM 8-A DATED MAY 22, 1986
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
SYSCO Corporation
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 74-1648137
- ---------------------------------------- -------------------
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1390 Enclave Parkway, Houston, Texas 77077-2099
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class registered each class is registered
- ------------------------------ ------------------------------
Preferred Stock Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
- --------------------------------------------------------------------------------
(Title of Class)
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This Form 8-A/A amends and supplements the Form 8-A (the "Form 8-A") filed by
SYSCO Corporation (the "Company") on May 22, 1986 with respect to Preferred
Stock Purchase Rights.
Item 1. Description of Securities to be Registered.
Item 1 of the Form 8-A is amended by substituting the following:
On May 14, 1986, the Board of Directors of SYSCO Corporation (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Common Stock, par value $1 per share, of the Company (the "Common
Shares"), payable to the holders of record of the Common Shares on May 30,
1986.
On May 8, 1996, the Board of Directors of the Company adopted
amendments to the Rights Agreement (the "Prior Rights Agreement") dated as of
May 19, 1986 between the Company and Boston EquiServe, L.P. (the "Rights
Agent") (as successor rights agent to First City National Bank of Houston)
pursuant to which the Preferred Stock Purchase Rights registered under this
Form 8-A were issued. The amendments are set forth in an Amended and Restated
Rights Agreement (the "Rights Agreement") dated as of May 20, 1996 between the
Company and the Rights Agent, which supersedes the Prior Rights Agreement. A
copy of the Rights Agreement is attached as an exhibit hereto and is hereby
incorporated by reference. The following summary of the Rights is qualified in
its entirety by reference to the Rights Agreement.
As of the date of this Form 8-A/A, there is associated with each
outstanding Common Share one Right which, except as set forth below, when
exercisable, entitles the registered holder to purchase from the Company one
two- thousandth of a share of a series of preferred stock, designated as Series
A Junior Participating Preferred Stock, par value $1 per share (the "Preferred
Stock"), at a price of $175 per one two-thousandth of a share (the "Purchase
Price"), subject to adjustment. The terms of the Preferred Stock are
summarized below and are set forth in an Amended and Restated Certificate of
Designation attached as Exhibit A to the Rights Agreement.
Until the earliest to occur of (i) a public announcement that, without
the prior consent of the Board of Directors of the Company, a person or group,
including any affiliates or associates of such person or group (an "Acquiring
Person"), acquired, or obtained the right to acquire, beneficial ownership of
10% or more of the outstanding Common Shares (the "Stock Acquisition Date") or
(ii) ten business days (or such later date as the Board may determine)
following the commencement or announcement of an intention (which is not
subsequently withdrawn) to make a tender offer or exchange offer which would
result in any person or group (and related persons) having beneficial ownership
of 10% or more of the outstanding Common Shares without the prior consent
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of the Board of Directors or (iii) twenty business days prior to the date on
which a Transaction (as such term is hereinafter defined) is reasonably
expected to become effective or be consummated (the earliest of such dates
being called the "Distribution Date"), the Rights will be attached to all
Common Share certificates and will be evidenced, with respect to any of the
Common Share certificates outstanding as of May 20, 1996, by the Common Share
certificates. 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 May 20, 1996 upon transfer, replacement
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
Common Share certificates outstanding as of May 20, 1996, even without such a
notation, 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
("Rights Certificates") will be mailed to holders of record of the Common
Shares as of the close of business on the Distribution Date, and the separate
Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 31, 2006, unless earlier redeemed by the Company as
described below.
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock). Each share of
Preferred Stock will have a preferential quarterly dividend in an amount equal
to the greater of $20.00 and 2,000 times the dividend declared on each Common
Share. In the event of liquidation, the holders of Preferred Stock will
receive a preferred liquidation payment per share equal to the greater of
$350,000 and 2,000 times the payment made per Common Share. Each share of
Preferred Stock will have 2,000 votes, voting together with the Common Shares.
In the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each share of Preferred Stock will be entitled to receive
2,000 times the amount and type of consideration received per Common Share.
The rights of the Preferred Stock as to dividends, liquidation and voting, and
in the event of mergers and consolidations, are protected by customary
anti-dilution provisions. Fractional shares of Preferred Stock in integral
multiples of one two-thousandth of a share of Preferred Stock will be issuable;
however, the Company may elect to distribute depositary receipts in lieu of
such fractional shares. In lieu of fractional shares other than fractions that
are multiples of one two-thousandth of a share, an adjustment in cash will be
made based on the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
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In the event that any person becomes an Acquiring Person, each holder
of a Right generally will thereafter have the right for a 60 day period after
the later of the date of such event and the effectiveness of an appropriate
registration statement (or such other longer period set by the Board of
Directors) to receive upon exercise of the Right that number of units of one
two-thousandths of a share of Preferred Stock (or, under certain circumstances,
Common Shares or other securities) having an average market value during a
specified time period (immediately prior to the occurrence of a Person becoming
an Acquiring Person) of two times the exercise price of the Right (such right
being called the "Subscription Right"). Notwithstanding the foregoing,
following the occurrence of a Person becoming an Acquiring Person, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by the Acquiring Person or any affiliate or associate
thereof will be null and void.
In the event that, at any time following the Stock Acquisition Date
or, if a Transaction is proposed, the Distribution Date, the Company is
acquired in a merger or other business combination transaction or 50% or more
of the Company's assets or earning power are sold (in one transaction or a
series of transactions), proper provision shall be made so that each holder of
a Right (except a Right voided as set forth above) shall thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
(or, in the event there is more than one acquiring company, the acquiring
company receiving the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have a market value of
two times the exercise price of the Right (such right being called the "Merger
Right"). The holder of a Right will continue to have the Merger Right whether
or not such holder exercises the Subscription Right.
The Purchase Price payable, the number of Rights and the number of
shares of Preferred Stock, 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 Preferred Stock, (ii) upon
the grant to holders of the Preferred Stock of certain rights or warrants to
subscribe for Preferred Stock, certain convertible securities or securities
having the same or more favorable rights, privileges and preferences as the
Preferred Stock at less than the current market price of the Preferred Stock or
(iii) upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends out of
earnings or retained earnings and dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to above.)
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such
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Purchase Price. No fractional shares will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading date prior to the date of exercise.
The number of outstanding Rights associated with each share of Common
Stock and the voting and economic rights of each one two-thousandth of a share
of Preferred Stock issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
At any time prior to the earliest to occur of (i) the close of
business on the Stock Acquisition Date or (ii) the expiration of the Rights,
the Company may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"), which redemption shall be effective upon
the action of the Board of Directors. Additionally, following the Stock
Acquisition Date and the expiration of the period during which the Subscription
Right is exercisable, the Company may redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price, provided that such redemption
is in connection with a merger or other business combination transaction or
series of transactions involving the Company in which all holders of Common
Shares are treated alike but not involving an Acquiring Person (or any person
who was an Acquiring Person) or its affiliates or associates. Upon the
effective date of the 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.
In the event that a majority of the Board of Directors of the Company
in office following a meeting of stockholders or stockholder action by written
consent are not nominated by the Board of Directors serving immediately prior
to such meeting or action, then for 365 days following such meeting or action
the Rights may not be redeemed or amended if such redemption or amendment is
reasonably likely to facilitate a combination or sale of assets or earning
power (a "Transaction") with a person who (A) either (i) is or will become an
Acquiring Person or (ii) is a party involved in a merger or consolidation with,
or sale of assets by, the Company or affiliate or associate thereof if the
Transaction were to be consummated and (B) who has directly or indirectly
proposed or nominated a member of the Board who is in office at the time the
Transaction is being considered (a "Transaction Person"). The Rights may not
be redeemed thereafter if during such 365 day period the Company enters into
any agreement reasonably likely to facilitate a Transaction with a Transaction
Person and the redemption is reasonably likely to facilitate a Transaction with
a Transaction Person.
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Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Except as set forth above, the terms of the Rights may be amended by
the Board of Directors of the Company, (i) prior to the Distribution Date in
any manner, and (ii) on or after the Distribution Date to cure any ambiguity,
to correct or supplement any provision of the Rights Agreement which may be
defective or inconsistent with any other provisions, or in any manner not
adversely affecting the interests of the holders of the Rights (including the
interests of any Acquiring Person), or, subject to certain limitations, to
shorten or lengthen any time period under the Rights Agreement.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the Rights being redeemed or a substantial
number of Rights being acquired. However, the Rights generally should not
interfere with any merger or other business combination approved by the Board
of Directors.
The form of Amended and Restated Rights Agreement between the Company
and Boston EquiServe, L.P. specifying the terms of the Rights, Exhibit A
thereto -- the form of Amended and Restated Certificate of Designation
setting forth the terms of the Preferred Stock -- Exhibit B thereto -- the
Form of Rights Certificate -- and Exhibit C thereto -- the Summary of Rights
to Purchase Stock -- are attached hereto as Exhibit 1 and are incorporated
herein by reference. The foregoing description of the Rights is qualified by
reference to the Amended and Restated Rights Agreement.
Item 2. Exhibits.
1 Form of Amended and Restated Rights Agreement (the "Rights
Agreement") dated as of May 20, 1996 between SYSCO Corporation
and Boston EquiServe, L.P. which includes, as Exhibit A
thereto, the form of Amended and Restated Certificate of
Designation specifying the terms of the Preferred Stock and,
as Exhibit B thereto, the form of Rights Certificate.
Pursuant to the Rights Agreement, Rights Certificates will not
be mailed until a person acquires beneficial ownership of 10%
or more of the Common Shares or 10 days (or such later date as
the Board of Directors of the Company may determine) after a
person commences or announces its intention to commence an
offer if, upon consummation thereof, such person would become
an Acquiring Person (as defined in the Rights Agreement) or
prior to certain transactions involving the Company.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
SYSCO CORPORATION
By /s/ Bill M. Lindig
-------------------------------
Bill M. Lindig
President and Chief
Executive Officer
Date: May 29, 1996
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
1 Form of Amended and Restated Rights Agreement (the "Rights Agreement")
dated as of May 20, 1996 between SYSCO Corporation and Boston EquiServe,
L.P. which includes, as Exhibit A thereto, the form of Amended and
Restated Certificate of Designation specifying the terms of the Preferred
Stock, and, as Exhibit B thereto, the form of Rights Certificate.
Pursuant to the Rights Agreement, Rights Certificates will not be mailed
until a person acquires beneficial ownership of 10% or more of the Common
Shares or 10 days (or such later date as the Board of Directors of the
Company may determine) a person commences or announces its intention to
commence an offer if, upon consummation thereof, such person would become
an Acquiring Person (as defined in the Rights Agreement) or prior to
certain transactions involving the Company.
</TABLE>
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EXHIBIT 1
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SYSCO CORPORATION
and
BOSTON EQUISERVE, L.P.
Rights Agent
-------------------------------------
Amended and Restated Rights Agreement
Dated as of May 20, 1996
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Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3. Issue of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . 9
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates . . . . . . . . . . . . . . 10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . 11
Section 8. Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . 15
Section 9. Reservation and Availability of Preferred Stock . . . . . . . . . . . . . . . 15
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights . 18
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . 31
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . 31
Section 14. Additional Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 15. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . 35
Section 16. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 18. Rights Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . 40
Section 19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 20. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . 41
Section 21. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 22. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 23. Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . 47
Section 24. Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 28. Determination and Actions by the Board of Directors, etc. . . . . . . . . . . 53
Section 29. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
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<TABLE>
<S> <C>
Section 31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Exhibit A -- Form of Amended and Restated Certificate of Designation
of Series A Junior Participating Preferred Stock
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
</TABLE>
ii
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AMENDED AND RESTATED RIGHTS AGREEMENT
This Agreement, dated as of May 20, 1996, between SYSCO Corporation, a
Delaware corporation (the "Company"), and Boston EquiServe, L.P. (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, on May 14, 1986, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each outstanding share of Common Stock, par value $1 per share, of
the Company (the "Common Stock") outstanding on May 30, 1986, (the "Record
Date"), and contemplated the issuance of one Right (a "Pre-Amendment Right")
for each share of Common Stock of the Company issued between the Record Date
and the earliest of the Distribution Date and, the Expiration Date (as such
terms are hereinafter defined), each Pre-Amendment Right representing the right
to purchase one one-hundredth of a share of Series A Junior Participating
Preferred Stock of the Company having the rights, powers and preferences set
forth in the form of Certificate of Designation attached as Exhibit A to the
Agreement dated as of May 19, 1986 between the Company and the Rights Agent (as
successor rights agent to the First City National Bank of Houston) (the "Prior
Rights Agreement"), upon the terms and subject to the conditions set forth
therein;
WHEREAS, as a result of the payment of stock dividends consisting of
shares of Common Stock after the Record Date of shares of Common Stock and
prior to the date hereof, there was associated with each outstanding share of
Common Stock one-quarter of one Pre-Amendment Right;
WHEREAS, the Board of Directors of the Company has determined that it
is advisable and in the best interests of the Company and its stockholders to
amend and
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restate in its entirety the Prior Rights Agreement as set forth herein and the
Pre-Amendment Rights shall henceforth be governed by the terms and subject to
the conditions set forth herein; and
WHEREAS, this Agreement provides, among other things, that each
one-quarter of a Pre-Amendment Right shall hereafter be referred to as one
Right (a "Right") and each Right shall represent the right to purchase one two-
thousandth of a share of Series A Junior Participating Preferred Stock of the
Company having the rights, powers and preferences set forth in the form of
Amended and Restated Certificate of Designation attached hereto as Exhibit A,
upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, without the prior approval of the Board of Directors
of the Company, shall be the Beneficial Owner of 10% or more of the shares of
Common Stock then outstanding or who was such a Beneficial Owner at any time
after the date hereof, whether or not such Person continues to be the
Beneficial Owner of 10% or more of the outstanding shares of Common Stock, but
shall not include the Company, any subsidiary of the Company (as such term is
hereinafter defined), any employee benefit plan of the Company or any of its
subsidiaries or any entity holding shares of Common Stock organized, appointed
or established by the Company or any of its subsidiaries for or pursuant to the
terms of any such plan or any trustee or administrator of any such plan.
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(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right or obligation to
acquire (whether such right or obligation is exercisable or
effective immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding
(whether or not in writing) or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote
pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person
shall be not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy given in response to
a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations of
the Exchange Act and (2) is not also then reportable by such
person on
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Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (B) of subparagraph (ii) of this
paragraph (c)) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the State of Texas
are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00
P.M., Houston time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Houston time, on the next succeeding
Business Day.
(f) "Common Stock" shall mean the Common Stock, par value
$1 per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person or,
if such Person is a subsidiary of another Person, the Person which ultimately
controls such first-mentioned Person and which has issued and outstanding such
capital stock, equity securities or equity interests.
(g) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(h) "Preferred Stock" shall mean the Series A Junior
Participating Preferred Stock, par value $1 per share, of the Company.
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(i) "Rights Agreement" shall mean this Agreement,
including as it may hereafter be amended.
(j) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(k) A "subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting power of the
voting equity securities or voting interests is owned, directly or indirectly,
by such Person, or which is otherwise controlled by such Person.
(l) "Transaction" shall mean any merger, consolidation or
sale of assets described in Section 13(a) hereof or any acquisition of shares
of Common Stock of the Company which would result in a Person becoming a
Transaction Person.
(m) "Transaction Person" with respect to a Transaction
shall mean (x) any Person who (i) is or will become an Acquiring Person or a
Principal Party (as such term is defined in Section 13(b) hereof) if the
Transaction were to be consummated and (ii) directly or indirectly proposed or
nominated a director of the Company which director is in office at the time of
consideration of the Transaction, or (y) an Affiliate or Associate of such a
Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable. In the event the Company appoints one
or more Co-Rights Agents, the respective duties of the Rights Agents and any
Co-Rights Agents shall be as the Company shall determine.
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Section 3. Issue of Rights Certificates
(a) Until the earliest of (i) the Stock Acquisition Date,
(ii) the tenth Business Day after the date of the commencement of, or first
public announcement of the intent of any Person (other than the Company, any
subsidiary of the Company, or any employee benefit plan of the Company or any
of its subsidiaries or any trustee or administrator of any such plan in its
capacity as such) to commence (which intention to commence remains in effect
for five business days after such announcement), a tender or exchange offer
which would result in such Person becoming an Acquiring Person, or (iii) twenty
business days prior to the date on which a Transaction is reasonably expected
to become effective or be consummated (the earliest of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
(and the right to receive certificates therefor) will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company); provided, however, that if a tender or
exchange offer is terminated prior to the occurrence of the Distribution Date,
then no Distribution Date shall occur as a result of that tender or exchange
offer. As soon as practicable after the Distribution Date, the Rights Agent
will send by first-class, insured, postage prepaid mail, to each record holder
of the Common Stock as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, a certificate
for Rights, in substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held.
As of and after the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
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(b) With respect to certificates for the Common Stock
outstanding as of the date of this Agreement, until the Distribution Date (or
earlier redemption, expiration or termination of the Rights), the Rights will
be evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the Distribution Date (or earlier redemption,
expiration or termination of the Rights), the surrender for transfer of any of
the certificates for the Common Stock outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. Upon the request of the holder of any shares
of Common Stock or, after the Distribution Date, the holder of any Rights, the
Company shall, at its expense, provide a copy of the Summary of Rights in the
form attached hereto as Exhibit C.
(c) Certificates for the Common Stock issued (or which
become outstanding) after the date of this Agreement (or as soon thereafter as
is reasonably practicable), but prior to the earlier of the Distribution Date
or the Expiration Date (as such term is hereinafter defined), shall be deemed
also to be certificates for Rights, and shall have impressed, printed, stamped,
written or otherwise affixed onto them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in an Amended and Restated Rights
Agreement between SYSCO Corporation and Boston EquiServe, L.P. (the
"Rights Agent") dated as of May 20, 1996 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal offices of Sysco Corporation.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may expire, or may be evidenced by
separate certificates and will no longer be evidenced by this
certificate. SYSCO Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without charge within
fifteen days after receipt of a written request therefor. Under
certain circumstances, Rights issued to Acquiring Persons (as
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<PAGE> 11
defined in the Rights Agreement) or certain related persons and any
subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. If the Company purchases or otherwise acquires shares of Common
Stock prior to the Distribution Date, any Rights associated with such Common
Stock shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Right associated with the shares of Common Stock which
are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof) shall
each be substantially in the form set forth in Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 23 hereof, the Rights Certificates,
whenever distributed, on their face shall entitle the holders thereof to
purchase such number of one two-thousandths of a share of Preferred Stock as
shall be set forth therein at the price per share set forth therein (the
"Purchase Price"), but the number of such shares and the Purchase Price shall
be subject to adjustment as provided herein.
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<PAGE> 12
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 23 hereof that represents Rights beneficially owned by an
Acquiring Person or any Associate or Affiliate thereof and any Rights
Certificate issued at any time upon the transfer of any Rights to such an
Acquiring Person or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate, and any Rights Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain the following legend:
The Rights represented by this Rights Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby are null and void.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights
Certificate.
Section 5. Countersignature and Registration. The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, any Vice Chairman of the Board, any President or any Vice President,
either manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect
as though the person who signed such Rights
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<PAGE> 13
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at one of its offices, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates and the
certificate number and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
Subject to the provisions of Section 4(b), Section 7(e) and Section 15 hereof,
at any time after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date, any Rights Certificate
or Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of one two-thousandths of a share of Preferred Stock as
the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate or
Rights Certificates to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be
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<PAGE> 14
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Rights Certificate
if mutilated, the Company will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) The registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon presentation of
the Rights Certificate, with the appropriate form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the Purchase Price for
each one two-thousandth of a share of Preferred Stock (or such other number of
shares or other securities) as to which the Rights are exercised, at or prior
to the earlier of (i) the close of business on May 31, 2006 (the "Final
Expiration Date"), or (ii) the time at which the Rights are redeemed as
provided in Section 24 hereof (such earlier time being herein referred to as
the "Expiration Date"). Notwithstanding any other provision of this Agreement,
any Person who prior to the Distribution Date becomes a record holder of shares
of Common Stock may exercise all of the rights of a registered holder of a
Rights Certificate with respect to the Rights associated with such shares of
Common Stock in accordance with and subject to the provisions of this
Agreement,
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<PAGE> 15
including the provisions of Sections 4(b), 6 and 7(e) hereof, as of the date
such Person becomes a record holder of shares of Common Stock.
(b) Subject to the terms and conditions set forth herein,
when exercisable, each Right shall represent the right to purchase one
two-thousandth of a share of Preferred Stock. The Purchase Price for each one
two- thousandth of a share of Preferred Stock pursuant to the exercise of a
Right shall initially be $175, shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall be payable in lawful money
of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the appropriate form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares (or other
securities or property) to be purchased and an amount equal to any applicable
transfer tax (as determined by the Rights Agent) in cash, or by certified check
or bank draft payable to the order of the Company, the Rights Agent shall,
subject to Section 21(k), thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent) certificates for the number of shares of
Preferred Stock to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company, in
its sole discretion, shall have elected to deposit the shares of Preferred
Stock issuable upon exercise of the Rights hereunder into a depositary,
requisition from the depositary agent depositary receipts representing such
number of one two-thousandth of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash, if
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<PAGE> 16
any, to be paid in lieu of issuance of fractional shares in accordance with
Section 15, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt promptly
deliver such cash to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, and/or distribute other
property pursuant to Section 11(a), the Company will make all arrangements
necessary so that such other securities and/or property are available for
distribution by the Rights Agent, if and when appropriate. In addition, in the
case of an exercise of the Rights by a holder pursuant to Section 11(a)(ii),
the Rights Agent shall return such Rights Certificate to the registered holder
thereof after imprinting, stamping or otherwise indicating thereon that the
rights represented by such Rights Certificate no longer include the rights
provided by Section 11(a)(ii) of the Rights Agreement and if less than all the
Rights represented by such Rights Certificate were so exercised, the Rights
Agent shall indicate on the Rights Certificate the number of Rights represented
thereby which continue to include the rights provided by Section 11(a)(ii).
(d) In case the registered holder of any Rights
Certificate shall exercise (except pursuant to Section 11(a)(ii)) less than all
the Rights evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Rights Certificate or to
his duly authorized assigns, subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the time an Acquiring Person first becomes such, any
Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person,
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<PAGE> 17
(ii) a transferee of an Acquiring Person (or of any Affiliate or Associate
thereof) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any Affiliate or Associate
thereof) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has a continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Corporation has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The
Corporation shall use all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of
its failure to make any determinations with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless the certificate
contained in the appropriate form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise shall have
been completed and signed by the registered holder thereof and the Company
shall have been provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
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Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or any
of its agents, be delivered to the Rights Agent for such purpose and
cancellation or, if surrendered to the Rights Agent for such purpose, shall be
cancelled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock. The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock, or any
authorized and issued shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the occurrence of an
event specified in Section 11, shall so reserve and keep available a sufficient
number of shares of Preferred Stock (and/or other securities) which may be
required to permit the exercise in full of the Rights pursuant to this
Agreement.
So long as the shares of Preferred Stock (and, after the occurrence of
an event specified in Section 11, any other securities) issuable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares (or other securities) reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
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<PAGE> 19
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Preferred Stock, Common Stock
and/or other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares or other securities (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares or securities.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates or of
any certificates for shares of Preferred Stock, Common Stock and/or other
securities upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a person other than, or in
respect of the issuance or delivery of the shares of Preferred Stock, Common
Stock and/or other securities in a name other than that of, the registered
holder of the Rights Certificates evidencing Rights surrendered for exercise or
to issue or deliver any certificates for shares of Preferred Stock, Common
Stock and/or other securities in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
The Company shall use its best efforts to (i) file, as soon as
practicable following the Distribution Date, a registration statement under the
Securities Act of 1933 (the "Act"), with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the date of
the
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expiration of the rights provided by Section 11(a)(ii). The Company will also
take such action as may be appropriate under the blue sky laws of the various
states.
Section 10. Preferred Stock Record Date. Each person in whose
name any certificate for shares of Preferred Stock (or Common Stock and/or
other securities) is issued upon the exercise of Rights shall for all purposes
be deemed to have become the holder of record of the shares of Preferred Stock
(or Common Stock and/or other securities) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly presented and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such presentation and payment is a date upon which the Preferred Stock
(or Common Stock and/or other securities) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock (or Common Stock and/or other securities)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at
any time after the date of this Agreement (A) declare a dividend on
the Preferred Stock
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<PAGE> 21
payable in shares or fractional units of shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this
Section 11(a), and Section 7(e), 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 of
units of one two-thousandths of a share of Preferred Stock and the
number and kind of shares of capital stock issuable on such date upon
exercise of a Right, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number of units of one two-thousandths of a
share of Preferred Stock and the number and kind of shares of capital
stock and other securities which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon exercise of one
Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both Section 11(a)(i)
and Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to any
adjustment required pursuant to Section 11(a)(ii).
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<PAGE> 22
(ii) In the event any Person, alone or together
with its Affiliates and Associates, shall become an Acquiring Person,
then proper provision shall be made so that each holder of a Right,
except as provided in Section 7(e) hereof, shall, for a period of 60
days (or such other longer period as may be established by action of a
majority of the Board of Directors) after the later of the occurrence
of any such event and the effective date of an appropriate
registration statement pursuant to Section 9, have a right to receive,
upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of one two-thousandths
of shares of the Preferred Stock as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of
one two-thousandths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of such event
and dividing that product by (y) 50% of the current market price per
one two-thousandths of a share of the Preferred Stock (determined
pursuant to Section 11(d)) on the date of such first occurrence (such
number of one two-thousandths of a share being referred to as the
"number of Adjustment Shares").
(iii) In the event that there shall not be
sufficient authorized but unissued shares of Preferred Stock to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), then, in the event the Rights become so
exercisable, notwithstanding any other provision of this Agreement, to
the extent necessary and permitted by applicable law and any
agreements in effect on the date hereof to which it is a party, each
Right shall thereafter represent the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement,
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<PAGE> 23
a number of shares of Common Stock equal to the number of Adjustment
Shares or a number of shares, or units of shares, of preferred stock
equal to the number of Adjustment Shares where the Board of Directors
of the Company shall have deemed such shares or units to have at least
the same or more favorable rights, privileges and preferences as the
Preferred Stock (an "equivalent preferred stock") or a combination of
Preferred Stock and/or Common Stock and/or equivalent preferred stock
having the requisite value as determined by the the Board of
Directors; provided, however, if there are unavailable sufficient
shares of Preferred Stock and/or Common Stock and/or equivalent
preferred stock, then the Company shall take all such action as may be
necessary to authorize additional shares of Preferred Stock and/or
equivalent preferred stock and/or shares of Common Stock for issuance
upon exercise of the Rights, including the calling of or meeting of
shareholders; and provided, further, that if the Company is unable to
cause sufficient shares of Preferred Stock and/or equivalent preferred
stock and/or shares of Common Stock to be available for issuance upon
exercise in full of the Rights, then each Right shall thereafter
represent the right to receive the Adjusted Number of Preferred Shares
upon exercise at the Adjusted Purchase Price (as such terms are
hereinafter defined.) As used herein, the term Adjusted Number of
Preferred Shares shall be equal to that number of one two-thousandths
of a share of Preferred Stock (and/or shares or units of equivalent
preferred stock and/or shares of Common Stock) equal to the product of
(x) the number of Adjustment Shares and (y) a fraction, the numerator
of which is the number of one two-thousandths of a share of Preferred
Stock (and/or shares or units of equivalent preferred stock and/or
shares of Common Stock) available for issuance upon exercise of the
Rights
20
<PAGE> 24
and the denominator of which is the aggregate number of Adjustment
Shares otherwise issuable upon exercise in full of all Rights
(assuming there were sufficient shares of Preferred Stock available)
(such fraction being referred to as the "Proration Factor"). The
Adjusted Purchase Price shall mean the product of the Purchase Price
and the Proration Factor. The Board of Directors may, but shall not
be required to, establish procedures to allocate the right to receive
Preferred Stock, equivalent preferred stock and shares of Common Stock
upon exercise of the Rights among holders of Rights.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or equivalent preferred
stock or securities convertible into Preferred Stock or equivalent preferred
stock) at a price per share of Preferred Stock or per share of equivalent
preferred stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock) less than the
current market price (as defined in Section 11(d) per share of Preferred Stock
on such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent preferred stock to
be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and
the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of
Preferred Stock
21
<PAGE> 25
and/or equivalent preferred stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration to be
paid upon exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such consideration shall
be determined reasonably and with good faith to the holders of Rights by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent.
Shares of Preferred Stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) If the Company shall fix a record date for the making
of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable in Preferred
Stock, but including any dividend payable in stock other than Preferred Stock)
or subscription rights or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current
market price (as defined in Section 11(d)) per share of Preferred Stock on such
record date, less the fair market value (as determined reasonably and with good
faith to the holders of Rights by the Board of
22
<PAGE> 26
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants distributable in respect of one
share of Preferred Stock and the denominator of which shall be current market
price per share of the Preferred Stock; provided, however, that in no event
shall the consideration to be paid upon exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price which
would be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than in Section 11(a)(iii), the "current market price" per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of the
Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible into
shares of such Common Stock or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the "current market price" shall be properly adjusted to
take into account ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as
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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 or not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the- counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("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 of the Company. 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 reasonably and with good faith by the
Board of Directors of the Company shall be used and shall be binding on the
Rights Agent. The term, "Trading Day" shall mean a day on which the principal
national securities exchange 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. If the Common Stock is not publicly held
or not so listed or traded, "current market price" per share shall mean the
fair value per share determined reasonably and with good faith to the holders
of Rights by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current market price" per share (or one two- thousandths of a share) of
Preferred Stock or
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<PAGE> 28
any other security shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per share (or one
two-thousandths of a share) of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or listed
or traded in a manner described in clause (i) of this Section 11(d), the
"current market price" per share of Preferred Stock shall be conclusively
deemed to be an amount equal to 2,000 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of the Common Stock and the
"current market price" per one two-thousandths of a share of Preferred Stock
shall be equal to the current market price per share of the Common Stock (as
appropriately adjusted). If neither the Common Stock nor the Preferred Stock
is publicly held or so listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or one ten-millionth of a share of Preferred Stock (or any other
security), as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the
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<PAGE> 29
earlier of (i) three years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10, 13 and 15 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
shares of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one two-thousandths of a share of Preferred Stock (calculated to the nearest
one- millionth) obtained by (i) multiplying (x) the number of one
two-thousandths of a share of Preferred Stock covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
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(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one two-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Rights Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 15 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein (and may bear, at the option of the
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<PAGE> 31
Company, the adjusted Purchase Price) and shall be registered in the names of
the holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one two- thousandth of a share of Preferred
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per share and the number of shares which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated or par value, if
any, of the shares of Preferred Stock, Common Stock or other securities
issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Preferred Stock, Common Stock or other securities at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such record
date the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything to the contrary in this Section 11
notwithstanding, the Company, by action of a majority of the Board of
Directors, shall be entitled to make
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<PAGE> 32
such reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the current market price, issuance wholly for cash
of shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, stock dividends or issuance
of rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other Person
(other than a subsidiary of the Company in a transaction which does not violate
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
subsidiary of the Company in a transaction which does not violate Section 11(o)
hereof, 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 and/or any of its subsidiaries in one or more
transactions each of which does not violate Section 11(o) hereof), if (x) at
the time of or immediately after such consolidation, merger, sale or transfer
there are any charter or by-law provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect or other actions
taken, which would materially 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 who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates
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<PAGE> 33
and Associates. The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such other Person
shall have executed and delivered to the Rights Agent a certificate certifying
compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any subsidiary to take) any action the purpose of which
is to, or if at the time such action is taken it is reasonably foreseeable that
the effect of such action is to, materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement and prior to the Distribution Date (i) declare or pay a
dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, (iii) combine or
consolidate the outstanding Common Stock into a smaller number of shares, or
(iv) issue any shares of its capital stock in a reclassification of the
outstanding Common Stock, then in any such case, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall 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 shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event. The adjustments provided for in this
Section 11(p) shall be made
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<PAGE> 34
successively whenever such a dividend is declared or paid or such a
subdivision, combination, consolidation or reclassification is effected.
(q) The exercise of Rights under Section 11(a)(ii) shall
only result in the loss of rights under Section 11(a)(ii) to the extent so
exercised and shall not otherwise affect the rights represented by the Rights
under this Rights Agreement, including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Rights Certificate in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall not be
deemed to have knowledge of such adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, on or following the Stock
Acquisition Date or, if a Transaction is proposed, the Distribution Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person, (y) any Person shall consolidate with the Company,
or merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all
or part of the shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property or
all holders of shares of Common Stock are not treated alike or following the
31
<PAGE> 35
merger or consolidation the holders of Common Stock immediately prior to the
transaction do not hold in the same proportion all of the voting power of the
corporation surviving the transaction, or (z) the Company shall sell, mortgage
or otherwise transfer (or one or more of its subsidiaries shall sell, mortgage
or otherwise transfer), in one or more transactions, assets or 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, then, and in each such
case, proper provision shall be made so that (i) following the Distribution
Date, each holder of a Right, shall have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of shares of freely tradeable Common Stock
of the Principal Party (as hereinafter defined), free and clear of liens,
rights of call or first refusal, encumbrances or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of one two-thousandths of a share of Preferred Stock for
which a Right is then exercisable and dividing that product by (2) 50% of the
current market price per share of the Common Stock of such Principal Party
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of
a sufficient number of shares of its Common Stock in accordance with Section 9
hereof) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be,
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<PAGE> 36
in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
(x) or (y) of the first sentence of this Section 13, the Person that
is the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to the
merger or consolidation (including, if applicable, the Company if it
is the surviving corporation); and
(ii) in the case of any transaction described in
(z) of the first sentence in this Section 13, 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
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect subsidiary or Affiliate of another Person,
"Principal Party" shall refer to such other Person; (2) in case such Person is
a subsidiary, directly or indirectly, or Affiliate of more than one Person, the
Common Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person,
the rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal Parties
in each such chain shall bear the obligations set forth in this Section 13 in
the
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<PAGE> 37
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
each Principal Party and each other Person who may become a Principal Party as
a result of such consolidation, merger, sale or transfer shall have a
sufficient number of shares of its authorized Common Stock which have not been
issued or reserved for issuance in order to permit the exercise in full of the
Rights in accordance with this Section 13 and shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further providing that, as
soon as practicable after the date of any consolidation, merger, sale or
transfer of assets mentioned in paragraph (a) of this Section 13, the Principal
Party at its own expense will
(i) prepare and file a registration statement
under the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, will
use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and will use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise of the Rights
under the blue sky laws of such jurisdictions as may be necessary or
appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all material respects with the requirements
for registration on Form 10 under the Exchange Act.
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<PAGE> 38
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. The rights under this Section
13 shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) and shall survive any exercise thereunder.
(d) The Company shall not consummate any such
consolidation, merger, sale or transfer which shall be a Transaction unless
prior thereto certificates evidencing the Rights have been distributed in
accordance with Section 3(a) to holders of shares of Common Stock twenty
business days prior to the date on which the Transaction becomes effective or
is consummated.
Section 14. Additional Covenant. Notwithstanding any other
provision of this Agreement, no adjustment to the Purchase Price, the number of
shares (or fractions of a share) of Preferred Stock, Common Stock or other
securities for which a Right is exercisable or the number of Rights outstanding
or any similar adjustment shall be made or be effective if such adjustment
would have the effect of reducing or limiting the benefits the holders of the
Rights would have had absent such adjustment, including, without limitation,
the benefits under Section 11(a)(ii) and Section 13, unless the terms of this
Agreement are amended so as to preserve such benefits.
Section 15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights, except prior to the Distribution Date as provided in Section 11(n),
or to distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 15(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
35
<PAGE> 39
have been otherwise issuable. The closing price of the Rights for any day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading, or
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined reasonably and with good faith to the holders
of Rights by the Board of Directors of the Company shall be used and shall be
binding on the Rights Agent.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral multiples
of one two-thousandth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
two-thousandth of a share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one two-thousandth of a
share of Preferred Stock, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
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<PAGE> 40
amount in cash equal to the same fraction of the current market value of one
two-thousandth of a share of Preferred Stock. For purposes of this Section
15(b), the current market value of one two-thousandth of a share of Preferred
Stock shall be one two-thousandth of the closing price of a share of Preferred
Stock (as determined pursuant to of Section 11(d)(ii) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions
or events specified in Section 11 giving rise to the right to receive one
two-thousandth of a share of Preferred Stock, Common Stock, or other securities
upon the exercise of a Right, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common Stock. In
lieu of fractional units of one two-thousandth of a share of Preferred Stock or
fractional shares of any such other securities, the Company may pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a unit or share of such securities, as the case may be. For
purposes of this Section 15(c), the current market value of any such unit or
share shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
Section 16. Rights of Action. All rights of action in respect of
this Agreement (other than rights of action given to the Rights Agent under
Section 19 hereof) are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered
37
<PAGE> 41
holder of any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
Agreement. Holders of Rights shall be entitled to recover the reasonable costs
and expenses, including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement in which they successfully prosecute
their claims.
Section 17. Agreement of Rights Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) subject to Section 6 and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as
38
<PAGE> 42
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to the last sentence of Section 7(e) hereof, shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in 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 shall not have sought or otherwise cooperated in
obtaining such order, decree or ruling and must use its best efforts to have
any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 18. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
Preferred Stock, Common Stock or any other securities of the Company which may
at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in Section 25
hereof), or to receive
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<PAGE> 43
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions thereof.
Section 19. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, damage,
claim, or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses (including reasonable attorney's
fees and expenses) of defending against any claim of liability arising
therefrom, directly or indirectly. The indemnity provided for in this Section
19 shall survive the expiration of the Rights and the termination of this
Agreement.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be
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<PAGE> 44
a party, or any corporation succeeding to the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 21. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
41
<PAGE> 45
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person)
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, any Vice
Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates (except as to the fact that it has countersigned the
Rights Certificates) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any
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<PAGE> 46
Rights becoming null and void pursuant to Section 7(e) hereof or for any breach
by the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Sections 11 or 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual notice of any
such adjustment); nor shall it be responsible for any determination by the
Board of Directors of the Company of the current market value of the Rights or
Preferred Stock or Common Stock pursuant to the provisions of Section 15
hereof; nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of Preferred
Stock or Common Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock (or fractional
shares thereof) or Common Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the Chairman of
the Board, any Vice Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and is authorized to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance
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<PAGE> 47
with instructions of any such officer. 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 with respect to its duties or obligations under this Agreement and the
date on and/or after which such action taken or omitted in accordance with a
proposal included in any such application on or after the date specified
therein (which date shall not be less than three Business Days after the date
any such officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking or
omitting any such action, the Rights Agent has received written instructions
from the Company in response to such application 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 pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company or to
the holders of the Rights resulting from any such act, omission, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the
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<PAGE> 48
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first consulting
with the Company.
Section 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and, subsequent to the Distribution Date, to 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 and Preferred Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor
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<PAGE> 49
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state, in good standing, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Right Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and
Preferred Stock, and, if such appointment occurs after the Distribution Date,
mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 23. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Stock following the
Distribution Date and prior to the Expiration Date, the Company shall with
respect to shares of Common Stock so issued or sold pursuant to the exercise of
stock options or
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<PAGE> 50
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale; provided, however, that (i)
the Company shall not be obligated to issue any such Right Certificate if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificate shall be issued, and (ii)
no Right Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 24. Redemption and Termination.
(a) (i) The Board of Directors of the Company may, at
its option, at any time prior to 5:00 P.M., Houston time, on the earlier of (x)
the Stock Acquisition Date or (y) the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at the redemption price of $.01
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). In addition, the
Board of Directors of the Company may, at its option redeem all, but not less
than all, of the then outstanding Rights of the Redemption Price within 10 days
after any Person becomes an Acquiring Person if (A) the Acquiring Person
notifies the Board of Directors that such Person became an Acquiring Person
inadvertently and (B) during such 10 day period, and at the time of redemption,
the Acquiring Person is no longer the Beneficial Owner of 10% or more of the
then outstanding shares of Common Stock.
(ii) In addition, a majority of the Board of
Directors of the Company may, at its option, at any time following the Stock
Acquisition Date and the expiration of the period during which the rights of
holders of Rights pursuant to Section 11(a)(ii) hereof may be exercised as a
result of the occurrence of such Stock
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Acquisition Date, but prior to any event described in clause (x), (y), or (z)
of Section 13(a) hereof, redeem all but not less than all of the then
outstanding Rights at the Redemption Price in connection with any such event in
which all holders of shares of Common Stock are treated alike and not involving
an Acquiring Person or a Transaction Person or an Affiliate or Associate of an
Acquiring Person or any Person in which the Acquiring Person or an Affiliate or
Associate of an Acquiring Person has an interest, or any other Person acting
directly or indirectly on behalf of or in concert with any such Acquiring
Person, Associate or Affiliate (other than involvement by an Acquiring Person,
Affiliate, Associate or such other Person solely as a holder of shares of
Common Stock (of the Company) being treated like all other such holders) or (z)
following the occurrence of an event set forth in, and the expiration of any
period during which the holder of Rights may exercise the rights under, Section
11(a)(ii) if and for as long as the Acquiring Person is not thereafter the
Beneficial Owner of securities representing ten percent or more of the voting
power of all securities of the Company generally entitled to vote for the
election of directors of the Company.
(iii) Notwithstanding anything to the contrary in
this Agreement, including, without limitation, the provisions of Section
23(a)(i) and (ii), in the event that a majority of the Board of Directors of
the Company is comprised of (i) persons elected at a meeting or by written
consent of stockholders who were not nominated by the Board of Directors in
office immediately prior to such meeting or action by written consent, and/or
(ii) successors of such persons elected to the Board of Directors for the
purpose of either facilitating a Transaction with a Transaction Person or
circumventing directly or indirectly the provisions of this Section 23(a)(iii),
then (I) the Rights may not be redeemed for a period of 365 days following the
effectiveness of such election if such redemption is reasonably likely to have
the purpose or effect of facilitating a Transaction with a Transaction Person
and (II) the Rights may not be
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<PAGE> 52
redeemed following such 365-day period if (x) such redemption is reasonably
likely to have the purpose of facilitating a Transaction with a Transaction
Person and (y) during such 365-day period, the Company enters into any
agreement, arrangement or understanding with any Transaction Person which is
reasonably likely to have the purpose or effect of facilitating a Transaction
with any Transaction Person.
(b) Immediately upon the date for redemption set forth
(or determined in the manner specified) in a resolution of the Board of
Directors of the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten days after the action of the Board of Directors
ordering any such redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to the Rights Agent and to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
Section 25. Notice of Certain Events. In case the Company at any
time on or after the Distribution Date shall propose (a) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company) or
(b) to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options, or (c) to effect any
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<PAGE> 53
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or
(d) to effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its subsidiaries (taken as a whole)
to, any other Person, or (e) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, in accordance with Section 26 hereof, a notice
of such proposed action, which shall specify the record date for the purposes
of such stock dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least 20 days prior to the record
date for determining holders of the shares of Preferred Stock for purposes of
such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock whichever shall be the
earlier.
In case any of the events set forth in Section 11(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage
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prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Sysco Corporation
1390 Enclave Parkway
Houston, Texas 77077-2099
Subject to the provisions of Section 22, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Boston EquiServe, L.P.
P.O. Box 1865
Canton, Massachusetts 02102-1865
Attention: Carol Mulvey, Sr. Acct. Mgr.
Shareholder Services
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company may from time to time supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of certificates representing Common Stock and the Rights. From and after the
Distribution Date, the Company may from time to time supplement or amend this
Agreement without the approval of any holders of Right Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement the provisions hereunder in any
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manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment, provided that such supplement or
amendment does not adversely affect the rights or obligations of the Rights
Agent under Section 19 or Section 21 of this Agreement and such amendment or
supplement shall be effective regardless of whether or when executed by the
Rights Agent. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of shares
of Common Stock. Notwithstanding anything contained in this Rights Agreement
to the contrary, in the event that a majority of the Board of Directors of the
Company is comprised of (i) persons elected at a meeting or by written consent
of stockholders who were not nominated by the Board of Directors in office
immediately prior to such meeting or written consent, and/or (ii) successors of
such persons elected to the Board of Directors for the purpose of either
facilitating a Transaction with a Transaction Person or circumventing directly
or indirectly the provisions of this Section 27, then (I) for a period of 365
days following the effectiveness of such action, this Rights Agreement shall
not be amended or supplemented in any manner reasonably likely to have the
purpose or effect of facilitating a Transaction with a Transaction Person and
(II) no
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amendments or supplements may be made following such 365-day period if (x) such
amendment or supplement is reasonably likely to have the purpose of
facilitating a Transaction with a Transaction Person and (y) during such
365-day period, the Company enters into any agreement, arrangement or
understanding with any Transaction Person which is reasonably likely to have
the purpose or effect of facilitating a Transaction with any Transaction
Person.
Section 28. Determination and Actions by the Board of Directors,
etc.. The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend the Agreement and
whether any proposed amendment adversely affects the interests of the holders
of Right Certificates). For all purposes of this Agreement, any calculation of
the number of shares of Common Stock or other securities outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock or any other securities
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d- 3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act as in effect on the date of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties, and (y) not subject the
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<PAGE> 57
Board to any liability to the holders of the Right Certificates or holders of
shares of Common Stock.
Section 29. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Common Stock) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
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Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
Attest: SYSCO CORPORATION
By
- ----------------------------------- ---------------------------------
Name: Name:
Title: Title:
Attest: BOSTON EQUISERVE, L.P.
By
- ----------------------------------- ---------------------------------
Name: Name:
Title: Title:
55
<PAGE> 59
Exhibit A
FORM OF AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
SYSCO CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Bill M. Lindig, President, and La Dee G. Riker, Secretary, of
SYSCO Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions of
Section 103 thereof, DO HEREBY CERTIFY:
That (i) pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said Corporation,
the said Board of Directors on May 14, 1986, adopted a resolution creating a
series of 450,000 shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock and (ii) no shares of the Series A Junior
Participating Preferred Stock have been issued.
WE DO FURTHER HEREBY CERTIFY:
That pursuant to the authority conferred upon by the Board of
Directors by the Restated Certificate of Incorporation of the said Corporation
and Section 151(g) of the General Corporation Law of the State of Delaware, the
said Board of Directors on May 8, 1996 adopted the following resolution
amending the voting powers, preferences and relative participating, optional or
other special rights of the shares of the Series A Junior Participating
Preferred Stock, and the qualifications, limitations or restrictions thereof
while keeping the designation of such series unchanged:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its Restated
Certificate of Incorporation, that the series of Preferred Stock of the
Corporation previously designated "Series A Junior Participating Preferred
Stock" remain so designated and that the terms thereof be amended so that the
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
<PAGE> 60
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock," par value $1
per share, and the number of shares constituting such series shall be 450,000.
Such number of shares may be increased or decreased by resolution of the Board
of Directors; provided, that no decrease shall reduce the number of shares of
Series A Junior Preferred Stock to a number less than that of the shares then
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued
by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock, in preference to the holders of shares of Common Stock, par value $1 per
share (the "Common Stock"), of the Corporation and any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the 28th day of February and the 30th day of each of May,
August and November in each year (or, in each case, if not a date on which the
Corporation is open for business, the next succeeding business day) or such
earlier date in any such month on which dividends on the Common Stock are
payable (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $20.00 or (b) subject to the provision for
adjustment hereinafter set forth, 2,000 times the aggregate per share amount of
all cash dividends, and 2,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock,
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Junior Participating Preferred
Stock. In the event the Corporation shall at any time after May 30, 1996 (the
"Rights Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
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<PAGE> 61
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $20.00 per share
on the Series A Junior Participating Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Junior Participating Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Junior Participating Preferred Stock shall entitle the
holder thereof to 2,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which
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<PAGE> 62
holders of shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on all
shares of Series A Junior Participating Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the Series A
Junior Participating Preferred Stock) with dividends in arrears in an amount
equal to six (6) quarterly dividends thereon, voting as a class, irrespective
of series, shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number. After the
holders of the Preferred Stock shall have exercised their right to elect
Directors in any default period and during the continuance of such period, the
number of Directors shall not be increased
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<PAGE> 63
or decreased except by vote of the holders of Preferred Stock as herein
provided or pursuant to the rights of any equity securities ranking senior to
or pari passu with the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request, the
calling of special meeting of the holders of Preferred Stock, which meeting
shall thereupon be called by the President, a Vice-President or the Secretary
of the Corporation. Notice of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote pursuant to this paragraph
(C)(iii) shall be given to each holder of record of Preferred Stock by mailing
a copy of such notice to him at his last address as the same appears on the
books of the Corporation. Such meeting shall be called for a time not earlier
than 20 days and not later than 60 days after such order or request or in
default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding. Notwithstanding the
provisions of this paragraph (C)(iii), no such special meeting shall be called
during the period within 60 days immediately preceding the date fixed for the
next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation if applicable, shall continue to
be entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except
as provided in paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall have become
vacant. References in this paragraph (C) to Directors elected by the holders
of a particular class of stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the Certificate of Incorporation or By-laws
irrespective of any increase made pursuant to the provisions
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<PAGE> 64
of paragraph (C)(ii) of this Section 3 (such number being subject, however to
change thereafter in any manner provided by law or in the Certificate of
Incorporation or By-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled
by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Junior Participating Preferred Stock outstanding shall have been paid
in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, except dividends paid
ratably on the Series A Junior Participating Preferred Stock and all
such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock;
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<PAGE> 65
(iv) purchase or otherwise acquire for consideration any
shares of Series A Junior Participating Preferred Stock, or any shares
of stock ranking on a parity with the Series A Junior Participating
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received $350,000 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment (the "Series A Liquidation Preference"). Following the
payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 2,000 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series A Junior Participating Preferred Stock
and holders of
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<PAGE> 66
shares of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the Adjustment Number to
1 with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of preferred stock, if any, which
rank on a parity with the Series A Junior Participating Preferred Stock, then
such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In
the event there are not sufficient assets available to permit payment in full
of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 2,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Junior Participating Preferred Stock
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that are outstanding immediately prior to such event.
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<PAGE> 67
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation's Preferred
Stock as to the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.
Section 10. Amendment. The Restated Certificate of Incorporation of
the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holders fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred
Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this
day of , 1996.
--------------------------------------
President
Attest:
- ----------------------------
Secretary
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Exhibit B
[Form of Rights Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER MAY 31, 2006 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY
THIS CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE AMENDED AND RESTATED RIGHTS
AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY ARE NULL AND VOID.]*
Rights Certificate
SYSCO 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 Amended And Restated Rights Agreement dated as
of May 20, 1996 (the "Rights Agreement") between SYSCO Corporation, a Delaware
corporation (the "Company"), and Boston EquiServe, L.P. (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (Houston time)
on May 30, 2006 at the principal office of the Rights Agent, or its successors
as Rights Agent, one two-thousandths of a fully paid, nonassessable share of
Series A Junior Participating Preferred Stock (the "Preferred Stock") of the
Company, at a
- -----------------------
* The portion of the legend in brackets shall be inserted only if applicable.
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<PAGE> 69
purchase price of $175 per one two-thousandths of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
appropriate Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of May 20, 1996, based on the
Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Preferred Stock or other securities which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the principal office of the Company and
are also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent, may be exercised
for another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
shares of Preferred Stock as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised (other than pursuant to Section
11(a)(ii) of the Rights Agreement) in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised. If this Rights Certificate shall
be exercised in
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whole or in part in pursuant to Section 11(a)(ii) of the Rights Agreement, the
holder shall be entitled to receive this Rights Certificate duly marked to
indicate that such exercise has occurred as set forth in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one two-thousandth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
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<PAGE> 71
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of , 19 .
Attest: SYSCO CORPORATION
By
- ----------------------------------- -----------------------------------
Name: Name:
Title: Title:
Countersigned:
[ ]
- -----------------------------------
Authorized Signature
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<PAGE> 72
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _______________________________________________ hereby sells,
assigns and transfers unto _____________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________________, 19__
____________________________________
Signature
Signature Guaranteed:
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<PAGE> 73
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of 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 or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,19
--------------- --------------------------------------------
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
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<PAGE> 74
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights
Certificate other than pursuant to Section 11(a)(ii) of the
Rights Agreement.)
To SYSCO CORPORATION:
The undersigned hereby irrevocably elects to exercise ___________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock (or such other securities of the Company or any other Person)
issuable upon the exercise of the Rights and requests that certificates for
such shares be issued in the name of:
Please insert social security
or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
The Rights Certificate indicating the balances, if any, of such Rights
which may still be exercised pursuant to each of Section 11(a)(ii) and Section
13 of the Rights Agreement shall be returned to the undersigned unless such
person requests that the Rights Certificate be registered in the name of and
delivered to:
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated: ,19
--------------- --------------------------------------------
Signature
Signature Guaranteed:
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<PAGE> 75
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of 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 or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,19
--------------- --------------------------------------------
Signature
NOTICE
The signature to the foregoing Election to Purchase 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.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
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<PAGE> 76
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To SYSCO CORPORATION:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock (or such other securities of the Company) issuable upon the exercise of
the Rights and requests that certificates for such shares be issued in the name
of:
Please insert social security
or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
The Rights Certificate indicating the balances, if any, of such Rights
which may still be exercised pursuant to each of Section 11(a)(ii) and Section
13 of the Rights Agreement shall be returned to the undersigned unless such
person requests that the Rights Certificate be registered in the name of and
delivered to:
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated: ,19
--------------- --------------------------------------------
Signature
Signature Guaranteed:
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<PAGE> 77
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of 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 or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,19
--------------- --------------------------------------------
Signature
NOTICE
The signature to the foregoing Election to Purchase 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.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
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Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On May 14, 1986, the Board of Directors of SYSCO Corporation (the
"Company") declared a dividend distribution of one Right for each outstanding
share of common stock, par value $1 per share (the "Common Stock"), of the
Company to stockholders of record at the close of business on May 30, 1986 (the
"Record Date"). On May 8, 1996, the Board of Directors of the Company adopted
certain amendments to the terms of the Rights. Except as set forth below, each
Right, when exercisable, entitles the registered holder to purchase from the
Company one two-thousandth of a share of a series of preferred stock,
designated as Series A Junior Participating Preferred Stock, par value $1 per
share (the "Preferred Stock"), at a price of $175 per one two thousandth of a
share (the "Purchase Price), subject to adjustment. The description and terms
of the Rights are set forth in an Amended and Restated Rights Agreement (the
"Rights Agreement") between the Company and Boston EquiServe, L.P., as Rights
Agent.
Until the earliest to occur of (i) a public announcement that, without
the prior consent of the Board of Directors of the Company, a person or group
of affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 10% or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), or (ii) ten
business days (or such later date as the Board may determine) following the
commencement of (or a public announcement of an intention to make) a tender
offer or exchange offer which would result in any person or group and related
persons having beneficial ownership of 10% or more of the outstanding shares of
Common Stock without the prior consent of the Board of Directors of the
Company, or (iii) twenty business days prior to the date on which a Transaction
(as such term is hereinafter defined) is reasonably expected to become
effective or be consummated (the earliest of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Stock certificates outstanding as of May 20, 1996, by such Common Stock
certificate and no separate Rights Certificates will be distributed. The
Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with Common Stock certificates. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after May 20, 1996, (or as soon thereafter as
practicable) upon transfer or new issuance of the Common Stock 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 Stock outstanding as of
May 20, 1996, will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate, even without such notation.
As soon as practicable
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following the Distribution Date, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date, and the separate Rights
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 31, 2006, unless earlier redeemed by the Company as
described below.
In the event that any person becomes an Acquiring Person, each holder
of a Right generally will thereafter have the right for a 60 day period after
the later of the date of such event or the effectiveness of an appropriate
registration statement (or such other longer period set by the Board of
Directors) to receive upon exercise of the Right that number of units of one
two-thousandths of a share of Preferred Stock (or, under certain circumstances,
Common Stock or other securities) having an average market value during a
specified time period (immediately prior to the occurrence of a Person becoming
an Acquiring Person) of two times the exercise price of the Right (such right
being called the "Subscription Right"). Notwithstanding the foregoing,
following the occurrence of a Person becoming an Acquiring Person, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by the Acquiring Person or any affiliate or associate
thereof will be null and void.
In the event that, at any time following the Stock Acquisition Date
or, if a Transaction is proposed, the Distribution Date, the Company is
acquired in a merger or other business combination transaction or 50% or more
of the Company's assets or earning power are sold (in one transaction or a
series of transactions), proper provision shall be made so that each holder of
a Right (except a Right voided as set forth above) shall thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
(or, in the event there is more than one acquiring company, the acquiring
company receiving the greatest portion of the assets or earning power
transferred) which at the time of such transaction would have a market value of
two times the exercise price of the Right (such right being called the "Merger
Right"). The holder of a Right will continue to have the Merger Right whether
or not such holder exercises the Subscription Right.
The Purchase Price payable, the number of Rights and the number of
units of one two-thousandths of a share of Preferred Stock or shares of the
Common Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for Preferred Stock,
certain convertible securities or securities having the same or more favorable
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rights, privileges and preferences as the Preferred Stock at less than the
current market price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends out of earnings or retained
earnings and dividends payable in Preferred Stock) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractions of shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
The number of outstanding Rights associated with each share of Common
Stock and the voting and economic rights of each one two-thousandths of a share
of Preferred Stock issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Stock or a stock
dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such case,
prior to the Distribution Date.
At any time prior to the earlier to occur of (i) the close of business
on the Stock Acquisition Date or (ii) the expiration of the Rights, the Company
may redeem the Rights in whole, but not in part, at a price of $.01 per Right
(the "Redemption Price"), which redemption shall be effective upon the action
of the Board of Directors. Additionally, following the Stock Acquisition Date
and the expiration of the period during which the Subscription Right is
exercisable, the Board of Directors may redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price provided that such redemption
is in connection with a merger or other business combination transaction or
series of transactions involving the Company in which all holders of Common
Stock are treated alike but not involving an Acquiring Person (or any person
who was an Acquiring Person) or it affiliates or associates. Upon the
effective date of the 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.
In the event that a majority of the Board of Directors of the Company
in office following a meeting of stockholders or stockholder action by written
consent are not nominated by the Board of Directors serving immediately prior
to such meeting or action, then for 365 days following such meeting or action
the Rights may not be redeemed or amended if such redemption or amendment is
reasonably likely to facilitate a combination or sale of assets or earning
power (a "Transaction") with a person who (A) either (i) is or will become an
Acquiring Person or (ii) is a party involved in a merger or consolidation with,
or a sale of assets by, the Company or affiliate or associate thereof if the
Transaction were to be consummated and (B) who has directly or indirectly
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proposed or nominated a member of the Board who is in office at the time the
Transaction is being considered (a "Transaction Person"). The Rights may not
be redeemed thereafter if during such 365 day period the Company enters into
any agreement reasonably likely to facilitate a Transaction with a Transaction
Person and the redemption is reasonably likely to facilitate a Transaction with
a Transaction Person.
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company may
issue (unless otherwise provided in the terms of such stock). Each share of
Preferred Stock will have a preferential quarterly dividend in an amount equal
to the greater of $20.00 and 2,000 times the dividend declared on each Common
Share. In the event of liquidation, the holders of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $350,000 and
2,000 times the payment made per Common Share. Each share of Preferred Stock
will have 2,000 votes, voting together with the Common Shares. In the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged, each share of Preferred Stock will be entitled to receive 2,000
times the amount and type of consideration received per Common Share. The
rights of the Preferred Stock as to dividends, liquidation and voting, and in
the event of mergers and consolidations, are protected by customary
anti-dilution provisions. Fractional shares of Preferred Stock in integral
multiples of one two-thousandth of a share of Preferred Stock will be issuable;
however, the Company may elect to distribute depositary receipts in lieu of
such fractional shares. In lieu of fractional shares other than fractions that
are multiples of one two-thousandth of a share, an adjustment in cash will be
made based on the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
Except as set forth above, the terms of the Rights may be amended by
the Board of Directors of the Company, (i) prior to the Distribution Date in
any manner, and (ii) on or after the Distribution Date to cure any ambiguity,
to correct or supplement any provision of the Rights Agreement which may be
defective or inconsistent with any other provisions, or in any manner not
adversely affecting the interests of the holders of the Rights.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Form 8-A/A amending a Registration
Statement on Form 8-A. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is
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qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
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