Exhibit 1
EXECUTION COPY
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RIGHTS AGREEMENT
dated as of March 17, 2000
between
OFFICEMAX, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
as Rights Agent
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Table of Contents
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Section Page
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1. Certain Definitions....................................................1
2. Appointment of Rights Agent............................................9
3. Issue of Rights and Right Certificates.................................9
4. Form of Right Certificates............................................12
5. Execution, Countersignature and
Registration..........................................................12
6. Transfer, Split-Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates; Uncertificated
Rights................................................................13
7. Exercise of Rights; Expiration Date
of Rights.............................................................14
8. Cancelation and Destruction of Right
Certificates..........................................................16
9. Reservation and Availability of
Preferred Shares......................................................17
10. Preferred Shares Record Date..........................................19
11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights for
Shares; Business Combinations.........................................19
12. Certain Adjustments...................................................25
13. Certificate of Adjustment.............................................26
14. Additional Covenants..................................................27
15. Fractional Rights and Fractional Shares ..............................27
16. Rights of Action......................................................29
17. Transfer and Ownership of Rights and
Right Certificates....................................................29
18. Right Certificate Holder Not Deemed
a Shareholder.........................................................30
19. Concerning the Rights Agent...........................................30
20. Merger or Consolidation or Change
of Rights Agent.......................................................31
21. Duties of Rights Agent................................................31
22. Change of Rights Agent................................................34
23. Issuance of Additional Rights and
Right Certificates....................................................35
24. Redemption and Termination............................................36
25. Notices...............................................................37
26. Supplements and Amendments............................................37
27. Successors............................................................38
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28. Benefits of Rights Agreement;
Determinations and Actions by the
Board of Directors, etc...............................................38
29. Severability..........................................................39
30. Governing Law.........................................................39
31. Counterparts; Effectiveness...........................................39
32. Descriptive Headings..................................................40
Exhibits
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A Certificate of Amendment
B Form of Right Certificate
C Summary of Rights
RIGHTS AGREEMENT dated as of March 17, 2000, between
OfficeMax, Inc., an Ohio corporation (the "Company"), and
First Chicago Trust Company of New York, a New York trust
company, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one Right (as hereinafter defined) for each Common Share (as
hereinafter defined) outstanding at the Close of Business (as hereinafter
defined) on the date hereof (the "Record Date"), and has authorized the issuance
of one Right (as such number may hereafter be adjusted pursuant to the
provisions of this Rights Agreement) with respect to each Common Share that
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date (as such terms are
hereinafter defined); provided, however, that Rights may be issued with respect
to Common Shares that shall become outstanding after the Distribution Date and
prior to the earlier of the Redemption Date or the Expiration Date in accordance
with the provisions of Section 23. Each Right shall initially represent the
right to purchase one one-thousandth (1/1,000th) of a share of the Series A
Participating Cumulative Serial Preferred Shares, without par value, of the
Company (the "Preferred Shares"), having the powers, rights and preferences set
forth in the Certificate of Amendment attached as Exhibit A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Rights Agreement,
the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 15.0% of the Common Shares then outstanding, but
shall not include the Company, any Subsidiary of the Company, any employee
benefit or compensation plan of the Company or of any of its Subsidiaries or any
Person holding Common Shares for or pursuant to the terms of any such employee
benefit or compensation plan. Notwithstanding the foregoing, the term "Acquiring
Person" shall not include any such Person who has become and is the Beneficial
Owner of more than 15.0% of the
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Common Shares at the time outstanding solely as the result of (a) a change in
the aggregate number of Common Shares outstanding since the last date on which
such Person acquired Beneficial Ownership of any Common Shares, (b) the
acquisition by such Person or one or more of its Affiliates or Associates of
Beneficial Ownership of additional Common Shares if such acquisition was made in
the good faith belief that such acquisition would not (i) cause the Beneficial
Ownership by such Person, together with its Affiliates and Associates, to exceed
15.0% of the Common Shares outstanding at the time of such acquisition and such
good faith belief was based on the good faith reliance on information contained
in publicly filed reports or documents of the Company that are inaccurate or
out-of-date or (ii) otherwise cause a Distribution Date or the adjustment
provided for in Section 11(a) to occur, or (c) the acquisition by such Person or
one or more of its Affiliates or Associates of Beneficial Ownership of
additional Common Shares if the Board of Directors of the Company determines
that such acquisition was made in good faith without the knowledge by such
Person or one or more of its Affiliates or Associates that such Person would
thereby become an Acquiring Person, which determination of the Board of
Directors of the Company shall be conclusive and binding on such Person, the
Rights Agent, the holders of the Rights and all other Persons. Notwithstanding
clause (b) or (c) of the immediately preceding sentence, if any Person that is
not an Acquiring Person due to such clause (b) or (c) does not reduce its
percentage of Beneficial Ownership of Common Shares to 15.0% or less by the
Close of Business on the tenth calendar day after notice from the Company (the
date of notice being the first day) that such Person's Beneficial Ownership of
Common Shares would make it an Acquiring Person, such Person shall, at the end
of such ten calendar day period, become an Acquiring Person (and such clauses
(b) and (c) of the immediately preceding sentence shall no longer apply to such
Person). For purposes of this definition, the determination whether any Person
acted in "good faith" shall be conclusively determined by the Board of Directors
of the Company.
"Affiliate" and "Associate", when used with reference to any Person,
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
of this Rights Agreement.
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A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", and shall be deemed to have "Beneficial Ownership"
of, any securities:
(a) which such Person or any of such Person's Affiliates or Associates
is deemed to "beneficially own" within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, as in effect on the
date of this Rights Agreement;
(b) which such Person or any of such Person's Affiliates or Associates
has, directly or indirectly: (i) the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (written or oral), or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed under this clause (i) to be the Beneficial Owner
of, or to beneficially own, or to have Beneficial Ownership of, any
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange
thereunder or cease to be subject to withdrawal by the tendering security
holder; or (ii) the right to vote pursuant to any agreement, arrangement or
understanding (written or oral); provided, however, that a Person shall not
be deemed under this clause (ii) to be the Beneficial Owner of, or to
beneficially own, any security if (A) the agreement, arrangement or
understanding (written or oral) to vote such security arises solely from a
revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made generally to all holders of Common
Shares pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act and (B) the beneficial ownership of such
security is not also then reportable on Schedule 13D or 13G under the
Exchange Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (written or
oral) for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to clause (b)(ii) of this
definition) or disposing of any securities of the Company.
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Notwithstanding the foregoing, nothing contained in this definition shall cause
a Person ordinarily engaged in business as an underwriter of securities to be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment underwriting pursuant to an underwriting agreement with the Company.
"Book Value", when used with reference to Common Shares issued by any
Person, shall mean the amount of equity of such Person applicable to each Common
Share, determined (a) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value is to be
determined, (b) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a Business Combination, and (c) after giving effect
to (i) the exercise of all rights, options and warrants to purchase such Common
Shares (other than the Rights), and the conversion of all securities convertible
into such Common Shares, at an exercise or conversion price, per Common Share,
which is less than such Book Value before giving effect to such exercise or
conversion (whether or not exercisability or convertibility is conditioned upon
occurrence of a future event), (ii) all dividends and other distributions on the
capital stock of such Person declared prior to the date as of which such Book
Value is to be determined and to be paid or made after such date, and (iii) any
other agreement, arrangement or understanding (written or oral), or transaction
or other action contemplated prior to the date as of which such Book Value is to
be determined that would have the effect of thereafter reducing such Book Value.
"Business Combination" shall have the meaning set forth in Section
11(c)(i).
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in the Borough of
Manhattan, the City of New York, are authorized or obligated by law or executive
order to close.
"Certificate of Amendment" shall mean the Certificate of Amendment to
the Second Amended and Restated Articles of Incorporation of the Company setting
forth the powers, preferences, rights, qualifications, limitations and
restrictions of such series of Serial Preferred Shares of the Company, a copy of
which is attached as Exhibit A.
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"Close of Business" on any given date shall mean 5:00 p.m., New York,
New York time, on such date; provided, however, that, if such date is not a
Business Day, "Close of Business" shall mean 5:00 p.m., New York, New York time,
on the next succeeding Business Day.
"Common Shares", when used with reference to the Company prior to a
Business Combination, shall mean the Common Shares, without par value, of the
Company or any other shares of capital stock of the Company into which such
Common Shares shall be reclassified or changed. "Common Shares", when used with
reference to any Person (other than the Company prior to a Business
Combination), shall mean shares of capital stock of such Person (if such Person
is a corporation) of any class or series, or units of equity interests in such
Person (if such Person is not a corporation) of any class or series, the terms
of which do not limit (as a maximum amount and not merely in proportional terms)
the amount of dividends or income payable or distributable on such class or
series or the amount of assets distributable on such class or series upon any
voluntary or involuntary liquidation, dissolution or winding up of such Person
and do not provide that such class or series is subject to redemption at the
option of such Person, or any shares of capital stock or units of equity
interests into which the foregoing shall be reclassified or changed.
"Company" shall have the meaning set forth in the heading of this
Rights Agreement; provided, however, that if there is a Business Combination,
"Company" shall have the meaning set forth in Section 11(c)(iii).
The term "control" with respect to any Person shall mean the power to
direct the management and policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Distribution Date" shall have the meaning set forth in Section 3(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
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"Exchange Consideration" shall have the meaning set forth in Section
11(b)(i).
"Expiration Date" shall have the meaning set forth in Section 7(a).
"Major Part", when used with reference to the assets of the Company
and its Subsidiaries as of any date, shall mean assets (a) having a fair market
value aggregating 50% or more of the total fair market value of all the assets
of the Company and its Subsidiaries (taken as a whole) as of the date in
question, (b) accounting for 50% or more of the total value (net of depreciation
and amortization) of all the assets of the Company and its Subsidiaries (taken
as a whole) as would be shown on a consolidated or combined balance sheet of the
Company and its Subsidiaries as of the date in question, prepared in accordance
with generally accepted accounting principles then in effect, or (c) accounting
for 50% or more of the total amount of earnings before interest, taxes,
depreciation and amortization or of the revenues of the Company and its
Subsidiaries (taken as a whole) as would be shown on, or derived from, a
consolidated or combined statement of income or net earnings of the Company and
its Subsidiaries for the period of 12 months ending on the last day of the
Company's monthly accounting period next preceding the date in question,
prepared in accordance with generally accepted accounting principles then in
effect.
"Market Value", when used with reference to Common Shares or Preferred
Shares on any date, shall mean the average of the daily closing prices, per
share, of such Common Shares or Preferred Shares, as applicable, for the period
which is the shorter of (a) 30 consecutive Trading Days ending on the Trading
Day immediately prior to the date in question or (b) the number of consecutive
Trading Days beginning on the Trading Day immediately after the date of the
first public announcement of the event requiring a determination of the Market
Value of Common Shares or Preferred Shares, as applicable, and ending on the
Trading Day immediately prior to the record date of such event; provided,
however, that, in the event that the Market Value of such Common Shares or
Preferred Shares, as applicable, is to be determined in whole or in part during
a period following the announcement by the issuer of such Common Shares or
Preferred Shares, as applicable, of any action of the type described in Section
12(a) that would require an adjustment thereunder, then, and in each such case,
the Market Value of such Common Shares or Preferred Shares, as applicable, shall
be appropriately adjusted to reflect the effect of such action on the market
price of such Common
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Shares or Preferred Shares, as applicable. The closing price for each Trading
Day shall be the closing price quoted on the composite tape for securities
listed on the New York Stock Exchange, or, if such securities are not quoted on
such composite tape or if such securities are not listed on such exchange, on
the principal United States securities exchange registered under the Exchange
Act (or any recognized foreign stock exchange) on which such securities are
listed, or, if such securities are not listed on any such exchange, the closing
price quoted on The Nasdaq Stock Market or, if such securities are not so
quoted, the average of the closing bid and asked quotations with respect to a
share of such securities on any National Association of Securities Dealers, Inc.
quotations system or such other system then in use, or if no such quotations are
available, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such securities selected by the
Board of Directors of the Company, or if on any such Trading Day no market maker
is making a market in such securities, the closing price of such securities on
such Trading Day shall be deemed to be the fair value of such securities as
determined in good faith by the Board of Directors of the Company (whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent, the holders of Rights and all other
Persons); provided, however, that for the purpose of determining the closing
price of the Preferred Shares for any Trading Day on which there is no such
market maker for the Preferred Shares the closing price on such Trading Day
shall be deemed to be the Formula Number (as defined in the Certificate of
Amendment) multiplied by the closing price of the Common Shares of the Company
on such Trading Day.
"Person" shall mean an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.
"Principal Party" shall mean the Surviving Person in a Business
Combination; provided, however, that, (i) if such Surviving Person is a direct
or indirect Subsidiary of any other Person, "Principal Party" shall mean the
Person which is the ultimate parent of such Surviving Person and
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which is not itself a Subsidiary of another Person, and (ii) in the event
ultimate control of such Surviving Person is shared by two or more Persons,
"Principal Party" shall mean that Person that is immediately controlled by such
two or more Persons.
"Purchase Price" with respect to each Right shall mean $30.00, as such
amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references herein
to the Purchase Price shall mean the Purchase Price as in effect at the time in
question.
"Record Date" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth in Section 24(a).
"Redemption Price" with respect to each Right shall mean $.01, as such
amount may from time to time be adjusted in accordance with Section 12. All
references herein to the Redemption Price shall mean the Redemption Price as in
effect at the time in question.
"Registered Common Shares" shall mean Common Shares that are, as of
the date of consummation of a Business Combination, and have continuously been
for the 12 months immediately preceding such date, registered under Section 12
of the Exchange Act.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form attached as Exhibit B.
"Rights" shall mean the rights to purchase Preferred Shares (or other
securities) as provided in this Rights Agreement.
"Securities Act" shall mean the Securities Act of 1933, as in effect
on the date in question, unless otherwise specifically provided.
"Subsidiary" shall mean a Person, at least a majority of the total
outstanding voting power (being the power under ordinary circumstances (and not
merely upon the happening of a contingency) to vote in the election of directors
of such Person (if such Person is a corporation) or to participate in the
management and control of such Person (if such Person is not a corporation)) of
which is owned, directly or indirectly, by another Person or by one
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or more other Subsidiaries of such other Person or by such other Person and one
or more other Subsidiaries of such other Person.
"Surviving Person" shall mean (a) the Person which is the continuing
or surviving Person in a consolidation or merger specified in Section
11(c)(i)(A) or 11(c)(i)(B) or (b) the Person to which the Major Part of the
assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in a transaction specified in Section
11(c)(i)(C); provided, however, that, if the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred
or disposed of in one or more related transactions specified in Section
11(c)(i)(C) to more than one Person, the "Surviving Person" in such case shall
mean the Person that acquired assets of the Company and/or its Subsidiaries with
the greatest fair market value in such transaction or transactions.
"Trading Day" shall mean a day on which the principal national
securities exchange (or principal recognized foreign stock exchange, as the case
may be) on which any securities or Rights, as the case may be, are listed or
admitted to trading is open for the transaction of business or, if the
securities or Rights in question are not listed or admitted to trading on any
national securities exchange (or recognized foreign stock exchange, as the case
may be), a Business Day.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3, shall prior to the Distribution Date also be
the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint one or more co-Rights Agents as it may deem necessary
or desirable upon 10 days prior written notice (which may be waived by written
agreement of the Rights Agent) to the Rights Agent (the term "Rights Agent"
being used herein to refer, collectively, to the Rights Agent together with any
such co-Rights Agents, provided that no Rights Agent shall have any duty to
supervise, or shall in any event be liable for the acts or omissions, of any co-
Rights Agent). In the event the Company appoints one or more co-Rights Agents,
the respective duties of the Rights Agent and any co-Rights Agents shall be as
the Company shall determine.
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SECTION 3. Issue of Rights and Right Certificates. (a) One Right shall
be associated with each Common Share outstanding on the Record Date, each
additional Common Share that shall become outstanding between the Record Date
and the earliest of the Distribution Date, the Redemption Date or the Expiration
Date and each additional Common Share with which Rights are issued after the
Distribution Date but prior to the earlier of the Redemption Date or the
Expiration Date as provided in Section 23; provided, however, that, if the
number of outstanding Rights are combined into a smaller number of outstanding
Rights pursuant to Section 12(a), the appropriate fractional Right determined
pursuant to such Section shall thereafter be associated with each such Common
Share.
(b) Until the earlier of (i) such time as the Company learns that a
Person has become an Acquiring Person and (ii) the Close of Business on such
date, if any, as may be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit or compensation plan of the
Company or of any of its Subsidiaries, or any Person holding Common Shares for
or pursuant to the terms of any such employee benefit or compensation plan) for
outstanding Common Shares, if upon consummation of such tender or exchange offer
such Person could be the Beneficial Owner of more than 15.0% of the outstanding
Common Shares (the Close of Business on the earlier of such dates being the
"Distribution Date"), (x) the Rights shall, except as otherwise provided in
Section 3(c), be evidenced by the certificates for Common Shares registered in
the names of the holders thereof and not by separate Right Certificates, and (y)
the Rights, including the right to receive Right Certificates, will be
transferable only in connection with the transfer of Common Shares. The Company
shall notify the Rights Agent as promptly as practicable that the Distribution
Date has occurred. As soon as practicable after the Distribution Date, the
Rights Agent shall send, by first-class, postage-prepaid mail, to each record
holder of Common Shares as of the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certificate evidencing one
whole Right for each Common Share (or for the number of Common Shares with which
one whole Right is then associated if the number of Rights per Common Share held
by such record holder has been adjusted in accordance with the proviso in
Section 3(a)). If the number of Rights associated with each Common Share has
been adjusted in accordance with the proviso in Section 3(a), at the time of
distribution of the Right Certificates the
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Company may make any necessary and appropriate rounding adjustments so that
Right Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Right in accordance with Section 15(a).
The Company shall notify the Rights Agent as promptly as practicable of any such
adjustments. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Right Certificates.
(c) As soon as practicable, and in any event no later than 30 days,
after the Record Date, the Company will send a copy of a Summary of Rights to
Purchase Preferred Shares, in substantially the form attached hereto as Exhibit
C (the "Summary of Rights"), by first-class, postage prepaid mail, to each
record holder of Common Shares as of the Close of Business on the Record Date at
the address of such holder shown on the records of the Company. With respect to
any certificate for Common Shares outstanding as of the Record Date, until the
earliest of the Distribution Date, the Redemption Date or the Expiration Date,
(i) the Rights associated with the Common Shares represented by any such
certificate shall be evidenced by such certificates for the Common Shares and
the registered holders of the Common Shares shall also be the registered holders
of the associated Rights and (ii) the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(d) Certificates issued for Common Shares after the Record Date
(including upon transfer or exchange of outstanding Common Shares), but prior to
the earliest of the Distribution Date, the Redemption Date or the Expiration
Date, shall have printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of March 17,
2000 (as it may be amended from time to time (the "Rights Agreement")),
between OfficeMax, Inc. (the "Company") and First Chicago Trust Company of
New York, as Rights Agent (the "Rights Agent"), the terms of which
(including restrictions on the transfer of such Rights) are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights shall be evidenced by
separate certificates and shall no longer be evidenced by this certificate.
The Company shall mail to the holder of this certificate a copy of the
Rights
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Agreement without charge within 5 days after receipt of a written request
therefor. RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR
AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID
AND NONTRANSFERABLE.
Notwithstanding this Section 3(d), neither the omission of a legend nor the
inclusion of a legend that makes reference to a rights agreement other than the
Rights Agreement shall affect the enforceability of any part of this Rights
Agreement or the rights of any holder of Rights.
SECTION 4. Form of Right Certificates. The Right Certificates (and the
form of election to purchase and form of assignment to be printed on the reverse
side thereof) shall be in substantially the form set forth as Exhibit B 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 Rights 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 Sections 7, 11 and 23, the Right Certificates, whenever issued,
shall be dated as of the Distribution Date, and on their face shall entitle the
holders thereof to purchase such number of Preferred Shares as shall be set
forth therein for the Purchase Price set forth therein, subject to adjustment
from time to time as herein provided.
SECTION 5. Execution, Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by the Chairman of the
Board, the President or any Vice President (whether preceded by any additional
title) of the Company and by the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid or obligatory for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such an officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such an
officer of the
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Company; and any Right Certificate may be signed on behalf of the Company by any
person who, at the actual date of execution of such Right Certificate, shall be
a proper officer of the Company to sign such Right Certificate, although at the
date of execution of this Rights Agreement any such person was not such an
officer of the Company.
(b) Following the Distribution Date, the Rights Agent shall keep or
cause to be kept, at its principal office in New York, New York, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced by each of the Right Certificates,
the certificate number of each of the Right Certificates and the date of each of
the Right Certificates.
SECTION 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates;
Uncertificated Rights. (a) Subject to Sections 7(e) and 15, at any time after
the Distribution Date, and at or prior to the Close of Business on the earlier
of the Redemption Date or the Expiration Date, any Right Certificate or Right
Certificates (other than those that have become void) may be transferred, split-
up, combined or exchanged for another Right Certificate or Right Certificates
representing, in the aggregate, the same number of Rights as the Right
Certificate or Right Certificates surrendered then represented. Any registered
holder desiring to transfer, split-up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent and shall
surrender the Right Certificate or Right Certificates to be transferred, split-
up, combined or exchanged at the principal office of the Rights Agent; provided,
however, that neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any Right Certificate
surrendered for transfer until the registered holder shall have completed and
signed the certification contained in the form of assignment on the reverse side
of such Right Certificate and shall have provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company or the Rights Agent shall reasonably
request. Thereupon the Rights Agent shall, subject to Sections 7(e) and 15,
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with
14
any transfer, split-up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a valid Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancelation of the Right Certificate if mutilated, the Company shall make a new
Right Certificate of like tenor and deliver such new Right Certificate to the
Rights Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates;
provided, however, that notice is provided to shareholders of the Company in
accordance with Ohio law, including, without limitation, any notice required by
Section 1701.24(F) of the Ohio Revised Code.
SECTION 7. Exercise of Rights; Expiration Date of Rights. (a) Subject
to Section 7(e) and except as otherwise provided herein (including Section 11),
each Right shall entitle the registered holder thereof, upon exercise thereof as
provided herein, to purchase for the Purchase Price, at any time after the
Distribution Date and at or prior to the earlier of (i) the Close of Business on
the 10th anniversary of the date of this Rights Agreement (the Close of Business
on such date being the "Expiration Date") and (ii) the Redemption Date, one
one-thousandth (1/1,000th) of a Preferred Share, subject to adjustment from time
to time as provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent
in New York, New York, together with payment of the Purchase Price for each one
one-thousandth (1/1,000th) of a Preferred Share as to which the Rights are
exercised, at or prior to the earlier of (i) the Expiration Date and (ii) the
Redemption Date.
15
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares to be purchased together
with an amount equal to any applicable transfer tax, in lawful money of the
United States of America, in cash or by certified check or money order payable
to the order of the Company, the Rights Agent shall thereupon (i) either (A)
promptly requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or (B) if the
Company shall have elected to deposit the Preferred Shares with a depositary
agent under a depositary arrangement, promptly requisition from the depositary
agent depositary receipts representing the number of one one-thousandths
(1/1,000ths) of a Preferred Share to be purchased (in which case certificates
for the Preferred Shares to be represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the Company shall direct
the depositary agent to comply with all such requests, (ii) when appropriate,
promptly requisition from the Company the amount of cash 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 Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to such holder's duly authorized assigns, subject to the
provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the contrary,
any Rights that are at any time beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to
16
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 7(e), shall 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 Rights Agreement or otherwise. The
Company shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) are complied with, but shall have no liability to any holder of any
Right Certificate or any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliate or
Associate, or any transferee thereof, hereunder.
(f) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of any Right Certificates upon the
occurrence of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
(g) The Company may temporarily suspend, for a period of time not to
exceed 90 calendar days after the Distribution Date, the exercisability of the
Rights in order to prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration statement
to become effective; provided, however, that no such suspension shall remain
effective after, and the Rights shall without any further action by the Company
or any other Person become exercisable immediately upon, the effectiveness of
such registration statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue a further public announcement at such time
as the suspension is no longer in effect. Notwithstanding any provision herein
to the contrary, the Rights shall not be exercisable
17
in any jurisdiction if the requisite qualification under the blue sky or
securities laws of such jurisdiction shall not have been obtained or the
exercise of the Rights shall not be permitted under applicable law.
SECTION 8. Cancelation and Destruction of Right Certificates. All
Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right Certificate
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be delivered to the Rights
Agent for cancelation or in canceled form, or, if surrendered or presented to
the Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Rights Agreement.
The Company shall deliver to the Rights Agent for cancelation and retirement,
and the Rights Agent shall so cancel and retire, any Right Certificate purchased
or acquired by the Company. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. Reservation and Availability of Preferred Shares. (a) The
Company shall cause to be reserved and kept available out of its authorized and
unissued Preferred Shares or any authorized and issued Preferred Shares held in
its treasury, free from preemptive rights or any right of first refusal, a
number of Preferred Shares sufficient to permit the exercise in full of all
outstanding Rights.
(b) If there are not sufficient Preferred Shares issued but not
outstanding or authorized but unissued to permit the exercise or exchange of
Rights in accordance with Section 11, the Company shall take all such action as
may be necessary to authorize additional Preferred Shares for issuance upon the
exercise or exchange of Rights pursuant to Section 11; provided, however, that
if the Company is unable to cause the authorization of additional Preferred
Shares, then the Company shall, or (if action by the Company's shareholders is
necessary to cause such authorization) in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (i) upon surrender of a Right, pay
cash equal to the Purchase Price in lieu of issuing Preferred Shares and
requiring payment therefor,
18
(ii) upon due exercise of a Right and payment of the Purchase Price for each
Preferred Share as to which such Right is exercised, issue Common Shares or
other equity securities having a value equal to the value of the Preferred
Shares that otherwise would have been issuable pursuant to Section 11, which
value shall be determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company, or (iii) upon due exercise of
a Right and payment of the Purchase Price for each Preferred Share as to which
such Right is exercised, distribute a combination of Preferred Shares, cash
and/or other equity and/or debt securities having an aggregate value equal to
the value of the Preferred Shares that otherwise would have been issuable
pursuant to Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company. To the extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution Date to which it
is party) prevent the Company from paying the full amount payable in accordance
with the foregoing sentence, the Company shall pay to holders of the Rights as
to which such payments are being made all amounts that are not then restricted
on a pro rata basis as such payments become permissible under such legal or
contractual restrictions until such payments have been paid in full.
(c) The Company shall take all such action as may be necessary to
ensure that all Preferred Shares delivered upon exercise or exchange of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to 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 or exchangeable, all Preferred Shares reserved for
such issuance to be listed on such securities exchange upon official notice of
issuance upon such exercise or exchange.
(e) The Company shall pay when due and payable any and all Federal and
state transfer taxes and charges which may be payable in respect of the issuance
or delivery of Right Certificates or of any Preferred Shares or Common Shares or
other securities upon the exercise or exchange of the Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any
19
transfer or delivery of Right Certificates to a Person other than, or in respect
of the issuance or delivery of certificates for the Preferred Shares or Common
Shares or other securities, as the case may be, in a name other than that of,
the registered holder of the Right Certificate evidencing Rights surrendered for
exercise or exchange or to issue or deliver any certificates for Preferred
Shares or Common Shares or other securities, as the case may be, upon the
exercise or exchange of any Rights until any such tax shall have been paid (any
such tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
SECTION 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares or Common Shares or other securities is
issued upon the exercise or exchange of Rights shall for all purposes be deemed
to have become the holder of record of the Preferred Shares or Common Shares or
other securities, as the case may be, represented thereby on, and such
certificate shall be dated, the date on which the Right Certificate evidencing
such Rights was duly surrendered and payment of any Purchase Price (and any
applicable transfer taxes) was made; provided, however, that, if the date of
such surrender and payment is a date upon which the transfer books of the
Company for the Preferred Shares or Common Shares or other securities, as the
case may be, are closed, such Person shall be deemed to have become the record
holder of such Preferred Shares or Common Shares or other securities, as the
case may be, on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Shares
or Common Shares or other securities, as the case may be, are open.
SECTION 11. Adjustments in Rights After There Is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations. (a) Upon a Person becoming
an Acquiring Person, each holder of a Right, except as provided in Section 7(e),
shall thereafter have a right to receive, upon exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, such number of
Common Shares as shall equal the result obtained by multiplying the Purchase
Price by a fraction (the "Adjustment Fraction"), the numerator of which is the
number of one one-thousandths (1/1,000ths) of a Preferred Share for which such
Right is then exercisable and the denominator of which is 50% of the Market
Value of the Common Shares on the date on which such Person became an Acquiring
Person; provided, however, that to the extent that thereafter at the time of
exercise of any Right there are not sufficient Common Shares authorized but
20
unissued (counting as issued any Common Shares reserved for issuance upon the
exercise of any options to purchase Common Shares granted before or after the
date of this Agreement and counting as authorized but unissued any Common Shares
held by the Company as treasury shares) to permit such exercise, the holder of
each such Right (except as provided in Section 7(e)) shall have the right to
receive, in lieu of Common Shares, upon exercise of such Right for the Purchase
Price in accordance with the terms of this Rights Agreement, such number of one
one-thousandths (1/1,000ths) of a Preferred Share as shall equal the result
obtained by multiplying the Purchase Price by the Adjustment Fraction. In the
event that on any Business Day at or prior to the Close of Business on such
Business Day duly executed Right Certificates representing in the aggregate
Rights then exercisable for more Common Shares than the aggregate of the number
of Common Shares that are authorized but unissued (counting as issued any Common
Shares reserved for issuance upon the exercise of any options to purchase Common
Shares granted before or after the date of this Agreement and counting as
authorized but unissued any Common Shares held by the Company as treasury
shares) shall be surrendered to the Rights Agent for exercise in accordance with
Section 7, then each holder of such Rights shall receive first Common Shares and
then one one-thousandths (1/1,000ths) of a Preferred Share pro rata with each
other holder of such Rights based on the number of Rights that each such holder
duly exercised on such Business Day at or prior to the Close of Business on such
Business Day. As soon as practicable after a Person becomes an Acquiring Person
(provided the Company shall not have elected to make the exchange permitted by
Section 11(b)(i) for all outstanding Rights), the Company shall use its best
efforts to:
(i) prepare and file a registration statement under the Securities
Act, on an appropriate form, with respect to the Common Shares and the
Preferred Shares purchasable upon exercise of the Rights;
(ii) cause such registration statement to become effective as soon as
practicable after such filing;
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date; and
(iv) qualify or register the Common Shares and the Preferred Shares
purchasable upon exercise of the Rights under the blue sky or securities
laws of such jurisdictions as may be necessary or appropriate.
21
(b)(i) The Board of Directors of the Company may, at its option, at
any time after a Person becomes an Acquiring Person, mandatorily exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that shall have become null and void and nontransferable pursuant to
Section 7(e)) for consideration per Right consisting of either (A) one-half of
the securities that would be issuable at such time upon the exercise of one
Right in accordance with Section 11(a) or, if applicable, Section 9(b)(ii) or
9(b)(iii) or (B) if applicable, the cash consideration specified in Section
9(b)(i) (the consideration issuable per Right pursuant to this Section 11(b)(i)
being the "Exchange Consideration"). If the Board of Directors of the Company
elects to exchange all the Rights for Exchange Consideration pursuant to this
Section 11(b)(i) prior to the physical distribution of the Right Certificates,
the Company may distribute the Exchange Consideration in lieu of distributing
Right Certificates, in which case for purposes of this Rights Agreement holders
of Rights shall be deemed to have simultaneously received and surrendered for
exchange Right Certificates on the date of such distribution. Notwithstanding
the foregoing, the Board of Directors of the Company may not effect such
exchange at any time after 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 Person holding Common Shares for or pursuant to the terms of
any such employee benefit or compensation plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of more than 50% of
the Common Shares then outstanding.
(ii) Any action of the Board of Directors of the Company ordering the
exchange of any Rights pursuant to Section 11(b)(i) shall be irrevocable and,
immediately upon the taking of such action and without any further action and
without any notice, the right to exercise any such Right so exchanged pursuant
to Section 11(a) shall terminate and the only right thereafter of a holder of
such Right shall be to receive the Exchange Consideration in exchange for each
such Right held by such holder or, if the Exchange Consideration shall not have
been paid or issued, to exercise any such Right pursuant to Section 11(c)(i).
The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all holders of the Rights to be exchanged at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the
22
holder receives the notice. Each such notice of exchange shall state the method
by which the exchange of the Rights for the Exchange Consideration will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which shall have become null and void and
nontransferable pursuant to the provisions of Section 7(e)) held by each holder
of Rights.
(c)(i) In the event that, directly or indirectly, any transactions
specified in the following clause (A), (B) or (C) of this Section 11(c)(i) (each
such transaction being a "Business Combination") shall be consummated:
(A) the Company shall consolidate with, or merge with and into, any
Acquiring Person or any Affiliate or Associate of an Acquiring Person;
(B) any Acquiring Person or any Affiliate or Associate of an Acquiring
Person shall merge with and into the Company and, in connection with such
merger, all or part of the outstanding Common Shares shall be changed into
or exchanged for capital stock or other securities of the Company or of any
Acquiring Person or Affiliate or Associate of an Acquiring Person or cash
or any other property; or
(C) the Company shall sell, lease, exchange or otherwise transfer or
dispose of (or one or more of its Subsidiaries shall sell, lease, exchange
or otherwise transfer or dispose of), in one or more transactions, the
Major Part of the assets of the Company and its Subsidiaries (taken as a
whole) to any Acquiring Person or any Affiliate or Associate of an
Acquiring Person,
then, in each such case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, the securities specified below (or, at such
holder's option, the securities specified in Section 11(a) if the Company is the
surviving corporation in such Business Combination):
(1) if the Principal Party in such Business Combination has Registered
Common Shares outstanding, each Right shall thereafter represent the right
to receive, upon the exercise thereof for the Purchase Price in accordance
with the terms of this Rights Agreement, such number of Registered Common
Shares of
23
such Principal Party, free and clear of all liens, encumbrances or other
adverse claims, as shall have an aggregate Market Value as of the time of
exercise thereof equal to the result obtained by multiplying the Purchase
Price by two;
(2) if the Principal Party involved in such Business Combination does
not have Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, at the
election of the holder of such Right at the time of the exercise thereof,
any of:
(x) such number of Common Shares of the Surviving Person in such
Business Combination as shall have an aggregate Book Value immediately
after giving effect to such Business Combination equal to the result
obtained by multiplying the Purchase Price by two;
(y) such number of Common Shares of the Principal Party in such
Business Combination (if the Principal Party is not also the Surviving
Person in such Business Combination) as shall have an aggregate Book
Value immediately after giving effect to such Business Combination
equal to the result obtained by multiplying the Purchase Price by two;
or
(z) if the Principal Party in such Business Combination is an
Affiliate of one or more Persons that has Registered Common Shares
outstanding, such number of Registered Common Shares of whichever of
such Affiliates of the Principal Party has Registered Common Shares
with the greatest aggregate Market Value on the date of consummation
of such Business Combination as shall have an aggregate Market Value
on the date of such Business Combination equal to the result obtained
by multiplying the Purchase Price by two.
(ii) The Company shall not consummate any Business Combination unless
each issuer of Common Shares for which Rights may be exercised, as set forth in
this Section 11(c), shall have sufficient authorized Common Shares that have not
been issued or reserved for issuance (and which shall, when issued upon exercise
thereof in accordance with this Rights Agreement, be validly issued, fully paid
and nonassessable and free of preemptive rights,
24
rights of first refusal or any other restrictions or limitations on the transfer
or ownership thereof) to permit the exercise in full of the Rights in accordance
with this Section 11(c) and unless prior thereto:
(A) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights, shall be effective under
the Securities Act; and
(B) the Company and each such issuer shall have:
(1) executed and delivered to the Rights Agent a supplemental
agreement providing for the assumption by such issuer of the
obligations set forth in this Section 11(c) (including the obligation
of such issuer to issue Common Shares upon the exercise of Rights in
accordance with the terms set forth in Sections 11(c)(i) and
11(c)(iii)) and further providing that such issuer, at its own
expense, shall use its best efforts to:
(x) cause a registration statement under the Securities Act
on an appropriate form, with respect to the Rights and the Common
Shares of such issuer purchasable upon exercise of the Rights, to
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(y) qualify or register the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights under the
blue sky or securities laws of such jurisdictions as may be
necessary or appropriate; and
(z) list the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights on each national
securities exchange on which the Common Shares were listed prior
to the consummation of the Business Combination or, if the Common
Shares were not listed on a national securities exchange prior to
the consummation of the Business Combination, on a national
securities exchange;
25
(2) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement is a
valid, binding and enforceable agreement of such issuer; and
(3) filed with the Rights Agent a certificate of a nationally
recognized firm of independent accountants setting forth the number of
Common Shares of such issuer that may be purchased upon the exercise
of each Right after the consummation of such Business Combination.
(iii) After consummation of any Business Combination and subject to
the provisions of Section 11(c)(ii), (A) each issuer of Common Shares for which
Rights may be exercised as set forth in this Section 11(c) shall be liable for,
and shall assume, by virtue of such Business Combination, all the obligations
and duties of the Company pursuant to this Rights Agreement, (B) the term
"Company" shall thereafter be deemed to refer to such issuer, (C) each such
issuer shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof (including the provisions of
Sections 11(a) and 11(c)) shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights, and (D) the number of Common Shares of each such
issuer thereafter 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 of Sections 11 and 12 and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such Common Shares.
SECTION 12. Certain Adjustments. (a) To preserve the actual or
potential economic value of the Rights, if at any time after the date of this
Rights Agreement there shall be any change in the Common Shares or the Preferred
Shares, whether by reason of stock dividends, stock splits, reclassifications,
recapitalizations, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to holders
of Common Shares or Preferred Shares, as the case may be (other than
distribution of the Rights or regular quarterly cash dividends), or otherwise,
then, in each such event the Board of Directors of the Company shall make such
appropriate adjustments in the number of Preferred Shares (or the number
26
and kind of other securities) issuable upon exercise of each Right, the Purchase
Price and Redemption Price in effect at such time and the number of Rights
outstanding at such time (including the number of Rights or fractional Rights
associated with each Common Share) such that following such adjustment such
event shall not have had the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section 12(a),
the holder of any Right thereafter exercised shall become entitled to receive
any securities other than Preferred Shares, thereafter the number of such
securities 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 of Sections 11 and 12 and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such other securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities relating
to a Right shall evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(d) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Shares or number or kind of other securities issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms that were expressed in the
initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment 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 Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect 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 securities upon the
occurrence of the event requiring such adjustment.
27
SECTION 13. Certificate of Adjustment. Whenever an adjustment is made
as provided in Section 11 or 12, 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 Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) in accordance with Section 25,
provided that the failure to prepare, file or mail such certificate or summary
shall not affect the validity of such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained.
SECTION 14. Additional Covenants. (a) Notwith standing any other
provision of this Rights Agreement, no adjustment to the number of Preferred
Shares (or fractions of a share) or other securities for which a Right is exer
cisable or the number of Rights outstanding or associated with each Common Share
or any similar or other 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, includ ing the
benefits under Sections 11 and 12, unless the terms of this Rights Agreement are
amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the Distribution
Date, except as permitted by Section 26, it shall not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce or
otherwise limit the benefits the holders of the Rights would have had absent
such action, including the benefits under Sections 11 and 12. Any action taken
by the Company during any period after any Person becomes an Acquiring Person
but prior to the Distribution Date shall be null and void unless such action
could be taken under this Section 14(b) from and after the Distribution Date.
The Company shall not consummate any Business Combination if any issuer of
Common Shares for which Rights may be exercised after such Business Combination
in accordance with Section 11(c) shall have taken any action that reduces or
otherwise limits the benefits the holders of the Rights would have had absent
such action, including the benefits under Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares. (a) The Company
may, but shall not be required to, issue fractions of Rights or distribute Right
Certificates
28
which evidence fractional Rights. In lieu of such fractional Rights, the Company
may pay to the registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Right. For purposes of
this Section 15(a), the current market value of a whole Right shall be the
closing price of the Rights (as determined pursuant to the second sentence of
the definition of Market Value contained in Section 1) for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable.
(b) The Company may, but shall not be required to, issue fractions of
Preferred Shares upon exercise of the Rights or distribute certificates that
evidence fractional Preferred Shares. In lieu of fractional Preferred Shares,
the Company may elect to (i) utilize a depository arrangement as provided by the
terms of the Preferred Shares or (ii) in the case of a fraction of a Preferred
Share (other than one one-thousandths (1/1,000ths) of a Preferred Share or any
integral multiple thereof), pay to the registered holders of Right Certificates
at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one Preferred Share, if any
are outstanding and publicly traded (or the same fraction of the current market
value of one Common Share times the Formula Number (as defined in the
Certificate of Amendment) if the Preferred Shares are not outstanding and
publicly traded). For purposes of this Section 15(b), the current market value
of a Preferred Share (or Common Share) shall be the closing price of a Preferred
Share (or Common Share) (as determined pursuant to the second sentence of the
definition of Market Value contained in Section 1) for the Trading Day
immediately prior to the date of such exercise. If, as a result of an adjustment
made pursuant to Section 12(a), the holder of any Right thereafter exercised
shall become entitled to receive any securities other than Preferred Shares, the
provisions of this Section 15(b) shall apply, as nearly as reasonably may be, on
like terms to such other securities.
(c) The Company may, but shall not be required to, issue fractions of
Common Shares upon exercise of Rights following an adjustment in Rights pursuant
to Section 11(a) or upon exchange of Rights pursuant to Section 11(b), or to
distribute certificates that evidence fractional Common Shares. In lieu of such
fractional Common Shares, the Company may pay to the registered holders of the
Right Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal
29
to the same fraction of the current Market Value of one Common Share as of the
date on which a Person became an Acquiring Person.
(d) Each holder of Rights by the acceptance of such Rights expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as provided in this Section 15.
SECTION 16. Rights of Action. (a) All rights of action in respect of
this Rights Agreement are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares) may, in such holder's own behalf
and for such holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this Rights
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 Rights Agreement
and shall be entitled to specific performance of the obligations of any Person
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred in such action.
SECTION 17. Transfer and Ownership of Rights and Right Certificates.
(a) Prior to the Distribution Date, the Rights shall be transferable only in
connection with the transfer of the Common Shares and the Right associated with
each Common Share shall be automatically transferred upon the transfer of each
Common Share.
(b) After the Distribution Date, the Right Certificates shall be
transferable, subject to Section 7(e), only on the registry books of the Rights
Agent if surren dered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer.
30
(c) The Company and the Rights Agent may deem and treat the Person in
whose name a Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any nota tions of
ownership or writing on the Right Certificates or the associated certificate for
Common Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
SECTION 18. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote or receive
dividends or other distributions or be deemed, for any purpose, the holder of
the Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company, including any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders, or to receive dividends or
other distributions or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 19. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reason able compensation for all services rendered by it
hereunder and from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Rights Agreement and the exercise and performance of its
duties hereunder, including any taxes or governmental charges imposed as a
result of the action taken by it hereunder (other than any taxes on the fees
payable to it).
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administra tion of this Rights Agreement in reliance upon any Right
Certificate or certificate for the Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
31
signed, executed and, where necessary, verified or acknowl edged, by the proper
Person or Persons.
SECTION 20. Merger or Consolidation or Change of Rights Agent. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Rights Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided, however, that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 22.
In case, at the time such successor Rights Agent shall succeed to the agency
created by this Rights Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any succes sor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not deliv ered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so counter signed; and, in case at that time
any of the Right Certifi cates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right Certifi
cates (or, prior to the Distribution Date, of the Common Shares), by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the
32
opinion of such counsel shall be full and complete author ization and protection
to the Rights Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including the identity of any Acquiring Person) be proved or established
by the Company prior to taking, refraining from taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, a Vice President (whether preceded by any additional title), the
Treasurer or the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Rights
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or wilful 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 Rights Agreement or in the
Right Certifi cates (except as to its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right Certifi
cate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 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 Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any
33
Preferred Shares or Common Shares to be issued pursuant to this Rights Agreement
or any Right Certificate or as to whether any Preferred Shares or Common Shares
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or per forming by the Rights Agent of
the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the perfor mance of its duties hereunder from any
one of the Chairman of the Board, the President, a Vice President (whether
preceded by any additional title), the Secretary or the Treasurer of the
Company, in connection with its duties and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, direc tor, 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 or its Subsidiaries may be interested, or contract with or
lend money to the Company or its Subsidiaries or otherwise act as fully and
freely as though it were not the Rights Agent under this Rights Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
(j) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage or expense (including reasonable
fees and expenses of legal counsel) which the Rights Agent may incur resulting
from its actions as Rights Agent pursuant to this Rights
34
Agreement; provided, however, that the Rights Agent shall not be indemnified or
held harmless with respect to any such loss, liability, damage or expense
incurred by the Rights Agent as a result of, or arising out of, its own
negligence, bad faith or wilful misconduct. In no case shall the Company be
liable with respect to any action, proceeding, suit or claim against the Rights
Agent unless the Rights Agent shall have notified the Company, by letter or by
facsimile confirmed by letter, of the assertion of any action, proceeding, suit
or claim against the Rights Agent, promptly after the Rights Agent shall have
notice of any such assertion of an action, proceeding, suit or claim or have
been served with the summons or other first legal process giving information as
to the nature and basis of the action, proceeding, suit or claim. The Company
shall be entitled to participate at its own expense in the defense of any such
action, proceeding, suit or claim, and, if the Company so elects, the Company
shall assume the defense of any such action, proceeding, suit or claim. In the
event that the Company assumes such defense, the Company shall not thereafter be
liable for the fees and expenses of any additional counsel retained by the
Rights Agent, so long as the Company shall retain counsel satisfactory to the
Rights Agent, in the exercise of its reasonable judgment, to defend such action,
proceeding, suit or claim. The Rights Agent agrees not to settle any litigation
in connection with any action, proceeding, suit or claim with respect to which
it may seek indemnification from the Company without the prior written consent
of 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
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates
(or, prior to the Distribution Date, of the Common Shares) by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Shares and the Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates (or, prior to the Distribution Date, of the
Common Shares) 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 incapaci-
35
tated Rights Agent or by the holder of a Right Certificate (or, prior to the
Distribution Date, of the Common Shares) (who shall, with such notice, submit
such holder's Right Certificate or, prior to the Distribution Date, the
certificate representing such holder's Common Shares, for inspection by the
Company), then the registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares) may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of the State of New York (or of any other state of the United
States so long as such corporation is authorized to conduct a stock transfer
or corporate trust business in the State of New York), in good standing,
having a principal office in the State of New York, which is authorized under
such laws to exercise stock transfer or 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 $5,000,000; provided, however, that the principal transfer agent for
the Common Shares shall in any event be qualified to be the Rights Agent.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Shares and the Preferred Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates (or, prior to the
Distribution Date, of the Common Shares). 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 Additional Rights and Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change made in accordance with the provisions of this
Rights Agreement. In addition, in connection with the issuance or sale of
36
Common Shares following the Distribution Date and prior to the earlier of the
Redemption Date and the Expiration Date, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exer cise, conversion or
exchange of securities, notes or deben tures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Right Certificates representing the appropriate number of
Rights in connection with such issu ance or sale; provided, however, that (i) no
such Right Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax conse quences to the Company or the Person to whom such
Right Certificate would be issued, (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof and (iii) no such Right Certificate
shall be issued to an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
SECTION 24. Redemption and Termination. (a) The Board of Directors of
the Company may, at its option, at any time prior to the earlier of (i) such
time as a Person becomes an Acquiring Person and (ii) the Expiration Date, order
the redemption of all, but not fewer than all, of the then outstanding Rights at
the Redemption Price (the date of such redemption being the "Redemption Date"),
and the Company, at its option, may pay the Redemption Price either in cash or
Common Shares or other securities of the Company deemed by the Board of
Directors of the Company, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 Business Days after the action of the Board of
Directors of the Company ordering the 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 all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Each such notice of redemption shall state the method by which
payment of the Redemption Price will be made. The notice, if mailed in the
37
manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder of Rights receives such notice. In any case, failure
to give such notice by mail, or any defect in the notice, to any particular
holder of Rights shall not affect the sufficiency of the notice to other holders
of Rights. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
except as specifically set forth in this Section or in Section 11(b) or in
connection with the purchase of Common Shares prior to the Distribution Date.
SECTION 25. Notices. Notices or demands author ized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
OfficeMax, Inc.
P.O. Box 228070
Cleveland, OH 44122-8070
Attention: Corporate Secretary
Subject to the provisions of Section 22, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) 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:
First Chicago Trust Company of New York, a
division of EquiServe
525 Washington Boulevard
Jersey City, NJ 07310
Attention: Corproate Secretary
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate (or, prior
to the Distribution Date, of the Common Shares) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Rights Agent
or, prior to the Distri bution Date, on the registry books of the transfer agent
for the Common Shares.
38
SECTION 26. Supplements and Amendments. At any time prior to the time
any person becomes an Acquiring Person, and subject to the last sentence of this
Section 26, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Rights Agreement in any
manner which the Company may deem necessary or desirable (including the date on
which the Expiration Date or the Distribution Date shall occur, the amount of
the Purchase Price, the definition of "Acquiring Person" or the time during
which the Rights may be redeemed pursuant to Section 24) without the approval of
any holder of the Rights. From and after the time any Person becomes an
Acquiring Person, and subject to applicable law, the Company may, and the Rights
Agent shall if the Company so directs, amend this Rights Agreement without the
approval of any holders of Right Certificates (a) to cure any ambiguity or to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provision of this Rights Agreement or (b) to
otherwise change or supplement any other provisions in this Agreement in any
matter which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person). Any
supplement or amendment adopted during any period after any Person has become an
Acquiring Person but prior to the Distribution Date shall be null and void
unless such supplement or amendment could have been adopted under the prior
sentence from and after the Distribution Date. Any supplement or amendment to
this Rights Agreement duly approved by the Company that does not amend Section
19, 20, 21 or 22 in a manner adverse to the Rights Agent shall become effective
immediately upon execution by the Company, whether or not also executed by the
Rights Agent. In addition, notwithstanding anything to the contrary contained in
this Rights Agreement, no supplement or amendment to this Rights Agreement shall
be made which reduces the Redemption Price (except as required by Section
12(a)).
SECTION 27. Successors. All the covenants and provisions of this
Rights 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 28. Benefits of Rights Agreement; Determinations and Actions
by the Board of Directors, etc. (a) Nothing in this Rights Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and,
39
prior to the Distribution Date, of the Common Shares) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, of the Common Shares).
(b) Except as explicitly otherwise provided in this Rights Agreement,
the Board of Directors of the Company shall have the exclusive power and
authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including the right and power to (i) interpret the provisions
of this Rights Agreement and (ii) make all determinations deemed necessary or
advisable for the administration of this Rights Agreement (including a
determination to redeem or not redeem the Rights or to amend this Rights
Agreement and a determination of whether there is an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall be deemed to be
in derogation of the obligation of the Board of Directors of the Company to
exercise its fiduciary duty. Without limiting the foregoing, nothing contained
herein shall be construed to suggest or imply that the Board of Directors shall
not be entitled to reject any tender offer or other acquisition proposal, or to
recommend that holders of Common Shares reject any tender offer, or to take any
other action (including the commencement, prosecution, defense or settlement of
any litigation and the submission of additional or alternative offers or other
proposals) with respect to any tender offer or other acquisition proposal that
the Board of Directors believes is necessary or appropriate in the exercise of
such fiduciary duty.
SECTION 29. Severability. If any term, provi sion, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 30. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the law
of the State of Ohio and for all purposes shall be governed by and construed in
accordance with the law of such State applicable to con tracts to be made and
performed entirely within such State.
40
SECTION 31. Counterparts; Effectiveness. This Rights 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. This Rights Agreement shall
be effective as of the Close of Business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Rights Agreement.
41
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
OFFICEMAX, INC.
by /s/ Ross H. Pollock
---------------------------
Name: Ross H. Pollock
Title: Secretary
FIRST CHICAGO TRUST COMPANY OF NEW
YORK,
by /s/ Gerard J. O'Leary
---------------------------
Name: Gerard J. O'Leary
Title: Managing Director
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO THE
SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
OFFICEMAX,INC.
Michael Feuer, Chairman of the Board of Directors, and Ross H.
Pollock, Secretary, of OfficeMax, Inc., an Ohio corporation (the "Corporation"),
do hereby certify that at a meeting of the Board of Directors of the Corporation
held on March 17, 2000, the following resolutions to amend the Second Amended
and Restated Articles of Incorporation, as amended, of the Corporation were
adopted pursuant to the authority granted by Section 1701.70(B)(1) of the Ohio
Revised Code:
RESOLVED, that the Second Amended and Restated Articles of
Incorporation, as amended, of the Corporation be, and they hereby are, amended
by adding at the end of Division A of Article Fourth a new Section 7 that reads
as follows:
Section 7. Series A Participating Cumulative Serial Preferred Shares.
(a) Designation and Amount. Of the 100,000,000 authorized Serial
Preferred Shares, 1,500,000 are designated as a series designated as "Series A
Participating Cumulative Serial Preferred Shares" (the "Series A Preferred
Shares"). The Series A Preferred Shares have the express terms set forth in this
Division as being applicable to all Serial Preferred Shares as a class and, in
addition, the following express terms applicable to all Series A Preferred
Shares as a series of Serial Preferred Shares. The number of Series A Preferred
Shares may be increased (subject to paragraph (i) of this Section 7) or
decreased by resolution of the Board of Directors and by the filing of a
certificate of amendment pursuant to the provisions of the General Corporation
Law of the State of Ohio stating that such increase or reduction has been so
authorized; however, no decrease shall reduce the number of Series A Preferred
Shares to a number less than that of the Series A Preferred Shares then
outstanding plus the number of Series A Preferred Shares issuable upon exercise
of outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
(b) Dividends or Distributions. (1) Subject to the rights of the
holders of shares of any other class of capital stock of the Corporation ranking
prior to the Series A Preferred Shares with respect to dividends, the holders of
the
2
Series A Preferred Shares shall be entitled to receive, when, as and if declared
by the Board of Directors, out of the assets of the Corporation legally
available therefor, (A) quarterly dividends payable in cash on the last day of
each fiscal quarter in each year, or such other dates as the Board of Directors
of the Corporation shall approve (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 Series A Preferred Share or a
fraction of a Series A Preferred Share, in the amount of $0.05 per whole Series
A Preferred Share (rounded to the nearest cent) less the amount of all cash
dividends declared on the Series A Preferred Shares pursuant to the following
clause (B) since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any Series A Preferred Share or fraction of a Series A Preferred
Share (the total of which shall not, in any event, be less than zero) and (B)
dividends payable in cash on the payment date for each cash dividend declared on
the Common Shares in an amount per whole Series A Preferred Share (rounded to
the nearest cent) equal to the Formula Number (as hereinafter defined) then in
effect times the cash dividends then to be paid on each Common Share. In
addition, if the Corporation shall pay any dividend or make any distribution on
the Common Shares payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions payable solely in Common
Shares), then, in each such case, the Corporation shall simultaneously pay or
make on each outstanding whole Series A Preferred Share a dividend or
distribution in like kind equal to the Formula Number then in effect times such
dividend or distribution on each Common Share. As used herein, the "Formula
Number" shall be 1,000; provided, however, that, if at any time after March 17,
2000, the Corporation shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or make any distribution on the Common Shares in Common
Shares, (ii) subdivide (by a stock split or otherwise) the outstanding Common
Shares into a larger number of Common Shares or (iii) combine (by a reverse
stock split or otherwise) the outstanding Common Shares into a smaller number of
Common Shares, then in each such event the Formula Number shall be adjusted to a
number determined by multiplying the Formula Number in effect immediately prior
to such event by a fraction, the numerator of which is the number of Common
Shares that are outstanding immediately after such event and the denominator of
which is the number of Common Shares that are outstanding immediately prior to
such event (and rounding the result to the nearest whole number); and provided
further that, if at any time after March 17, 2000, the Corporation shall issue
any shares of its capital stock in a merger, reclassification, or change of the
outstanding Common Shares,
3
then in each such event the Formula Number shall be appropriately adjusted to
reflect such merger, reclassification or change so that each Series A Preferred
Share continues to be the economic equivalent of a Formula Number of Common
Shares prior to such merger, reclassification or change.
(2) The Corporation shall declare a dividend or distribution on the
Series A Preferred Shares as provided in subparagraph (b)(1) immediately prior
to or at the same time it declares a dividend or distribution on the Common
Shares (other than a dividend or distribution payable solely in Common Shares);
provided, however, that, in the event no dividend or distribution (other than a
dividend or distribution payable solely in Common Shares) shall have been
declared on the Common Shares during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $0.05 per share on the Series A Preferred Shares shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date. The Board of
Directors may fix a record date for the determination of holders of Series A
Preferred Shares entitled to receive a dividend or distribution declared
thereon, which record date shall be the same as the record date for any
corresponding dividend or distribution on the Common Shares.
(3) Dividends shall begin to accrue and be cumulative on outstanding
Series A Preferred Shares from and after the Quarterly Dividend Payment Date
next preceding the date of original issue of such Series A Preferred Shares;
provided, however, that dividends on such shares which are originally issued
after the record date for the determination of holders of Series A Preferred
Shares entitled to receive a quarterly dividend and on or prior to the next
succeeding Quarterly Dividend Payment Date shall begin to accrue and be
cumulative from and after such Quarterly Dividend Payment Date. Notwithstanding
the foregoing, dividends on Series A Preferred Shares which are originally
issued prior to the record date for the determination of holders of Series A
Preferred Shares entitled to receive a quarterly dividend on the first Quarterly
Dividend Payment Date shall be calculated as if cumulative from and after the
last day of the fiscal quarter next preceding the date of original issuance of
such shares. Accrued but unpaid dividends shall not bear interest. Dividends
paid on Series A Preferred Shares 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.
4
(4) So long as any Series A Preferred Shares are outstanding, no
dividends or other distributions shall be declared, paid or distributed, or set
aside for payment or distribution, on the Common Shares unless, in each case,
the dividend required by this paragraph (b) of this Section 7 to be declared on
the Series A Preferred Shares shall have been declared.
(5) The holders of the Series A Preferred Shares shall not be entitled
to receive any dividends or other distributions except as provided herein.
(c) Voting Rights. (1) The holders of Series A Preferred Shares shall
have the voting rights set forth in Article Fourth, Division A, Section 5 of
these Articles.
(2) Except as provided in Article Fourth, Division A, Section 5 of
these Articles, in paragraph (i) of this Section 7 or by applicable law, holders
of Series A Preferred Shares shall have no voting rights and their consent shall
not be required for authorizing or taking any corporate action.
(d) Liquidation Rights. Upon the liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, no distribution shall
be made (1) to the holders of shares ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Shares
unless, prior thereto, the holders of Series A Preferred Shares shall have
received an amount equal to the accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, plus an amount
equal to the greater of (x) $1,000 per whole share or (y) an aggregate amount
per share equal to the Formula Number then in effect times the aggregate amount
to be distributed per share to holders of Common Shares or (2) to the holders of
shares ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Shares, except
distributions made ratably on the Series A Preferred Shares and all other such
parity shares in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up.
(e) Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which Common
Shares are exchanged for or changed into other shares or securities, cash or any
other property, then in any such case the then outstanding Series A Preferred
Shares shall at the same time be similarly exchanged or changed into an amount
per share
5
equal to the Formula Number then in effect times the aggregate amount of shares,
securities, cash or any other property (payable in kind), as the case may be,
into which or for which each Common Share is exchanged or changed. In the event
both this paragraph (e) of this Section 7 and paragraph (b) of this Section 7
appear to apply to a transaction, this paragraph (e) of this Section 7 will
control.
(f) No Redemption; No Sinking Fund. (1) The Series A Preferred Shares
shall not be subject to redemption by the Corporation or at the option of any
holder of Series A Preferred Shares; provided, however, that, subject to Article
Fourth, Division A the Corporation may purchase or otherwise acquire outstanding
Series A Preferred Shares in the open market or by offer to any holder or
holders of Series A Preferred Shares.
(2) The Series A Preferred Shares shall not be subject to or entitled
to the operation of a retirement or sinking fund.
(g) Fractional Shares. The Series A Preferred Shares shall be issuable
in whole shares or in any fraction of a share that is one one-thousandth of a
share or any integral multiple of such fraction which shall entitle the holder,
in proportion to such holder's fractional shares, to receive dividends, exercise
voting rights, participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Shares. In lieu of fractional shares,
the Corporation, prior to the first issuance of a Series A Preferred Share or a
fraction of a Series A Preferred Share, may elect (1) to make a cash payment for
fractions of a share other than one one-thousandths of a share or any integral
multiple thereof or (2) to issue depository receipts evidencing such authorized
fraction of a Series A Preferred Share pursuant to an appropriate agreement
between the Corporation and a depository selected by the Corporation; provided,
however, that such agreement shall provide that the holders of such depository
receipts shall have all the rights, privileges and preferences to which they are
entitled as holders of the Series A Preferred Shares.
(h) Reacquired Shares. Any Series A Preferred Shares purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof. All such shares shall upon
their cancelation become authorized but unissued Serial Preferred Shares,
without designation as to series until such shares are once more designated as
part of a particular series by the Board of Directors pursuant to the provisions
of these Articles.
6
(i) Additional Serial Preferred Shares. If any Series A Preferred
Shares are outstanding, the Corporation shall not, with the purpose or effect of
diluting the voting power of the outstanding Series A Preferred Shares, increase
the number of authorized Series A Preferred Shares (except as may be required by
the Rights Agreement dated as of March 17, 2000 between the Corporation and
First Chicago Trust Company of New York, as Rights Agent) or issue shares of any
other series of the Serial Preferred Shares without the affirmative vote of the
holders of at least two-thirds of the outstanding Series A Preferred Shares.
(j) Severability. If any term or other provision of this Section 7 is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Section 7 shall nevertheless
remain in full force and effect.
RESOLVED FURTHER, that, any officer of the Corporation is hereby
authorized to sign and file with the Secretary of State of the State of Ohio one
or more certificates in the form required by Section 1701.73(A) of the General
Corporation Law of the State of Ohio setting forth a copy of these resolutions.
IN WITNESS WHEREOF, the undersigned have duly executed this
Certificate of Amendment on this 17th day of March, 2000.
MICHAEL FEUER,
-------------------------------
Title: Chairman of the Board of
Directors
ROSS H. POLLOCK,
-------------------------------
Title: Secretary
EXHIBIT B
[Form of Right Certificate]
Certificate No. [R]-
___________ Rights
NOT EXERCISABLE AFTER MARCH 17, 2010, OR EARLIER IF REDEEMED BY THE
COMPANY. 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 COMPANY SHALL MAIL TO THE HOLDER OF THIS CERTIFICATE A
COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE WITHIN 5 DAYS AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND
NONTRANSFERABLE.
Right Certificate
OFFICEMAX, INC.
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of March 17, 2000 as it may be amended from time to time (the
"Rights Agreement"), between OfficeMax, Inc., an Ohio corporation (the
"Company"), and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent"), unless the Rights evidenced hereby shall have been previously
redeemed or exchanged by the Company, to purchase from the Company at any time
after the Distribution Date (as defined in the Rights Agreement) and prior to
5:00 p.m., New York City time, on the 10th anniversary of the date of the Rights
Agreement (the "Expiration Date"), at the principal office or offices of the
Rights Agent designated for such purpose, or its successors as Rights Agent, one
one- thousandth (1/1,000th) of a fully paid, nonassessable share of the Series A
Participating Cumulative Serial Preferred Shares, without par value, of the
Company (the "Preferred Shares"), at a purchase price per one one-thousandth
(1/1,000th) of a share equal to $30.00 (the "Purchase Price") payable in cash,
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed.
2
The Purchase Price and the number and kind of shares which may be
purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be so purchased as of March 17, 2000. As provided in the Rights Agreement,
the Purchase Price and the number and kind of shares which may be purchased upon
the exercise of each Right evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate is subject to all 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
reference to the Rights Agreement is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number and kind of shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price (in cash or Common Shares or other securities of the
Company deemed by the Board of Directors to be at least equivalent in value) of
$.01 per Right (which amount shall be subject to adjustment as
3
provided in the Rights Agreement) at any time prior to the earlier of (i) such
time as a Person becomes an Acquiring Person and (ii) the Expiration Date.
The Company may, but shall not be required to, issue fractions of
Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash payment
as provided in the Rights Agreement for fractions of a share other than one
one-thousandth (1/1,000th) of a share or any integral multiple thereof or to
issue certificates or utilize a depository arrangement as provided in the terms
of the Rights Agreement and the Preferred Shares.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company, including, without limitation,
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been exercised as
provided in accordance with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been counter signed by an authorized signatory of
the Rights Agent.
4
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of:
OFFICEMAX, INC.,
by
-------------------------------
Name:
Title:
Attest:
- -------------------------
Name:
Title:
Date of countersignature:
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent,
by
---------------------
Authorized Signatory
5
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Preferred Shares (or other
securities) issuable upon the exercise of such Rights and requests that
certificates for such shares (or other securities) be issued in the name of:
Please insert social security or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
6
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to: Please insert social
security or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated: ,
----------- ----
---------------------------------
Signature
Signature Guaranteed:
7
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells,
assigns and transfer unto
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
- --------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to
transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: ,
---------- ----
---------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf of
a Person who is or was an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), (2) this Rights Certificate
is not being sold, assigned or transferred to or on behalf of any such Acquiring
Person, Affiliate or Associate and (3) after inquiry and to the best knowledge
of the undersigned, the undersigned did not acquire the Rights evidenced by this
Right Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
---------------------------------
Signature
8
NOTICE
The signature on the foregoing Form of Election to Purchase or Form of
Assignment must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT C
RIGHTS BENEFICIALLY OWNED BY ANY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND
NONTRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A PARTICIPATING CUMULATIVE SERIAL PREFERRED SHARES
OF OFFICEMAX, INC.
On March 17, 2000, the Board of Directors of OfficeMax, Inc. (the
"Company") declared a dividend of one Right for each outstanding Common Share,
without par value, of the Company (the "Common Shares"). The Rights will be
issued to the holders of record of Common Shares outstanding at the close of
business on March 17, 2000 (the "Record Date") and with respect to Common Shares
issued thereafter until the Distribution Date (as defined below). Each Right,
when it becomes exercisable as described below, will entitle the registered
holder to purchase from the Company one one- thousandth (1/1,000th) of a share
of the Series A Participating Cumulative Serial Preferred Shares, without par
value, of the Company (the "Preferred Shares") at a price of $30.00 (the
"Purchase Price"). The description and terms of the Rights are set forth in a
Rights Agreement dated as of March 17, 2000 as it may be amended from time to
time (the "Rights Agreement"), between the Company and First Chicago Trust
Company of New York, as Rights Agent (the "Rights Agent").
2
Until the earlier of (i) such time as the Company learns that a person
or group (including any affiliate or associate of such person or group) has
acquired, or obtained the right to acquire, beneficial ownership of more than
15.0% of the outstanding Common Shares (such person or group being called an
"Acquiring Person") and (ii) such date, if any, as may be designated by the
Board of Directors of the Company following the commencement of, or first public
disclosure of an intention to commence, a tender or exchange offer for
outstanding Common Shares which could result in such person or group becoming
the beneficial owner of more than 15.0% of the outstanding Common Shares, (the
earlier of such dates being called the "Distribution Date"), the Rights will be
evidenced by certificates for Common Shares registered in the names of the
holders thereof (which certificates for Common Shares shall also be deemed to be
Right Certificates (as defined below)) and not by separate Right Certificates.
With respect to any certificate for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates along
with a copy of this Summary of Rights, and the surrender for transfer of any
such certificate shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
3
Therefore, until the Distribution Date, the Rights will be transferred with and
only with the Common Shares.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire on March 17, 2010 (the "Expiration Date"), unless earlier redeemed or
exchanged by the Company as described below.
The number of Preferred Shares or other securities issuable upon
exercise of the Rights is subject to adjustment by the Board of Directors of the
Company in the event of any change in the Common Shares or Preferred Shares,
whether by reason of stock dividends, stock splits, recapitalizations,
reclassifications, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of assets, evidences of
indebtedness or subscription rights, options or warrants to holders of
4
Common Shares or Preferred Shares or otherwise. The Purchase Price and the
number of Preferred Shares or other securities issuable upon exercise of the
Rights are subject to adjustment from time to time in the event of the
declaration of a stock dividend on the Common Shares payable in Common Shares or
a subdivision or combination of the Common Shares prior to the Distribution
Date.
The Preferred Shares are authorized to be issued in fractions which
are an integral multiple of one one- thousandth (1/1,000th) of a Preferred
Share. The Company may, but is not required to, issue fractions of shares upon
the exercise of Rights, and in lieu of fractional shares, the Company may make a
cash payment based on the market price of such shares on the first trading date
prior to the date of exercise or utilize a depositary arrangement as provided by
the terms of the Preferred Shares.
Subject to the right of the Board of Directors of the Company to
redeem or exchange the Rights as described below, at such time as there is an
Acquiring Person, the holder of each Right will thereafter have the right to
receive, upon exercise thereof for the Purchase Price, that number of Common
Shares equal to the number of Common Shares which at the time of such
transaction would have a market value of twice the Purchase Price. To the extent
that
5
thereafter at the time of exercise of any Right there are not sufficient Common
Shares issued but not outstanding or authorized but unissued (counting as issued
any Common Shares reserved for issuance upon the exercise of any options to
purchase Common Shares granted before or after the date of the Rights Agreement
and counting as authorized but unissued any Common Shares held by the Company as
treasury shares) to permit such exercise, the holder of each Right will have the
right to receive, in lieu of Common Shares, upon exercise of such Right for the
Purchase Price, the same number of one one-thousandths (1/1,000ths) of a
Preferred Share as the number of Common Shares that such holder would otherwise
have been entitled to receive upon the exercise of such Right. Any Rights that
are or were beneficially owned by an Acquiring Person on or after the
Distribution Date will become null and void and will not be subject to the
"flip-in" provision.
In the event the Company is acquired in a merger or other business
combination by an Acquiring Person that is a publicly traded corporation or 50%
or more of the Company's assets or assets representing 50% or more of the
Company's earning power are sold, leased, exchanged or otherwise transferred (in
one or more transactions) to an Acquiring Person that is a publicly traded
corporation, proper provision must be made so that each Right will
6
entitle its holder to purchase, for the Purchase Price, that number of common
shares of such corporation which at the time of the transaction would have a
market value of twice the Purchase Price. In the event the Company is acquired
in a merger or other business combination by an Acquiring Person that is not a
publicly traded entity or 50% or more of the Company's assets or assets
representing 50% or more of the earning power of the Company are sold, leased,
exchanged or otherwise transferred (in one or more transactions) to an Acquiring
Person that is not a publicly traded entity, proper provision must be made so
that each Right will entitle its holder to purchase, for the Purchase Price, at
such holder's option, (i) that number of shares of the surviving corporation in
the transaction with such entity (or, at such holder's option, of the surviving
corporation in such acquisition, which could be the Company) which at the time
of the transaction would have a book value of twice the Purchase Price or (ii)
that number of shares of such entity which at the time of the transaction would
have a book value of twice the Purchase Price or (iii) if such entity has an
affiliate which has publicly traded common shares, that number of common shares
of such affiliate which at the time of the transaction would have a market value
of twice the Purchase Price. The "flip-over" provision only applies to a merger
or similar business combination with an Acquiring Person.
7
ANY RIGHTS THAT ARE OR WERE, AT ANY TIME ON OR AFTER THE DATE AN
ACQUIRING PERSON BECOMES SUCH, BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (OR A TRANSFEREE THEREOF) WILL
BECOME NULL AND VOID AND ANY HOLDER OF ANY SUCH RIGHT (INCLUDING ANY SUBSEQUENT
HOLDER) WILL BE UNABLE TO EXERCISE ANY SUCH RIGHT.
The Rights are redeemable by the Board of Directors at a redemption
price of $.01 per Right (the "Redemption Price") any time prior to the earlier
of (i) such time as there is an Acquiring Person and (ii) the Expiration Date.
Immediately upon the action of the Board electing to redeem the Rights, and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
After there is an Acquiring Person the Board of Directors may elect to
exchange each Right (other than Rights owned by an Acquiring Person) for
consideration per Right consisting of one-half of the securities that would be
issuable at such time upon the exercise of one Right pursuant to the terms of
the Rights Agreement. Notwithstanding the foregoing, the Board of Directors of
the Company shall not be empowered to effect such exchange at
8
any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary, or any
entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
At any time prior to such time as there shall be an Acquiring Person,
the Company may, without the approval of any holder of the Rights, supplement or
amend any provision of the Rights Agreement (including the date on which the
Expiration Date or the Distribution Date shall occur, the amount of the Purchase
Price or the definition of "Acquiring Person"), except that no supplement or
amendment shall be made that reduces the Redemption Price of the Rights.
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.
A copy of the Rights Agreement, including the terms of the Preferred
Shares, will be filed with the Securities and Exchange Commission as an Exhibit
to a
9
Registration Statement on Form 8-A. A copy of the Rights Agreement is available
free of charge from the Company upon written request. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is incorporated herein by reference.