SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOOTSTAR, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-3439443
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
933 MacArthur Boulevard
Mahwah, New Jersey 07430
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class to be so registered each class is to be registered
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Preferred Stock Purchase Rights New York Stock Exchange
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check the
following box. [ ]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Item 1. Description of Securities to be Registered.
On May 31, 2002, Footstar, Inc. (the "Corporation") entered into Amendment
No. 1 (the "Amendment No. 1") to its Rights Agreement, dated as of March 8, 1999
(as so amended, the "Rights Agreement"), between the Corporation and Mellon
Investor Services LLC, a New Jersey limited liability company (formerly
ChaseMellon Shareholder Services, L.L.C.), as Rights Agent (the "Rights Agent"),
pursuant to which the terms of the outstanding preferred share purchase rights
(the "Rights") were amended. This amended Form 8-A is being re-filed on June 14,
2002 to correct for previously omitted signatures. The summary below describes
the Rights as so amended by Amendment No. 1.
On March 8, 1999, the Board of Directors of the Corporation declared a
dividend distribution of one Right for each outstanding share of Common Stock,
par value $.01 per share (the "Common Shares"), of the Corporation. The dividend
was payable to the shareholders of record on March 19, 1999 (the "Record Date"),
and with respect to Common Shares issued thereafter until the Distribution Date
(as defined below) and, in certain circumstances, with respect to Common Shares
issued after the Distribution Date. Except as set forth below, each Right, when
it becomes exercisable, entitles the registered holder to purchase from the
Corporation one one-thousandth of a share of Series A Junior Participating
Preferred Stock, $.01 par value per share (the "Preferred Shares"), of the
Corporation at a price of $100 per one one-thousandth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earlier to
occur of: (i) a person or group of affiliated or associated persons (an
"Acquiring Person") having acquired Beneficial Ownership (as defined in the
Rights Agreement) of 15% or more of the outstanding Common Shares (except
pursuant to a Permitted Offer (as defined in the Rights Agreement) or a
Qualifying Offer as hereinafter defined); or (ii) 10 days (or such later date as
the Board of Directors of the Corporation may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would result in a person or group
becoming an Acquiring Person (the earlier of such dates being called the
"Distribution Date"), provided that an Acquiring Person does not include a
Grandfathered Shareholder or a Grandfathered Transferee (as such terms are
defined in the Rights Agreement). The date that a person or group becomes an
Acquiring Person is the "Shares Acquisition Date."
A "Qualifying Offer" is an offer for all the outstanding Common Shares of
the Corporation which generally meets the following requirements: (i) the
consideration offered must be the same for all shareholders; (ii) to the extent
the consideration includes cash, the Corporation must receive an opinion from a
nationally recognized investment bank designated by the Corporation that the
offeror has the ability to finance the offer; (iii) upon consummation of the
offer, the offeror must own a majority of the outstanding Common Shares of the
Corporation; (iv) the per share consideration being offered is no less than the
highest amount of consideration paid for any Common Shares purchased by the
offeror within the two years prior to the offer; (v) the offer must remain open
for at least 60 business days; (vi) such offer is accompanied by a written
opinion, in customary form, of a nationally recognized investment banking firm
designated by the Corporation, stating that the price to be paid to holders of
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Common Shares pursuant to the offer is fair from a financial point of view to
such holders (a "Fairness Opinion"); provided, however, that no such Fairness
Opinion shall be required to be delivered if the consideration per share being
offered pursuant to such offer is at least 35% above the higher of: (a) the
average regular way closing price of the Common Shares for the 90 calendar days
prior to the date on which such offer is announced; and (b) the average regular
way closing price of the Common Shares for the 10 Trading Days prior to the date
on which such offer is announced; and (vii) before the date the offer is
commenced, the offeror must make an irrevocable written commitment to the
Corporation that (A) following completion of the offer, the offeror will acquire
all shares not purchased in the offer at the same price per share as that paid
in the offer, (B) the offeror will not make any amendment to the terms of the
offer that reduces the offer price, changes the form of consideration offered,
reduces the number of shares sought, or otherwise is not in the interest of the
Corporation's shareholders, and (C) the offeror will not make any offer for any
equity securities of the Corporation for six months after the original offer is
commenced if the original offer is not successful, unless an offer by another
party is commenced either for a higher per share price or with the approval of
the Board of Directors of the Corporation, in either of which case a new offer
by the initial offeror must be at a per share price at least equal to that
provided for in the alternative offer.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with, and only with, the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights) new Common
Share certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of the
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights (the "Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution Date
(and to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 8, 2009, unless earlier redeemed by the
Corporation as described below.
In the event that any person becomes an Acquiring Person or an affiliate or
associate thereof (except pursuant to a Permitted Offer or a Qualifying Offer,
each holder of a Right will thereafter have the right (the "Flip-In Right") to
receive upon exercise the number of Common Shares or, in the discretion of the
Board of Directors of the Corporation, one one-thousandth of a Preferred Share
(or, in certain circumstances, other securities of the Corporation) having a
value (immediately prior to such triggering event) equal to two times the
exercise price of the Right. Notwithstanding the foregoing, following the
occurrence of the event described above, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, Beneficially Owned by any
Acquiring Person or any affiliate or associate thereof will be null and void.
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In the event that, at any time following the Shares Acquisition Date, (i)
the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, in either case
with or to an Acquiring Person or any affiliate or associate or any other person
in which such Acquiring Person, affiliate or associate has an interest or any
person acting on behalf of or in concert with such Acquiring Person, affiliate
or associate, or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the
right (the "Flip-Over Right") to receive, upon exercise, common shares of the
acquiring company (or in certain circumstances, its parent) having a value equal
to two times the exercise price of the Right. The holder of a Right will
continue to have the Flip-Over Right whether or not such holder exercises or
surrenders the Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-thousandth of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be entitled
to an aggregate dividend per share of 1,000 times the dividend declared per
Common Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $1,000 per
share, provided that the holders will be entitled to an aggregate payment per
share of at least 1,000 times the aggregate payment made per Common Share. These
rights are protected by customary antidilution provisions. In the event that the
dividends on the Preferred Shares are in arrears in an amount equal to six
quarterly dividend payments, the holders of the Preferred Shares shall have the
right, voting as a class, to elect two directors in addition to the directors
elected by the holders of the Common Shares until all cumulative dividends on
the Preferred Shares have been paid through the last quarterly dividend payment
date and dividends for the current dividend period declared and set apart.
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With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share, which may, at the election of the
Corporation, be evidenced by depositary receipts), and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"), which redemption shall
generally be effective upon the action of the Board of Directors of the
Corporation. Additionally, following the Shares Acquisition Date, the
Corporation may redeem the then outstanding Rights in whole, but not in part, at
the Redemption Price, provided that such redemption is in connection with a
merger or other business combination transaction or series of transactions
involving the Corporation in which all holders of Common Shares are treated
alike but not involving an Acquiring Person or its affiliates or associates.
All the provisions of the Rights Agreement, except those which concern the
rights, duties or obligations of the Rights Agent, may be amended by the Board
of Directors of the Corporation prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation in order to cure any ambiguity, defect or
inconsistency, to shorten or lengthen any time period under the Rights Agreement
(subject to certain limitations), or to make changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), as long as such amendments do not change the rights, duties
or obligations of the Rights Agent.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to shareholders of the Corporation, shareholders may, depending
upon the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.
Attached hereto as Exhibits 1 and 2 and incorporated by reference are
copies of the Rights Agreement (including Amendment No. 1 thereto) between the
Corporation and Mellon Investor Services LLC, a New Jersey limited liability
company (formerly ChaseMellon Shareholder Services, L.L.C.), specifying the
terms of the Rights, and the exhibits thereto, as follows: Exhibit A --
Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of Footstar, Inc.; Exhibit B -- Form of Right
Certificate; and Exhibit C -- Summary of Rights to Purchase Preferred Shares.
The foregoing description of the Rights is qualified by reference to the Rights
Agreement and the exhibits thereto.
Item 2. Exhibits.
1. Rights Agreement (the "Rights Agreement"), dated as of March 8, 1999,
between Footstar, Inc. and ChaseMellon Shareholder Services, L.L.C., which
includes, as Exhibit A thereto, the Certificate of Designation, Preferences and
Rights of Series A Junior
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Participating Preferred Stock of Footstar, Inc., as Exhibit B thereto, the Form
of Right Certificate, and as Exhibit C thereto, the Summary of Rights to
Purchase Preferred Shares. (1)
2. Amendment No. 1 to the Rights Agreement, dated as of May 31, 2002,
between Footstar, Inc. and Mellon Investor Services LLC, a New Jersey limited
liability company (formerly ChaseMellon Shareholder Services, L.L.C.), which
includes as Exhibit C thereto, the modified and amended Summary of Rights to
Purchase Preferred Shares.
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(1) Filed as an Exhibit to the Corporation's Form 8-A dated March 9, 1999.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
FOOTSTAR, INC.
By: MAUREEN RICHARDS
------------------------------
Name: Maureen Richards
Title: Senior Vice President
and General Counsel
Date: May 31, 2002
7
EXHIBIT INDEX
Exhibit Description Page
------- ----------- ----
1 Rights Agreement (the "Rights Agreement"), dated as of March 8,
1999, between Footstar, Inc. and ChaseMellon Shareholder
Services, L.L.C., which includes, as Exhibit A thereto, the
Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock of Footstar, Inc., as
Exhibit B thereto, the Form of Right Certificate, and as Exhibit
C thereto, the Summary of Rights to Purchase Preferred Shares.
2 Amendment No. 1 to the Rights Agreement, dated as of May 31,
2002, between Footstar, Inc. and Mellon Investor Services LLC, a
New Jersey limited liability company (formerly ChaseMellon
Shareholder Services, L.L.C.), which includes as Exhibit C
thereto, the modified and amended Summary of Rights to Purchase
Preferred Shares.
---------------
(1) Filed as an Exhibit to the Corporation's Form 8-A dated March 9, 1999.
8
AMENDMENT NO. 1 TO THE
RIGHTS AGREEMENT
This Amendment No. 1 (this "Amendment"), dated as of May 31, 2002, to the
Rights Agreement, dated as of March 8, 1999 (the "Rights Agreement"), between
Footstar, Inc., a Delaware corporation (the "Corporation"), and Mellon Investor
Services LLC, a New Jersey limited liability company (formerly ChaseMellon
Shareholder Services, L.L.C.), as Rights Agent (the "Rights Agent").
The Corporation and the Rights Agent have heretofore executed and entered
into the Rights Agreement. Pursuant to Section 27 of the Rights Agreement, the
Corporation and the Rights Agent may from time to time supplement or amend the
Rights Agreement in accordance with the provisions of Section 27 thereof and the
Corporation desires and directs the Rights Agent to so amend the Rights
Agreement. All acts and things necessary to make this Amendment a valid
agreement according to its terms have been done and performed, and the execution
and delivery of this Amendment by the Corporation has been in all respects
authorized by the Corporation.
In consideration of the foregoing premises and mutual agreements set forth
in the Rights Agreement and this Amendment, the parties hereto agree as follows:
1. The definition of a "Qualifying Offer" is hereby modified and amended to
replace clause (vi) in its entirety with the following:
"(vi) such offer is accompanied by a written opinion, in customary
form, of a nationally recognized investment banking firm designated by the
Corporation, stating that the price to be paid to holders of common Shares
pursuant to the offer is fair from a financial point of view to such
holders (a "Fairness Opinion"); provided, however, that no such Fairness
Opinion shall be required to be delivered if the consideration per share
being offered pursuant to such offer is at least 35% above the higher of:
(a) the average regular way closing price of the Common Shares for the 90
calendar days prior to the date on which such offer is announced; and (b)
the average regular way closing price of the Common Shares for the 10
Trading Days prior to the date on which such offer is announced; and"
2. The following definition of "Trading Day" is hereby inserted in Section
1 in its proper alphabetical order:
"'Trading Day' shall mean a day on which the principal national securities
exchange on which the Common Shares are listed or admitted to trading is
open for the transaction of business or, if the Common Shares are not
listed or admitted to trading on any national securities exchange, a
Business Day."
3. Exhibit C to the Rights Agreement is hereby modified and amended to read
in its entirety as set forth in Exhibit C to this Amendment.
4. Except as expressly amended hereby, the Rights Agreement remains in full
force and effect in accordance with its terms.
5. This Amendment shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts to be made and performed
entirely within such State; except that all provisions regarding the rights,
duties and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.
6. This Amendment may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed an original, and all such
counterparts shall together constitute but one and the same instrument.
7. Except as expressly set forth herein, this Amendment shall not by
implication or otherwise alter, modify, amend or in any way affect any of the
terms, conditions, obligations, covenants or agreements contained in the Rights
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect.
8. Capitalized terms used herein but not defined shall have the meanings
given to them in the Rights Agreement.
[remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Rights Agreement to be duly executed as of the day and year first above written.
FOOTSTAR, INC.
By: J.M. ROBINSON
--------------------------------
Name: J.M. Robinson
Title: Chairman, President & CEO
MELLON INVESTOR SERVICES LLC,
as Rights Agent
By: ROBERT KAVANAGH
---------------------------------
Name: Robert Kavanagh
Title: Vice President
CERTIFICATION
The undersigned, Senior Vice President of Footstar, Inc., a Delaware
corporation (the "Corporation") hereby certifies, on behalf of the Corporation,
that Amendment No. 1, dated as of May 31, 2002, to the Rights Agreement, dated
as of March 8, 1999 (the "Rights Agreement"), between the Corporation and Mellon
Investor Services LLC, a New Jersey limited liability company (formerly
ChaseMellon Shareholder Services, L.L.C.), as Rights Agent, is in compliance
with the terms of Section 27 of the Rights Agreement.
Dated: May 31, 2002
FOOTSTAR, INC.
By: MAUREEN RICHARDS
------------------------------
- Name: Maureen Richards
Title: Senior Vice President
3
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 31, 2002, Footstar, Inc. (the "Corporation") entered into Amendment
No. 1 (the "Amendment No. 1") to its Rights Agreement, dated as of March 8, 1999
(as so amended, the "Rights Agreement"), between the Corporation and Mellon
Investor Services LLC, a New Jersey limited liability company (formerly
ChaseMellon Shareholder Services, L.L.C.), as Rights Agent (the "Rights Agent"),
pursuant to which the terms of the outstanding preferred share purchase rights
(the "Rights") were amended. The summary below describes the Rights as so
amended by Amendment No. 1.
On March 8, 1999, the Board of Directors of the Corporation declared a
dividend distribution of one Right for each outstanding share of Common Stock,
par value $.01 per share (the "Common Shares"), of the Corporation. The dividend
was payable to the shareholders of record on March 19, 1999 (the "Record Date"),
and with respect to Common Shares issued thereafter until the Distribution Date
(as defined below) and, in certain circumstances, with respect to Common Shares
issued after the Distribution Date. Except as set forth below, each Right, when
it becomes exercisable, entitles the registered holder to purchase from the
Corporation one one-thousandth of a share of Series A Junior Participating
Preferred Stock, $.01 par value per share (the "Preferred Shares"), of the
Corporation at a price of $100 per one one-thousandth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earlier to
occur of: (i) a person or group of affiliated or associated persons (an
"Acquiring Person") having acquired Beneficial Ownership (as defined in the
Rights Agreement) of 15% or more of the outstanding Common Shares (except
pursuant to a Permitted Offer (as defined in the Rights Agreement) or a
Qualifying Offer as hereinafter defined); or (ii) 10 days (or such later date as
the Board of Directors of the Corporation may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would result in a person or group
becoming an Acquiring Person (the earlier of such dates being called the
"Distribution Date"), provided that an Acquiring Person does not include a
Grandfathered Shareholder or a Grandfathered Transferee (as such terms are
defined in the Rights Agreement). The date that a person or group becomes an
Acquiring Person is the "Shares Acquisition Date."
A "Qualifying Offer" is an offer for all the outstanding Common Shares of
the Corporation which generally meets the following requirements: (i) the
consideration offered must be the same for all shareholders; (ii) to the extent
the consideration includes cash, the Corporation must receive an opinion from a
nationally recognized investment bank designated by the Corporation that the
offeror has the ability to finance the offer; (iii) upon consummation of the
offer, the offeror must own a majority of the outstanding Common Shares of the
Corporation; (iv) the per share consideration being offered is no less than the
highest amount of consideration paid for any Common Shares purchased by the
offeror within the two years prior
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to the offer; (v) the offer must remain open for at least 60 business days; (vi)
such offer is accompanied by a written opinion, in customary form, of a
nationally recognized investment banking firm designated by the Corporation,
stating that the price to be paid to holders of Common Shares pursuant to the
offer is fair from a financial point of view to such holders (a "Fairness
Opinion"); provided, however, that no such Fairness Opinion shall be required to
be delivered if the consideration per share being offered pursuant to such offer
is at least 35% above the higher of: (a) the average regular way closing price
of the Common Shares for the 90 calendar days prior to the date on which such
offer is announced; and (b) the average regular way closing price of the Common
Shares for the 10 Trading Days prior to the date on which such offer is
announced; and (vii) before the date the offer is commenced, the offeror must
make an irrevocable written commitment to the Corporation that (A) following
completion of the offer, the offeror will acquire all shares not purchased in
the offer at the same price per share as that paid in the offer, (B) the offeror
will not make any amendment to the terms of the offer that reduces the offer
price, changes the form of consideration offered, reduces the number of shares
sought, or otherwise is not in the interest of the Corporation's shareholders,
and (C) the offeror will not make any offer for any equity securities of the
Corporation for six months after the original offer is commenced if the original
offer is not successful, unless an offer by another party is commenced either
for a higher per share price or with the approval of the Board of Directors of
the Corporation, in either of which case a new offer by the initial offeror must
be at a per share price at least equal to that provided for in the alternative
offer.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with, and only with, the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights) new Common
Share certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such notation or a copy of the
Summary of Rights being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights (the "Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution Date
(and to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on March 8, 2009, unless earlier redeemed by the
Corporation as described below.
In the event that any person becomes an Acquiring Person or an affiliate or
associate thereof (except pursuant to a Permitted Offer or a Qualifying Offer,
each holder of a Right will thereafter have the right (the "Flip-In Right") to
receive upon exercise the number of Common Shares or, in the discretion of the
Board of Directors of the Corporation, one one-thousandth of a Preferred Share
(or, in certain circumstances, other securities of the Corporation) having a
value (immediately prior to such triggering event) equal to two times the
exercise price of the Right. Notwithstanding the foregoing, following the
occurrence of the event described above, all Rights that are, or (under certain
circumstances specified in the Rights Agreement)
C-2
were, Beneficially Owned by any Acquiring Person or any affiliate or associate
thereof will be null and void.
In the event that, at any time following the Shares Acquisition Date, (i)
the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, in either case
with or to an Acquiring Person or any affiliate or associate or any other person
in which such Acquiring Person, affiliate or associate has an interest or any
person acting on behalf of or in concert with such Acquiring Person, affiliate
or associate, or, if in such transaction all holders of Common Shares are not
treated alike, any other person, then each holder of a Right (except Rights
which previously have been voided as set forth above) shall thereafter have the
right (the "Flip-Over Right") to receive, upon exercise, common shares of the
acquiring company (or in certain circumstances, its parent) having a value equal
to two times the exercise price of the Right. The holder of a Right will
continue to have the Flip-Over Right whether or not such holder exercises or
surrenders the Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-thousandth of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be entitled
to an aggregate dividend per share of 1,000 times the dividend declared per
Common Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $1,000 per
share, provided that the holders will be entitled to an aggregate payment per
share of at least 1,000 times the aggregate payment made per Common Share. These
rights are protected by customary antidilution provisions. In the event that the
dividends on the Preferred Shares are in arrears in an amount equal to six
quarterly dividend payments, the holders of the Preferred Shares shall have the
right, voting as a class, to elect two directors in addition to the directors
elected by the holders of the Common Shares until all cumulative dividends on
the Preferred Shares have been paid through the last quarterly dividend payment
date and dividends for the current dividend period declared and set apart.
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With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share, which may, at the election of the
Corporation, be evidenced by depositary receipts), and in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price"), which redemption shall
generally be effective upon the action of the Board of Directors of the
Corporation. Additionally, following the Shares Acquisition Date, the
Corporation may redeem the then outstanding Rights in whole, but not in part, at
the Redemption Price, provided that such redemption is in connection with a
merger or other business combination transaction or series of transactions
involving the Corporation in which all holders of Common Shares are treated
alike but not involving an Acquiring Person or its affiliates or associates.
All the provisions of the Rights Agreement, except those which concern the
rights, duties or obligations of the Rights Agent, may be amended by the Board
of Directors of the Corporation prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board of Directors of the Corporation in order to cure any ambiguity, defect or
inconsistency, to shorten or lengthen any time period under the Rights Agreement
(subject to certain limitations), or to make changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), as long as such amendments do not change the rights, duties
or obligations of the Rights Agent.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to shareholders of the Corporation, shareholders may, depending
upon the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
March 9, 1999. A copy of Amendment No. 1 has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A/A
dated June 14, 2002. Copies of the Rights Agreement and Amendment No. 1 are
available free of charge from the Corporation. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement and Amendment No. 1, which are hereby
incorporated herein by reference.
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