\n Existing Holder 1.1
\n Expiration Date 7.1
\n Final Expiration Date 7.1
\n Nasdaq 9
\n Original Rights 1.3
\n Principal Party 13.2
\n Purchase Price 4
\n Record Date Recitals
\n Redemption Date 7.1
\n Redemption Price 23.1
\n Right Recitals
\n Right Certificate 3.1
\n Rights Agent Recitals
\n Security 11.4
\n Spread 11.1.3
\n Substitution Period 11.1.3
\n Summary of Rights 3.2
\n Trading Day 11.4
\n<\/c><\/s><\/caption>\n<\/table>\n Section 2. Appointment of Rights Agent. The Company hereby appoints the
\nRights Agent to act as agent for the Company in accordance with the terms and
\nconditions hereof, and the Rights Agent hereby accepts such appointment. The
\nCompany may from time to time appoint such co-Rights Agents as it may deem
\nnecessary or desirable. In the event the Company appoints one or more co-Rights
\nAgents, the respective duties of the Rights Agent and any co-Rights Agent shall
\nbe as the Company shall determine. Contemporaneously with such appointment, if
\nany, the Company shall notify the Rights Agent thereof. Notwithstanding the
\nforegoing, the Rights Agent shall have no duty to supervise, and in no event
\nshall be liable for, the acts or omissions of any such co-Rights Agent.<\/p>\n
Section 3. Issuance of Right Certificates.<\/p>\n
3.1. Rights Evidenced by Share Certificates. Until the earlier of
\nthe close of business on (i) the tenth day after the Shares Acquisition Date or
\n(ii) the tenth Business Day after the date of the commencement of, or first
\npublic announcement of the intent of any Person (other than an Exempt Person) to
\ncommence, a tender or exchange offer the consummation of which would result in
\nany Person (other than an Exempt Person) becoming the Beneficial Owner of Common
\nShares aggregating 10% or more of the then outstanding Common Shares of the
\nCompany (the earlier of (i) and (ii) being herein referred to as the
\n“Distribution Date”), (x) the Rights (unless earlier expired, redeemed or
\nterminated) will be evidenced (subject to the provisions of Section 3.2) by the
\ncertificates for Common Shares registered in the names of the holders thereof
\n(which certificates for Common Shares shall also be deemed to be Right
\nCertificates) and not by separate certificates, and (y) the Rights (and the
\nright to receive certificates therefor) will be transferable only in connection
\nwith the transfer of the underlying Common Shares. The preceding sentence
\nnotwithstanding, prior to the occurrence of a Distribution Date specified as a
\nresult of an event described in clause (ii) (or such later Distribution Date as
\nthe Board of Directors of the Company may select pursuant to this sentence), the
\nBoard of Directors may postpone, one or more times, the Distribution Date which<\/p>\n
5
\n 7
\nwould occur as a result of an event described in clause (ii) beyond the date set
\nforth in such clause (ii). The Company shall promptly notify the Rights Agent in
\nwriting of any such postponement. Nothing herein shall permit such a
\npostponement of a Distribution Date after a Person becomes an Acquiring Person,
\nexcept as a result of the operation of the third sentence of Section 1.1 or as
\npermitted by Section 23.1. As soon as practicable after the Distribution Date,
\nthe Company will prepare and execute, the Rights Agent will countersign and the
\nCompany (or, if requested and provided with all necessary information, the
\nRights Agent) will send, by first-class, postage-prepaid mail, to each record
\nholder of Common Shares as of the close of business on the Distribution Date
\n(other than any Acquiring Person or any Associate or Affiliate of an Acquiring
\nPerson), at the address of such holder shown on the records of the Company, one
\nor more certificates for Rights, in substantially the form of Exhibit A hereto
\n(a “Right Certificate”), evidencing one Right (subject to adjustment as provided
\nherein) for each Common Share so held. As of the Distribution Date, the Rights
\nwill be evidenced solely by such Right Certificates.<\/p>\n
3.2. Summary of Rights. On the Record Date or as soon as
\npracticable thereafter, the Company will send or cause to be sent a copy of a
\nSummary of Rights to Purchase Common Shares, in substantially the form attached
\nhereto as Exhibit B (the “Summary of Rights”), by first-class, postage-prepaid
\nmail, to each record holder of Common Shares as of the close of business on the
\nRecord Date at the address of such holder shown on the records of the Company.
\nWith respect to certificates for Common Shares outstanding as of the close of
\nbusiness on the Record Date, until the Distribution Date (or the earlier
\nExpiration Date), the Rights will be evidenced by such certificates for Common
\nShares registered in the names of the holders thereof together with a copy of
\nthe Summary of Rights and the registered holders of the Common Shares shall also
\nbe registered holders of the associated Rights. Until the Distribution Date (or
\nthe earlier Expiration Date), the surrender for transfer of any certificate for
\nCommon Shares outstanding at the close of business on the Record Date, with or
\nwithout a copy of the Summary of Rights, shall also constitute the transfer of
\nthe Rights associated with the Common Shares represented thereby.<\/p>\n
3.3. New Certificates After Record Date. Certificates for Common
\nShares which become outstanding (whether upon issuance out of authorized but
\nunissued Common Shares or transfer or exchange of outstanding Common Shares)
\nafter the Record Date but prior to the earliest of the Distribution Date or the
\nExpiration Date, shall have impressed, printed, stamped, written or otherwise
\naffixed onto them the following legend:<\/p>\n
This certificate also evidences and entitles the holder hereof to
\n certain rights as set forth in an Agreement between Coach, Inc.
\n (the “Company”) and Mellon Investor Services LLC, as Rights
\n Agent, dated as of May 3, 2001, as the same may be amended from
\n time to time (the “Agreement”), the terms of which are hereby
\n incorporated herein by reference and a copy of which is on file
\n at the principal executive offices of the Company. Under certain
\n circumstances, as set forth in the Agreement, such Rights will be
\n evidenced by separate certificates and will no longer be
\n evidenced by this certificate. The Company will mail to the
\n holder of this certificate a copy of the Agreement without charge
\n after receipt of a written request therefor. AS DESCRIBED IN THE
\n AGREEMENT, RIGHTS<\/p>\n
6
\n 8
\n WHICH ARE OWNED BY, TRANSFERRED TO OR HAVE BEEN OWNED BY
\n ACQUIRING PERSONS OR ASSOCIATES OR AFFILIATES THEREOF (AS DEFINED
\n IN THE AGREEMENT) SHALL BECOME NULL AND VOID AND WILL NO LONGER
\n BE TRANSFERABLE.<\/p>\n
With respect to such certificates containing the foregoing legend, until the
\nDistribution Date (or the earlier Expiration Date), the Rights associated with
\nthe Common Shares represented by such certificates shall be evidenced by such
\ncertificates alone, and the surrender for transfer of any such certificates,
\nexcept as otherwise provided herein, shall also constitute the transfer of the
\nRights associated with the Common Shares represented thereby. In the event that
\nthe Company purchases or acquires any Common Shares after the Record Date but
\nprior to the Distribution Date, any Rights associated with such Common Shares
\nshall be deemed canceled and retired so that the Company shall not be entitled
\nto exercise any Rights associated with the Common Shares which are no longer
\noutstanding.<\/p>\n
Notwithstanding this Section 3.3, the omission of a legend shall
\nnot affect the enforceability of any part of this Agreement or the rights of any
\nholder of the Rights.<\/p>\n
Section 4. Form of Right Certificates. The Right Certificates (and the
\nforms of election to purchase shares, certification and assignment to be printed
\non the reverse thereof) shall be substantially the same as Exhibit A hereto and
\nmay have such marks of identification or designation and such legends, summaries
\nor endorsements printed thereon as the Company may deem appropriate (but which
\ndo not affect the rights, duties or responsibilities of the Rights Agent) and as
\nare not inconsistent with the provisions of this Agreement, or as may be
\nrequired to comply with any applicable law or with any rule or regulation made
\npursuant thereto or with any rule or regulation of any stock exchange or trading
\nsystem on which the Rights may from time to time be listed or quoted, or to
\nconform to usage. Subject to the terms and conditions hereof, the Right
\nCertificates, whenever issued, shall be dated as of the Record Date, and shall
\nshow the date of countersignature by the Rights Agent, and on their face shall
\nentitle the holders thereof to purchase such number of Common Shares as shall be
\nset forth therein at the price per Common Share set forth therein (the “Purchase
\nPrice”), but the number of such Common Shares and the Purchase Price shall be
\nsubject to adjustment as provided herein.<\/p>\n
Section 5. Countersignature and Registration. The Right Certificates
\nshall be executed on behalf of the Company by its Chairman of the Board of
\nDirectors, the Chief Executive Officer, President or any Vice President, either
\nmanually or by facsimile signature, and shall have affixed thereto the Company’s
\nseal or a facsimile thereof which shall be attested by the Secretary or any
\nAssistant Secretary, or the Treasurer or any Assistant Treasurer, of the
\nCompany, either manually or by facsimile signature. The Right Certificates shall
\nbe countersigned, either manually or by facsimile signature, by an authorized
\nsignatory of the Rights Agent, but it shall not be necessary for the same
\nsignatory to countersign all of the Right Certificates hereunder. No Right
\nCertificate shall be valid for any purpose unless so countersigned. In case any
\nofficer of the Company who shall have signed any of the Right Certificates shall
\ncease to be such officer of the Company before countersignature by the Rights
\nAgent and issuance and delivery by the Company, such Right Certificates,
\nnevertheless, may be countersigned by the Rights Agent, and issued and delivered
\nby the Company with the same force and effect as though the person who signed
\nsuch Right Certificates had not ceased to be<\/p>\n
7
\n 9
\nsuch officer of the Company; and any Right Certificate may be signed on behalf
\nof the Company by any person who, at the actual date of the execution of such
\nRight Certificate, shall be a proper officer of the Company to sign such Right
\nCertificate, although at the date of the execution of this Agreement any such
\nperson was not such an officer.<\/p>\n
Following the Distribution Date and receipt by the Rights Agent
\nof all necessary information, the Rights Agent will keep or cause to be kept, at
\nits office designated for such purpose, books for registration and transfer of
\nthe Right Certificates issued hereunder. Such books shall show the names and
\naddresses of the respective holders of the Right Certificates, the number of
\nRights evidenced on its face by each of the Right Certificates, the certificate
\nnumber of each of the Right Certificates and the date of each of the Right
\nCertificates.<\/p>\n
Section 6. Transfer, Split Up, Combination and Exchange of Right
\nCertificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
\nto the provisions of Section 11.1.2 and Section 14, at any time after the close
\nof business on the Distribution Date, and at or prior to the close of business
\non the Expiration Date, any Right Certificate or Right Certificates (other than
\nRight Certificates representing Rights that have become null and void pursuant
\nto Section 11.1.2 or that have been exchanged pursuant to Section 27) may be
\ntransferred, split up or combined or exchanged for another Right Certificate or
\nRight Certificates, entitling the registered holder to purchase a like number of
\nCommon Shares as the Right Certificate or Right Certificates surrendered then
\nentitled such holder to purchase. Any registered holder desiring to transfer,
\nsplit up or combine or exchange any Right Certificate shall make such request in
\nwriting delivered to the Rights Agent, and shall surrender, together with any
\nrequired form of assignment and certificate duly completed, the Right
\nCertificate or Right Certificates to be transferred, split up or combined or
\nexchanged at the office of the Rights Agent designated for such purpose. Neither
\nthe Rights Agent nor the Company shall be obligated to take any action
\nwhatsoever with respect to the transfer of any such surrendered Right
\nCertificate or Right Certificates until the registered holder shall have
\nproperly completed and signed the certificate contained in the form of
\nassignment on the reverse side of such Right Certificate or Right Certificates
\nand shall have provided such additional evidence of the identity of the
\nBeneficial Owner (or former Beneficial Owner) or Affiliates or Associates
\nthereof as the Company or the Rights Agent shall reasonably request. Thereupon
\nthe Rights Agent shall countersign and deliver to the person entitled thereto a
\nRight Certificate or Right Certificates, as the case may be, as so requested.
\nThe Company may require payment from the holders of Right Certificates of a sum
\nsufficient to cover any tax or governmental charge that may be imposed in
\nconnection with any transfer, split up or combination or exchange of such Right
\nCertificates. The Rights Agent shall have no duty or obligation to take any
\naction under any Section of this Agreement which requires the payment by a
\nRights holder of applicable taxes and governmental charges unless and until the
\nRights Agent is satisfied that all such taxes and\/or charges have been paid.<\/p>\n
Subject to the provisions of Section 11.1.2 , at any time after
\nthe Distribution Date and prior to the Expiration Date, upon receipt by the
\nCompany and the Rights Agent of evidence reasonably satisfactory to them of the
\nloss, theft, destruction or mutilation of a Right Certificate, and, in case of
\nloss, theft or destruction, of indemnity or security satisfactory to them, and,
\nat the Company’s or the Rights Agent’s request, reimbursement to the Company and
\nthe Rights Agent of all reasonable expenses incidental thereto, and upon
\nsurrender to the Rights Agent and cancellation of the Right Certificate if
\nmutilated, the Company will make and deliver a new<\/p>\n
8
\n 10
\nRight Certificate of like tenor to the Rights Agent for countersignature and
\ndelivery to the registered owner in lieu of the Right Certificate so lost,
\nstolen, destroyed or mutilated.<\/p>\n
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
\nRights.<\/p>\n
7.1. Exercise of Rights. Subject to Section 11.1.2 and except as
\notherwise provided herein, the registered holder of any Right Certificate may
\nexercise the Rights evidenced thereby in whole or in part at any time after the
\nDistribution Date upon surrender of the Right Certificate, with the form of
\nelection to purchase and certification on the reverse side thereof duly
\nexecuted, to the Rights Agent at the office of the Rights Agent designated for
\nsuch purpose, together with payment of the aggregate Purchase Price for each
\nCommon Share (or other securities, cash or other assets) as to which the Rights
\nare exercised, at or prior to the time (the “Expiration Date”) that is the
\nearliest of (i) the close of business on May 2, 2011 (the “Final Expiration
\nDate”), (ii) the time at which the Rights are redeemed as provided in Section 23
\n(the “Redemption Date”), (iii) the closing of any merger or other acquisition
\ntransaction involving the Company pursuant to an agreement of the type described
\nin Section 13.3, at which time the Rights are deemed terminated, or (iv) the
\ntime at which the Rights are exchanged as provided in Section 27.<\/p>\n
7.2. Purchase. The Purchase Price for each Common Share pursuant
\nto the exercise of a Right shall be initially $170.00, shall be subject to
\nadjustment from time to time as provided in Sections 11, 13 and 26 and shall be
\npayable in lawful money of the United States of America in accordance with
\nSection 7.3.<\/p>\n
7.3. Payment Procedures. Upon receipt of a Right Certificate
\nrepresenting exercisable Rights, with the form of election to purchase and
\ncertification duly executed, accompanied by payment of the aggregate Purchase
\nPrice for the total number of Common Shares to be purchased and an amount equal
\nto any applicable tax or charge required to be paid by the holder of such Right
\nCertificate in accordance with Section 9, in cash or by certified or cashier’s
\ncheck or money order payable to the order of the Company, the Rights Agent shall
\nthereupon promptly (i)(A) requisition from any transfer agent of the Common
\nShares (or make available, if the Rights Agent is the transfer agent)
\ncertificates for the number of Common Shares to be purchased and the Company
\nhereby irrevocably authorizes its transfer agent to comply with all such
\nrequests, or (B) if the Company shall have elected to deposit the total number
\nof Common Shares issuable upon exercise of the Rights hereunder with a
\ndepositary agent, requisition from the depositary agent depositary receipts
\nrepresenting interests in such number of Common Shares as are to be purchased
\n(in which case certificates for the Common Shares represented by such receipts
\nshall be deposited by the transfer agent with the depositary agent) and the
\nCompany hereby directs the depositary agent to comply with all such requests,
\n(ii) when appropriate, requisition from the Company the amount of cash to be
\npaid in lieu of the issuance of fractional shares in accordance with Section 14
\nor otherwise in accordance with Section 11.1.3, (iii) promptly after receipt of
\nsuch certificates or depositary receipts, cause the same to be delivered to or
\nupon the order of the registered holder of such Right Certificate, registered in
\nsuch name or names as may be designated by such holder and (iv) when
\nappropriate, after receipt, promptly deliver such cash to or upon the order of
\nthe registered holder of such Right Certificate. In the event that the Company
\nis obligated to issue other securities of the Company, pay cash and\/or
\ndistribute other property pursuant to Section 11.1.3, the Company<\/p>\n
9
\n 11
\nwill make all arrangements necessary so that such other securities, cash and\/or
\nother property are available for distribution by the Rights Agent, if and when
\nnecessary to comply with this Agreement.<\/p>\n
7.4. Partial Exercise. In case the registered holder of any Right
\nCertificate shall exercise less than all the Rights evidenced thereby, a new
\nRight Certificate evidencing Rights equivalent to the Rights remaining
\nunexercised shall be issued by the Rights Agent and delivered to the registered
\nholder of such Right Certificate or to his duly authorized assigns, subject to
\nthe provisions of Section 14.<\/p>\n
7.5. Full Information Concerning Ownership. Notwithstanding
\nanything in this Agreement to the contrary, neither the Rights Agent nor the
\nCompany shall be obligated to undertake any action with respect to a registered
\nholder of Rights upon the occurrence of any purported exercise as set forth in
\nthis Section 7 unless the certificate contained in the form of election to
\npurchase set forth on the reverse side of the Right Certificate surrendered for
\nsuch exercise shall have been duly and properly completed and signed by the
\nregistered holder thereof and the Company shall have been provided with such
\nadditional evidence of the identity of the Beneficial Owner (or former
\nBeneficial Owner) or Affiliates or Associates thereof as the Company or the
\nRights Agent shall reasonably request.<\/p>\n
Section 8. Cancellation and Destruction of Right Certificates. All Right
\nCertificates surrendered for the purpose of exercise, transfer, split up,
\ncombination or exchange shall, if surrendered to the Company or to any of its
\nagents, be delivered to the Rights Agent for cancellation or in canceled form,
\nor, if surrendered to the Rights Agent, shall be canceled by it, and no Right
\nCertificates shall be issued in lieu thereof except as expressly permitted by
\nany of the provisions of this Agreement. The Company shall deliver to the Rights
\nAgent for cancellation and retirement, and the Rights Agent shall so cancel and
\nretire, any other Right Certificate purchased or acquired by the Company
\notherwise than upon the exercise thereof. The Rights Agent shall deliver all
\ncanceled Right Certificates to the Company, or shall, at the written request of
\nthe Company, destroy such canceled Right Certificates, and in such case shall
\ndeliver a certificate of destruction thereof to the Company.<\/p>\n
Section 9. Reservation and Availability of Capital Stock. The Company
\ncovenants and agrees that from and after the Distribution Date it will cause to
\nbe reserved and kept available out of its authorized and unissued Common Shares
\nthe number of Common Shares (and, following the occurrence of a Trigger Event,
\nCommon Shares and\/or other securities) that will be sufficient to permit the
\nexercise in full of all outstanding Rights.<\/p>\n
So long as the Common Shares (and, following the occurrence of a
\nTrigger Event, Common Shares and\/or other securities) issuable upon the exercise
\nof Rights may be listed on any national securities exchange or traded in the
\nover-the-counter market and quoted on the National Association of Securities
\nDealers, Inc. Automated Quotation System (“Nasdaq”) (including the National
\nMarket or Small Cap Market), the Company shall use its best efforts to cause,
\nfrom and after such time as the Rights become exercisable, all shares reserved
\nfor such issuance to be listed or admitted to trading on such exchange or quoted
\non Nasdaq upon official notice of issuance upon such exercise.<\/p>\n
10
\n 12
\n The Company covenants and agrees that it will take all such
\naction as may be necessary to ensure that all Common Shares (and, following the
\noccurrence of a Trigger Event, Common Shares and\/or other securities) delivered
\nupon exercise of Rights shall, at the time of delivery of the certificates for
\nsuch shares (subject to payment of the Purchase Price), be duly and validly
\nauthorized and issued and fully paid and nonassessable shares.<\/p>\n
From and after such time as the Rights become exercisable, the
\nCompany shall use its best efforts, if then necessary to permit the issuance of
\nCommon Shares upon the exercise of Rights, to register and qualify such Common
\nShares under the Securities Act and any applicable state securities or “Blue
\nSky” laws (to the extent exemptions therefrom are not available), cause such
\nregistration statement and qualifications to become effective as soon as
\npossible after such filing and keep such registration and qualifications
\neffective until the earlier of the date as of which the Rights are no longer
\nexercisable for such securities and the Expiration Date. The Company may
\ntemporarily suspend, for a period of time not to exceed 90 days, the
\nexercisability of the Rights in order to prepare and file a registration
\nstatement under the Securities Act and permit it to become effective. Upon any
\nsuch suspension, the Company shall issue a public announcement stating that the
\nexercisability of the Rights has been temporarily suspended, as well as a public
\nannouncement at such time as the suspension is no longer in effect. The Company
\nshall promptly provide the Rights Agent with copies of such announcements.
\nNotwithstanding any provision of this Agreement to the contrary, the Rights
\nshall not be exercisable in any jurisdiction unless the requisite qualification
\nin such jurisdiction shall have been obtained and until a registration statement
\nunder the Securities Act (if required) shall have been declared effective.<\/p>\n
The Company further covenants and agrees that it will pay when
\ndue and payable any and all taxes and governmental charges which may be payable
\nin respect of the issuance or delivery of the Right Certificates or of any
\nCommon Shares (or Common Shares and\/or other securities, as the case may be)
\nupon the exercise of Rights. The Company shall not, however, be required to pay
\nany tax or charge which may be payable in respect of any transfer or delivery of
\nRight Certificates to a person other than, or the issuance or delivery of
\ncertificates for the Common Shares (or Common Shares and\/or other securities, as
\nthe case may be) in a name other than that of, the registered holder of the
\nRight Certificate evidencing Rights surrendered for exercise or to issue or
\ndeliver any certificates for Common Shares (or Common Shares and\/or other
\nsecurities, as the case may be) in a name other than that of the registered
\nholder upon the exercise of any Rights until any such tax or charge shall have
\nbeen paid (any such tax or charge being payable by the holder of such Right
\nCertificate at the time of surrender) or until it has been established to the
\nCompany’s satisfaction that no such tax or charge is due.<\/p>\n
Section 10. Common Shares Record Date. Each Person in whose name any
\ncertificate for Common Shares (or Common Shares and\/or other securities, as the
\ncase may be) is issued upon the exercise of Rights shall for all purposes be
\ndeemed to have become the holder of record of the Common Shares (or Common
\nShares and\/or other securities, as the case may be) represented thereby on, and
\nsuch certificate shall be dated, the date upon which the Right Certificate
\nevidencing such Rights was duly surrendered and payment of the Purchase Price
\n(and any applicable taxes and charges) was made; PROVIDED, HOWEVER, that if the
\ndate of such surrender and payment is a date upon which the Common Shares (or
\nCommon Shares and\/or other securities, as the case may be) transfer books of the
\nCompany are closed, such person shall<\/p>\n
11
\n 13
\nbe deemed to have become the record holder of such shares (fractional or
\notherwise) on, and such certificate shall be dated, the next succeeding Business
\nDay on which the Common Shares (or Common Shares and\/or other securities, as the
\ncase may be) transfer books of the Company are open.<\/p>\n
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
\nRights. The Purchase Price, the number of Common Shares or other securities or
\nproperty purchasable upon exercise of each Right and the number of Rights
\noutstanding are subject to adjustment from time to time as provided in this
\nSection 11.<\/p>\n
11.1. Post Execution Events.<\/p>\n
11.1.1 Corporate Dividends, Reclassifications, Etc. In the event
\nthe Company shall at any time after the date of this Agreement (A) declare and
\npay a dividend on the Common Shares payable in Common Shares, (B) subdivide the
\noutstanding Common Shares, (C) combine the outstanding Common Shares into a
\nsmaller number of Common Shares or (D) issue any shares of its capital stock in
\na reclassification of the Common Shares (including any such reclassification in
\nconnection with a consolidation or merger in which the Company is the continuing
\nor surviving corporation), except as otherwise provided in this Section 11.1,
\nthe Purchase Price in effect at the time of the record date for such dividend or
\nof the effective date of such subdivision, combination or reclassification, and
\nthe number and kind of shares of capital stock issuable on such date, shall be
\nproportionately adjusted so that the holder of any Right exercised after such
\ntime shall be entitled to receive the aggregate number and kind of shares of
\ncapital stock which, if such Right had been exercised immediately prior to such
\ndate and at a time when the Common Shares transfer books of the Company were
\nopen, he would have owned upon such exercise and been entitled to receive by
\nvirtue of such dividend, subdivision, combination or reclassification; PROVIDED,
\nHOWEVER, that in no event shall the consideration to be paid upon the exercise
\nof one Right be less than the aggregate par value of the shares of capital stock
\nof the Company issuable upon exercise of one Right. If an event occurs which
\nwould require an adjustment under both Section 11.1.1 and Section 11.1.2, the
\nadjustment provided for in this Section 11.1.1 shall be in addition to, and
\nshall be made prior to, the adjustment required pursuant to, Section 11.1.2.<\/p>\n
11.1.2 Acquiring Person Events; Triggering Events. Subject to
\nSections 23.1 and 27, in the event that a Trigger Event occurs, then, from and
\nafter the first occurrence of such event, each holder of a Right, except as
\nprovided below, shall thereafter have a right to receive, upon exercise thereof
\nat a price per Right equal to the then current Purchase Price multiplied by the
\nnumber of Common Shares for which a Right is then exercisable (without giving
\neffect to this Section 11.1.2), in accordance with the terms of this Agreement,
\nsuch number of Common Shares as shall equal the result obtained by (x)
\nmultiplying the then current Purchase Price by the number of Common Shares for
\nwhich a Right is then exercisable (without giving effect to this Section 11.1.2)
\nand (y) dividing that product by 50% of the current per share market price of
\nthe Common Shares (determined pursuant to Section 11.4) on the first of the date
\nof the occurrence of, or the date of the first public announcement of, a Trigger
\nEvent (the “Adjustment Shares”); PROVIDED that the Purchase Price and the number
\nof Adjustment Shares shall thereafter be subject to further adjustment as
\nappropriate in accordance with Section 11.6; PROVIDED, FURTHER, that nothing
\ncontained in this Section 11.1.2 shall limit or otherwise diminish the power of
\nthe Board<\/p>\n
12
\n 14
\nof Directors to postpone the Distribution Date pursuant to Section 3.1 or to
\nextend the period during which the Rights may be redeemed pursuant to Section
\n23.1. Notwithstanding the foregoing, upon the occurrence of a Trigger Event, any
\nRights that are or were acquired or beneficially owned by (1) any Acquiring
\nPerson or any Associate or Affiliate thereof, (2) a transferee of any Acquiring
\nPerson (or of any such Associate or Affiliate) who becomes a transferee after
\nthe Acquiring Person becomes such, or (3) a transferee of any Acquiring Person
\n(or of any such Associate or Affiliate) who becomes a transferee prior to or
\nconcurrently with the Acquiring Person becoming such and receives such Rights
\npursuant to either (A) a transfer (whether or not for consideration) from the
\nAcquiring Person to holders of equity interests in such Acquiring Person or to
\nany Person with whom the Acquiring Person has any continuing agreement,
\narrangement or understanding regarding the transferred Rights or (B) a transfer
\nwhich the Board of Directors of the Company has determined is part of a plan,
\narrangement or understanding which has as a primary purpose or effect avoidance
\nof this Section 11.1.2, and subsequent transferees, shall become null and void
\nwithout any further action, and any holder (whether or not such holder is an
\nAcquiring Person or an Associate or Affiliate of an Acquiring Person) of such
\nRights shall thereafter have no right to exercise such Rights under any
\nprovision of this Agreement or otherwise. From and after the Trigger Event, no
\nRight Certificate shall be issued pursuant to Section 3 or Section 6 that
\nrepresents Rights that are or have become null and void pursuant to the
\nprovisions of this paragraph, and any Right Certificate delivered to the Rights
\nAgent that represents Rights that are or have become null and void pursuant to
\nthe provisions of this paragraph shall be canceled.<\/p>\n
The Company shall notify the Rights Agent when this Section
\n11.1.2 applies and shall use all reasonable efforts to ensure that the
\nprovisions of this Section 11.1.2 are complied with, but neither the Company nor
\nthe Rights Agent shall have any liability to any holder of Right Certificates or
\nother Person as a result of the Company’s failure to make any determinations
\nwith respect to any Acquiring Person or its Affiliates, Associates or
\ntransferees hereunder.<\/p>\n
From and after the occurrence of an event specified in Section
\n13.1, any Rights that theretofore have not been exercised pursuant to this
\nSection 11.1.2 shall thereafter be exercisable only in accordance with Section
\n13 and not pursuant to this Section 11.1.2.<\/p>\n
11.1.3 Insufficient Shares. In the event that upon the occurrence
\nof a Trigger Event there shall not be sufficient Common Shares authorized but
\nunissued to permit the exercise in full of the Rights in accordance with the
\nforegoing Section 11.1.2, the Company shall take all such action as may be
\nnecessary to authorize additional Common Shares for issuance upon exercise of
\nthe Rights, PROVIDED, HOWEVER, that if the Company determines that it is unable
\nto cause the authorization of a sufficient number of additional Common Shares,
\nthen, in the event the Rights become exercisable, the Company, with respect to
\neach Right and to the extent necessary and permitted by applicable law and any
\nagreements or instruments in effect on the date hereof to which it is a party,
\nshall: (A) determine the excess of (1) the value of the Adjustment Shares
\nissuable upon the exercise of a Right (the “Current Value”), over (2) the
\nPurchase Price (such excess, the “Spread”) and (B) with respect to each Right
\n(other than Rights which have become null and void pursuant to Section 11.1.2),
\nmake adequate provision to substitute for the Adjustment Shares, upon payment of
\nthe applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
\n(3) shares of preferred stock or other equity securities of<\/p>\n
13
\n 15
\nthe Company (including, without limitation, shares, or fractions of shares, of
\npreferred stock which, by virtue of having dividend, voting and liquidation
\nrights substantially comparable to those of the Common Shares, the Board of
\nDirectors of the Company has deemed in good faith to have substantially the same
\nvalue as Common Shares) (each such share of preferred stock or fractions of
\nshares of preferred stock constituting a “common stock equivalent”)), (4) debt
\nsecurities of the Company, (5) other assets or (6) any combination of the
\nforegoing having an aggregate value equal to the Current Value, where such
\naggregate value has been determined by the Board of Directors of the Company
\nbased upon the advice of a nationally recognized investment banking firm
\nselected in good faith by the Board of Directors of the Company; PROVIDED,
\nHOWEVER, that if the Company shall not have made adequate provision to deliver
\nvalue pursuant to clause (B) above within thirty (30) days following the
\noccurrence of a Trigger Event, then the Company shall be obligated to deliver,
\nto the extent necessary and permitted by applicable law and any agreements or
\ninstruments in effect on the date hereof to which it is a party, upon the
\nsurrender for exercise of a Right and without requiring payment of the Purchase
\nPrice, Common Shares (to the extent available) and then, if necessary, cash,
\nwhich shares and\/or cash have an aggregate value equal to the Spread. If the
\nBoard of Directors of the Company shall determine in good faith that it is
\nunlikely that sufficient additional Common Shares could be authorized for
\nissuance upon exercise in full of the Rights, the thirty (30) day period set
\nforth above may be extended and re-extended to the extent necessary, but not
\nmore than ninety (90) days following the occurrence of a Trigger Event, in order
\nthat the Company may seek shareholder approval for the authorization of such
\nadditional shares (such period as may be extended, the “Substitution Period”).
\nTo the extent that the Company determines that some action need be taken
\npursuant to the second and\/or third sentences of this Section 11.1.3, the
\nCompany (x) shall provide that such action shall apply uniformly to all
\noutstanding Rights, and (y) may suspend the exercisability of the Rights until
\nthe expiration of the Substitution Period in order to seek any authorization of
\nadditional shares and\/or to decide the appropriate form of distribution to be
\nmade pursuant to such first sentence and to determine the value thereof. In the
\nevent of any such suspension, the Company shall issue a public announcement
\nstating that the exercisability of the Rights has been temporarily suspended as
\nwell as a public announcement at such time as the suspension is no longer in
\neffect and the Company shall promptly provide the Rights Agent copies of such
\nannouncements. For purposes of this Section 11.1.3, the value of a Common Share
\nshall be the current per share market price (as determined pursuant to Section
\n11.4) on the date of the occurrence of a Trigger Event and the value of any
\n“common stock equivalent” shall be deemed to have the same value as the Common
\nShares on such date. The Board of Directors of the Company may, but shall not be
\nrequired to, establish procedures to allocate the right to receive Common Shares
\nupon the exercise of the Rights among holders of Rights pursuant to this Section
\n11.1.3.<\/p>\n
11.2. Dilutive Rights Offering. In case the Company shall fix a
\nrecord date for the issuance of rights, options or warrants to all holders of
\nCommon Shares entitling them (for a period expiring within 45 calendar days
\nafter such record date) to subscribe for or purchase Common Shares (or
\nsecurities convertible into Common Shares or common stock equivalents) at a
\nprice per Common Share (or having a conversion or exercise price per Common
\nShare, if a security convertible into or exercisable for Common Shares or common
\nstock equivalents) less than the current per share market price of the Common
\nShares (as determined pursuant to Section 11.4) on such record date, the
\nPurchase Price to be in effect after such record date shall be determined by
\nmultiplying the Purchase Price in effect immediately prior to such record date<\/p>\n
14
\n 16
\nby a fraction, the numerator of which shall be the number of Common Shares or
\ncommon stock equivalents outstanding on such record date plus the number of
\nCommon Shares or common stock equivalents which the aggregate offering price of
\nthe total number of Common Shares or common stock equivalents to be offered
\n(and\/or the aggregate initial conversion price of the convertible securities so
\nto be offered) would purchase at such current per share market price and the
\ndenominator of which shall be the number of Common Shares or common stock
\nequivalents outstanding on such record date plus the number of additional Common
\nShares or common stock equivalents to be offered for subscription or purchase
\n(or into which the convertible securities so to be offered are initially
\nconvertible); PROVIDED, HOWEVER, that in no event shall the consideration to be
\npaid upon the exercise of one Right be less than the aggregate par value of the
\nshares of capital stock of the Company issuable upon exercise of one Right. In
\ncase such subscription price may be paid in a consideration part or all of which
\nshall be in a form other than cash, the value of such consideration shall be as
\ndetermined in good faith by the Board of Directors of the Company, whose
\ndetermination shall be described in a statement filed with the Rights Agent and
\nshall be binding on the Rights Agent and the holders of the Rights. Common
\nShares and\/or common stock equivalents owned by or held for the account of the
\nCompany or any Subsidiary of the Company shall not be deemed outstanding for the
\npurpose of any such computation. Such adjustments shall be made successively
\nwhenever such a record date is fixed; and in the event that such rights or
\nwarrants are not so issued, the Purchase Price shall be adjusted to be the
\nPurchase Price which would then be in effect if such record date had not been
\nfixed.<\/p>\n
11.3. Distributions. In case the Company shall fix a record date
\nfor the making of a distribution to all holders of the Common Shares (including
\nany such distribution made in connection with a consolidation or merger in which
\nthe Company is the continuing or surviving corporation) of evidences of
\nindebtedness, cash, securities or assets (other than a regular periodic cash
\ndividend at a rate not in excess of 125% of the rate of the last regular
\nperiodic cash dividend theretofore paid or, in case regular periodic cash
\ndividends have not theretofore been paid, at a rate not in excess of 50% of the
\naverage net income per share of the Company for the four quarters ended
\nimmediately prior to the payment of such dividend, or a dividend payable in
\nCommon Shares (which dividend, for purposes of this Agreement, shall be subject
\nto the provisions of Section 11.1.1(A))) or convertible securities, or
\nsubscription rights or warrants (excluding those referred to in Section 11.2),
\nthe Purchase Price to be in effect after such record date shall be determined by
\nmultiplying the Purchase Price in effect immediately prior to such record date
\nby a fraction, the numerator of which shall be the current per share market
\nprice of the Common Shares (as determined pursuant to Section 11.4) on such
\nrecord date, less the fair market value (as determined in good faith by the
\nBoard of Directors of the Company, whose determination shall be described in a
\nstatement filed with the Rights Agent) of the portion of the cash, assets,
\nsecurities or evidences of indebtedness so to be distributed or of such
\nsubscription rights or warrants applicable to one Common Share and the
\ndenominator of which shall be such current per share market price of the Common
\nShares (as determined pursuant to Section 11.4); PROVIDED, HOWEVER, that in no
\nevent shall the consideration to be paid upon the exercise of one Right be less
\nthan the aggregate par value of the shares of capital stock of the Company to be
\nissued upon exercise of one Right. Such adjustments shall be made successively
\nwhenever such a record date is fixed; and in the event that such distribution is
\nnot so made, the Purchase Price shall again be adjusted to be the Purchase Price
\nwhich would then be in effect if such record date had not been fixed.<\/p>\n
15
\n 17
\n 11.4. Current Per Share Market Value. For the purpose of any
\ncomputation hereunder, the “current per share market price” of any security (a
\n“Security” for the purpose of this Section 11.4) on any date shall be deemed to
\nbe the average of the daily closing prices per share of such Security for the
\nthirty (30) consecutive Trading Days (as such term is hereinafter defined)
\nimmediately prior to but not including such date; PROVIDED, HOWEVER, that in the
\nevent that the current per share market price of the Security is determined
\nduring any period following the announcement by the issuer of such Security of
\n(i) a dividend or distribution on such Security payable in shares of such
\nSecurity or securities convertible into such shares or (ii) any subdivision,
\ncombination or reclassification of such Security, and prior to the expiration of
\nthirty (30) Trading Days after but not including the ex-dividend date for such
\ndividend or distribution, or the record date for such subdivision, combination
\nor reclassification, then, and in each such case, the “current per share market
\nprice” shall be appropriately adjusted to reflect the current market price per
\nshare equivalent of such Security. The closing price for each day shall be the
\nlast sale price, regular way, or, in case no such sale takes place on such day,
\nthe average of the closing bid and asked prices, regular way, in either case as
\nreported in the principal consolidated transaction reporting system with respect
\nto securities listed or admitted to trading on the New York Stock Exchange or,
\nif the Security is not listed or admitted to trading on the New York Stock
\nExchange, as reported in the principal consolidated transaction reporting system
\nwith respect to securities listed on the principal national securities exchange
\non which the Security is listed or admitted to trading or, if the Security is
\nnot listed or admitted to trading on any national securities exchange, the last
\nquoted price or, if not so quoted, the average of the high bid and low asked
\nprices in the over-the-counter market, as reported by Nasdaq or such other
\nsystem then in use, or, if on any such date the Security is not quoted by any
\nsuch organization, the average of the closing bid and asked prices as furnished
\nby a professional market maker making a market in the Security selected by the
\nBoard of Directors of the Company. If on any such date no such market maker is
\nmaking a market in the Security, the fair value of the Security on such date as
\ndetermined in good faith by the Board of Directors of the Company shall be used.
\nThe term “Trading Day” shall mean a day on which the principal national
\nsecurities exchange on which the Security is listed or admitted to trading is
\nopen for the transaction of business or, if the Security is not listed or
\nadmitted to trading on any national securities exchange, a Business Day. If the
\nSecurity is not publicly held or not so listed or traded, or if on any such date
\nthe Security is not so quoted and no such market maker is making a market in the
\nSecurity, “current per share market price” shall mean the fair value per share
\nas determined in good faith by the Board of Directors of the Company or, if at
\nthe time of such determination there is an Acquiring Person and all members of
\nthe Board of Directors are Future Directors, by a nationally recognized
\ninvestment banking firm selected by the Board of Directors, which shall have the
\nduty to make such determination in a reasonable and objective manner, whose
\ndetermination shall be described in a statement filed with the Rights Agent and
\nshall be conclusive for all purposes.<\/p>\n
11.5. Insignificant Changes. No adjustment in the Purchase Price
\nshall be required unless such adjustment would require an increase or decrease
\nof at least 1% in the Purchase Price. Any adjustments which by reason of this
\nSection 11.5 are not required to be made shall be carried forward and taken into
\naccount in any subsequent adjustment. All calculations under this Section 11
\nshall be made to the nearest cent or to the nearest ten thousandth of a Common
\nShare or other share or security, as the case may be.<\/p>\n
16
\n 18
\n 11.6. Shares Other Than Common Shares. If as a result of an
\nadjustment made pursuant to Section 11.1, the holder of any Right thereafter
\nexercised shall become entitled to receive any shares of capital stock of the
\nCompany other than Common Shares, thereafter the number of such other shares so
\nreceivable upon exercise of any Right shall be subject to adjustment from time
\nto time in a manner and on terms as nearly equivalent as practicable to the
\nprovisions with respect to the Common Shares contained in Sections 11.1, 11.2,
\n11.3, 11.5, 11.8, 11.9 and 11.13, and the provisions of Sections 7, 9, 10, 13
\nand 14 with respect to the Common Shares shall apply on like terms to any such
\nother shares.<\/p>\n
11.7. Rights Issued Prior to Adjustment. All Rights originally
\nissued by the Company subsequent to any adjustment made to the Purchase Price
\nhereunder shall evidence the right to purchase, at the adjusted Purchase Price,
\nthe number of Common Shares purchasable from time to time hereunder upon
\nexercise of the Rights, all subject to further adjustment as provided herein.<\/p>\n
11.8. Effect of Adjustments. Unless the Company shall have
\nexercised its election as provided in Section 11.9, upon each adjustment of the
\nPurchase Price as a result of the calculations made in Sections 11.2 and 11.3,
\neach Right outstanding immediately prior to the making of such adjustment shall
\nthereafter evidence the right to purchase, at the adjusted Purchase Price, that
\nnumber of Common Shares (calculated to the nearest ten-thousandth) obtained by
\n(i) multiplying (x) the number of Common Shares covered by a Right immediately
\nprior to this adjustment by (y) the Purchase Price in effect immediately prior
\nto such adjustment of the Purchase Price and (ii) dividing the product so
\nobtained by the Purchase Price in effect immediately after such adjustment of
\nthe Purchase Price.<\/p>\n
11.9. Adjustment in Number of Rights. The Company may elect on or
\nafter the date of any adjustment of the Purchase Price to adjust the number of
\nRights, in substitution for any adjustment in the number Common Shares issuable
\nupon the exercise of a Right. Each of the Rights outstanding after such
\nadjustment of the number of Rights shall be exercisable for the number of Common
\nShares for which a Right was exercisable immediately prior to such adjustment.
\nEach Right held of record prior to such adjustment of the number of Rights shall
\nbecome that number of Rights (calculated to the nearest ten-thousandth) obtained
\nby dividing the Purchase Price in effect immediately prior to adjustment of the
\nPurchase Price by the Purchase Price in effect immediately after adjustment of
\nthe Purchase Price. The Company shall make a public announcement of its election
\nto adjust the number of Rights, indicating the record date for the adjustment,
\nand, if known at the time, the amount of the adjustment to be made, and shall
\npromptly give the Rights Agent a copy of such announcement. This record date may
\nbe the date on which the Purchase Price is adjusted or any day thereafter, but,
\nif the Right Certificates have been issued, shall be at least ten (10) days
\nlater than the date of the public announcement. If Right Certificates have been
\nissued, upon each adjustment of the number of Rights pursuant to this Section
\n11.9, the Company may, as promptly as practicable, cause to be distributed to
\nholders of record of Right Certificates on such record date Right Certificates
\nevidencing, subject to Section 14, the additional Rights to which such holders
\nshall be entitled as a result of such adjustment, or, at the option of the
\nCompany, shall cause to be distributed to such holders of record in substitution
\nand replacement for the Right Certificates held by such holders prior to the
\ndate of adjustment, and upon surrender thereof, if required by the Company, new
\nRight Certificates evidencing all the Rights to which such holders shall be
\nentitled after such<\/p>\n
17
\n 19
\nadjustment. Right Certificates so to be distributed shall be issued, executed
\nand countersigned in the manner provided for herein (and may bear, at the option
\nof the Company, the adjusted Purchase Price) and shall be registered in the
\nnames of the holders of record of Right Certificates on the record date
\nspecified in the public announcement.<\/p>\n
11.10. Right Certificates Unchanged. Irrespective of any
\nadjustment or change in the Purchase Price or the number of Common Shares
\nissuable upon the exercise of the Rights, the Right Certificates theretofore and
\nthereafter issued may continue to express the Purchase Price per share and the
\nnumber of Common Shares which were expressed in the initial Right Certificates
\nissued hereunder.<\/p>\n
11.11. Par Value Limitations. Before taking any action that would
\ncause an adjustment reducing the Purchase Price below the then par value, if
\nany, of the Common Shares issuable upon exercise of the Rights, the Company
\nshall take any corporate action which may, in the opinion of its counsel, be
\nnecessary in order that the Company may validly and legally issue fully paid and
\nnonassessable Common Shares at such adjusted Purchase Price.<\/p>\n
11.12. Deferred Issuance. In any case in which this Section 11
\nshall require that an adjustment in the Purchase Price be made effective as of a
\nrecord date for a specified event, the Company may elect to defer (and shall
\ngive prompt written notice of such election to the Rights Agent) until the
\noccurrence of such event the issuance to the holder of any Right exercised after
\nsuch record date of that number of Common Shares and shares of other capital
\nstock or securities of the Company, if any, issuable upon such exercise over and
\nabove the Common Shares and shares of other capital stock or other securities,
\nassets or cash of the Company, if any, issuable upon such exercise on the basis
\nof the Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER,
\nthat the Company shall deliver to such holder a due bill or other appropriate
\ninstrument evidencing such holder’s right to receive such additional shares upon
\nthe occurrence of the event requiring such adjustment.<\/p>\n
11.13. Reduction in Purchase Price. Anything in this Section 11
\nto the contrary notwithstanding, the Company shall be entitled to make such
\nreductions in the Purchase Price, in addition to those adjustments expressly
\nrequired by this Section 11, as and to the extent that it in its sole discretion
\nshall determine to be advisable in order that any consolidation or subdivision
\nof the Common Shares, issuance wholly for cash of any of the Common Shares at
\nless than the current market price, issuance wholly for cash of Common Shares or
\nsecurities which by their terms are convertible into or exchangeable for Common
\nShares, stock dividends or issuance of rights, options or warrants referred to
\nhereinabove in this Section 11, hereafter made by the Company to holders of its
\nCommon Shares shall not be taxable to such shareholders.<\/p>\n
11.14. Company Not to Diminish Benefits of Rights. The Company
\ncovenants and agrees that after the earlier of the Shares Acquisition Date or
\nDistribution Date it will not, except as permitted by Section 23, Section 26 or
\nSection 27, take (or permit any Subsidiary to take) any action if at the time
\nsuch action is taken it is reasonably foreseeable that such action will
\nsubstantially diminish or otherwise eliminate the benefits intended to be
\nafforded by the Rights.<\/p>\n
18
\n 20
\n 11.15. Adjustment of Rights Associated with Common Shares.
\nNotwithstanding anything contained in this Agreement to the contrary, in the
\nevent that the Company shall at any time after the date hereof and prior to the
\nDistribution Date (i) declare or pay any dividend on the outstanding Common
\nShares payable in Common Shares, (ii) effect a subdivision or consolidation of
\nthe outstanding Common Shares (by reclassification or otherwise than by the
\npayment of dividends payable in Common Shares), or (iii) combine the outstanding
\nCommon Shares into a greater or lesser number of Common Shares, then in any such
\ncase, the number of Rights associated with each Common Share then outstanding,
\nor issued or delivered thereafter but prior to the Distribution Date or in
\naccordance with Section 22, shall be proportionately adjusted so that the number
\nof Rights thereafter associated with each Common Share following any such event
\nshall equal the result obtained by multiplying the number of Rights associated
\nwith each Common Share immediately prior to such event by a fraction, the
\nnumerator of which shall be the total number of Common Shares outstanding
\nimmediately prior to the occurrence of the event and the denominator of which
\nshall be the total number of Common Shares outstanding immediately following the
\noccurrence of such event. The adjustments provided for in this Section 11.15
\nshall be made successively whenever such a dividend is declared or paid or such
\na subdivision, combination or consolidation is effected.<\/p>\n
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
\nWhenever an adjustment is made as provided in Sections 11 or 13, the Company
\nshall (a) promptly prepare a certificate setting forth such adjustment, and a
\nbrief statement of the computations and facts accounting for such adjustment,
\n(b) promptly file with the Rights Agent and with each transfer agent for the
\nCommon Shares a copy of such certificate and (c) mail a brief summary thereof to
\neach holder of a Right Certificate in accordance with Section 25. The Rights
\nAgent shall be fully protected in relying on any such certificate and on any
\nadjustment therein contained and shall have no duty with respect to and shall
\nnot be deemed to have knowledge of any such adjustment unless and until it shall
\nhave received such certificate.<\/p>\n
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
\nEarning Power.<\/p>\n
13.1. Certain Transactions. In the event that, from and after the
\nfirst occurrence of a Trigger Event, directly or indirectly, (A) the Company
\nshall consolidate with, or merge with and into, any other Person and the Company
\nshall not be the continuing or surviving corporation, (B) any Person shall
\nconsolidate with the Company, or merge with and into the Company and the Company
\nshall be the continuing or surviving corporation of such merger and, in
\nconnection with such merger, all or part of the Common Shares shall be changed
\ninto or exchanged for stock or other securities of the Company or any other
\nPerson or cash or any other property, or (C) the Company shall sell, exchange,
\nmortgage or otherwise transfer (or one or more of its Subsidiaries shall sell,
\nexchange, mortgage or otherwise transfer), in one or more transactions, assets
\nor earning power aggregating 50% or more of the assets or earning power of the
\nCompany and its Subsidiaries (taken as a whole) to any other Person or Persons
\n(other than the Company or one or more wholly-owned Subsidiaries of the Company
\nin one or more transactions each of which complies with Section 11.14), then,
\nand in each such case, proper provision shall be made so that (i) each holder of
\na Right (other than Rights which have become null and void pursuant to Section
\n11.1.2) shall thereafter have the right to receive, upon the exercise thereof at
\na price per Right equal to the then current Purchase Price multiplied by the
\nnumber of Common Shares for which a Right was exercisable immediately prior to
\nthe first occurrence of a Trigger Event (as<\/p>\n
19
\n 21
\nsubsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and
\n11.12), in accordance with the terms of this Agreement and in lieu of Common
\nShares, such number of validly authorized and issued, fully paid, non-assessable
\nand freely tradable Common Shares of the Principal Party (as such term is
\nhereinafter defined) not subject to any liens, encumbrances, rights of first
\nrefusal or other adverse claims, as shall be equal to the result obtained by (x)
\nmultiplying the then current Purchase Price by the number of Common Shares for
\nwhich a Right was exercisable immediately prior to the first occurrence of a
\nTrigger Event (as subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3,
\n11.8, 11.9 and 11.12) and (y) dividing that product by 50% of the then current
\nper share market price of the Common Shares of such Principal Party (determined
\npursuant to Section 11.4) on the date of consummation of such consolidation,
\nmerger, sale or transfer; PROVIDED, that the price per Right so payable and the
\nnumber of Common Shares of such Principal Party so receivable upon exercise of a
\nRight shall thereafter be subject to further adjustment as appropriate in
\naccordance with Section 11.6 to reflect any events covered thereby occurring in
\nrespect of the Common Shares of such Principal Party after the occurrence of
\nsuch consolidation, merger, sale or transfer; (ii) such Principal Party shall
\nthereafter be liable for, and shall assume, by virtue of such consolidation,
\nmerger, sale or transfer, all the obligations and duties of the Company pursuant
\nto this Agreement; (iii) the term “Company” shall thereafter be deemed to refer
\nto such Principal Party; and (iv) such Principal Party shall take such steps
\n(including, but not limited to, the reservation of a sufficient number of its
\nCommon Shares in accordance with Section 9) in connection with such consummation
\nas may be necessary to assure that the provisions hereof shall thereafter be
\napplicable, as nearly as reasonably may be, in relation to its Common Shares
\nthereafter deliverable upon the exercise of the Rights; PROVIDED that, upon the
\nsubsequent occurrence of any consolidation, merger, sale or transfer of assets
\nor other extraordinary transaction in respect of such Principal Party, each
\nholder of a Right shall thereupon be entitled to receive, upon exercise of a
\nRight and payment of the Purchase Price as provided in this Section 13.1, such
\ncash, shares, rights, warrants and other property which such holder would have
\nbeen entitled to receive had such holder, at the time of such transaction, owned
\nthe Common Shares of the Principal Party receivable upon the exercise of a Right
\npursuant to this Section 13.1, and such Principal Party shall take such steps
\n(including, but not limited to, reservation of shares of stock) as may be
\nnecessary to permit the subsequent exercise of the Rights in accordance with the
\nterms hereof for such cash, shares, rights, warrants and other property. The
\nCompany shall not consummate any such consolidation, merger, sale or transfer
\nunless prior thereto the Company and such Principal Party shall have executed
\nand delivered to the Rights Agent a supplemental agreement confirming that the
\nrequirements of this Section 13.1 and Section 13.2 shall promptly be performed
\nin accordance with their terms and that such consolidation, merger, sale or
\ntransfer of assets shall not result in a default by the Principal Party under
\nthis Agreement as the same shall have been assumed by the Principal Party
\npursuant to this Section 13.1 and Section 13.2 and providing that, as soon as
\npracticable after executing such agreement pursuant to this Section 13, the
\nPrincipal Party, at its own expense, shall<\/p>\n
(1) prepare and file a registration statement under the
\n Securities Act, if necessary, with respect to the Rights and the
\n securities purchasable upon exercise of the Rights on an appropriate
\n form, use its best efforts to cause such registration statement to
\n become effective as soon as practicable after such filing and use its
\n best efforts to cause such registration statement to remain effective
\n (with a prospectus at all times meeting the<\/p>\n
20
\n 22
\n requirements of the Securities Act) until the Expiration Date and
\n similarly comply with applicable state securities laws;<\/p>\n
(2) use its best efforts, if the Common Shares of the
\n Principal Party shall be listed or admitted to trading on the New York
\n Stock Exchange or on another national securities exchange, to list or
\n admit to trading (or continue the listing of) the Rights and the
\n securities purchasable upon exercise of the Rights on the New York Stock
\n Exchange or such securities exchange, or, if the Common Shares of the
\n Principal Party shall not be listed or admitted to trading on the New
\n York Stock Exchange or a national securities exchange, to cause the
\n Rights and the securities receivable upon exercise of the Rights to be
\n authorized for quotation on Nasdaq or on such other system then in use;<\/p>\n
(3) deliver to holders of the Rights historical financial
\n statements for the Principal Party which comply in all respects with the
\n requirements for registration on Form 10 (or any successor form) under
\n the Exchange Act; and<\/p>\n
(4) obtain waivers of any rights of first refusal or
\n preemptive rights in respect of the Common Shares of the Principal Party
\n subject to purchase upon exercise of outstanding Rights.<\/p>\n
In case the Principal Party has provision in any of its
\nauthorized securities or in its certificate of incorporation or by-laws or other
\ninstrument governing its corporate affairs, which provision would have the
\neffect of (i) causing such Principal Party to issue (other than to holders of
\nRights pursuant to this Section 13), in connection with, or as a consequence of,
\nthe consummation of a transaction referred to in this Section 13, Common Shares
\nor common stock equivalents of such Principal Party at less than the then
\ncurrent market price per share thereof (determined pursuant to Section 11.4) or
\nsecurities exercisable for, or convertible into, Common Shares or common stock
\nequivalents of such Principal Party at less than such then current market price
\n(other than to holders of Rights pursuant to this Section 13), or (ii) providing
\nfor any special payment, taxes or similar provision in connection with the
\nissuance of the Common Shares of such Principal Party pursuant to the provision
\nof Section 13, then, in such event, the Company hereby agrees with each holder
\nof Rights that it shall not consummate any such transaction unless prior thereto
\nthe Company and such Principal Party shall have executed and delivered to the
\nRights Agent a supplemental agreement providing that the provision in question
\nof such Principal Party shall have been canceled, waived or amended, or that the
\nauthorized securities shall be redeemed, so that the applicable provision will
\nhave no effect in connection with, or as a consequence of, the consummation of
\nthe proposed transaction.<\/p>\n
The Company covenants and agrees that it shall not, at any time
\nafter the Trigger Event, enter into any transaction of the type described in
\nclauses (A) through (C) of this Section 13.1 if (i) at the time of or
\nimmediately after such consolidation, merger, sale, transfer or other
\ntransaction there are any rights, warrants or other instruments or securities
\noutstanding or agreements in effect which would substantially diminish or
\notherwise eliminate the benefits intended to be afforded by the Rights, (ii)
\nprior to, simultaneously with or immediately after such consolidation, merger,
\nsale, transfer or other transaction, the shareholders of the Person who
\nconstitutes, or would constitute, the Principal Party for purposes of Section
\n13.2 shall have received a distribution of Rights previously owned by such
\nPerson or any of its Affiliates or<\/p>\n
21
\n 23
\n Associates or (iii) the form or nature of organization of the Principal
\n Party would preclude or limit the exercisability of the Rights. The
\n provisions of this Section 13 shall similarly apply to successive
\n transactions of the type described in clauses (A) through (C) of this
\n Section 13.1.<\/p>\n
13.2. Principal Party. “Principal Party” shall mean:<\/p>\n
(i) in the case of any transaction described in (A) or (B)
\nof the first sentence of Section 13.1: (i) the Person that is the issuer of the
\nsecurities into which the Common Shares are converted in such merger or
\nconsolidation, or, if there is more than one such issuer, the issuer the Common
\nShares of which have the greatest aggregate market value of shares outstanding,
\nor (ii) if no securities are so issued, (x) the Person that is the other party
\nto the merger, if such Person survives said merger, or, if there is more than
\none such Person, the Person the Common Shares of which have the greatest
\naggregate market value of shares outstanding or (y) if the Person that is the
\nother party to the merger does not survive the merger, the Person that does
\nsurvive the merger (including the Company if it survives) or (z) the Person
\nresulting from the consolidation; and<\/p>\n
(ii) in the case of any transaction described in (C) of
\nthe first sentence in Section 13.1, the Person that is the party receiving the
\ngreatest portion of the assets or earning power transferred pursuant to such
\ntransaction or transactions, or, if each Person that is a party to such
\ntransaction or transactions receives the same portion of the assets or earning
\npower so transferred or if the Person receiving the greatest portion of the
\nassets or earning power cannot be determined, whichever of such Persons is the
\nissuer of Common Shares having the greatest aggregate market value of shares
\noutstanding; PROVIDED, HOWEVER, that in any such case described in the foregoing
\nclause (i) or (ii) of this Section 13.2, if the Common Shares of such Person are
\nnot at such time or have not been continuously over the preceding 12 month
\nperiod registered under Section 12 of the Exchange Act, then (1) if such Person
\nis a direct or indirect Subsidiary of another Person the Common Shares of which
\nare and have been so registered, the term “Principal Party” shall refer to such
\nother Person, or (2) if such Person is a Subsidiary, directly or indirectly, of
\nmore than one Person, the Common Shares of all of which are and have been so
\nregistered, the term “Principal Party” shall refer to whichever of such Persons
\nis the issuer of Common Shares having the greatest aggregate market value of
\nshares outstanding, or (3) if such Person is owned, directly or indirectly, by a
\njoint venture formed by two or more Persons that are not owned, directly or
\nindirectly, by the same Person, the rules set forth in clauses (1) and (2) above
\nshall apply to each of the owners having an interest in the venture as if the
\nPerson owned by the joint venture was a Subsidiary of both or all of such joint
\nventures, and the Principal Party in each such case shall bear the obligations
\nset forth in this Section 13 in the same ratio as its interest in such Person
\nbears to the total of such interests.<\/p>\n
13.3. Approved Acquisitions. Notwithstanding anything contained
\nherein to the contrary, upon the consummation of any merger or other acquisition
\ntransaction of the type described in clause (A), (B) or (C) of Section 13.1
\ninvolving the Company pursuant to a merger or other acquisition agreement
\nbetween the Company and any Person (or one or more of such Person’s Affiliates
\nor Associates) which agreement has been approved by the Board of Directors of
\nthe Company prior to any Person becoming an Acquiring Person, this Agreement and
\nthe rights of holders of Rights hereunder shall be terminated in accordance with
\nSection 7.1.<\/p>\n
22
\n 24
\n Section 14. Fractional Rights and Fractional Shares.<\/p>\n
14.1. Cash in Lieu of Fractional Rights. The Company shall not be
\nrequired to issue fractions of Rights or to distribute Right Certificates which
\nevidence fractional Rights (except prior to the Distribution Date in accordance
\nwith Section 11.15). In lieu of such fractional Rights, there shall be paid to
\nthe registered holders of the Right Certificates with regard to which such
\nfractional Rights would otherwise be issuable an amount in cash equal to the
\nsame fraction of the current market value of a whole Right. For the purposes of
\nthis Section 14.1, the current market value of a whole Right shall be the
\nclosing price of the Rights for the Trading Day immediately prior to the date on
\nwhich such fractional Rights would have been otherwise issuable. The closing
\nprice for any day shall be the last sale price, regular way, or, in case no such
\nsale takes place on such day, the average of the closing bid and asked prices,
\nregular way, in either case as reported in the principal consolidated
\ntransaction reporting system with respect to securities listed or admitted to
\ntrading on the New York Stock Exchange or, if the Rights are not listed or
\nadmitted to trading on the New York Stock Exchange, as reported in the principal
\nconsolidated transaction reporting system with respect to securities listed on
\nthe principal national securities exchange on which the Rights are listed or
\nadmitted to trading or, if the Rights are not listed or admitted to trading on
\nany national securities exchange, the last quoted price or, if not so quoted,
\nthe average of the high bid and low asked prices in the over-the-counter market,
\nas reported by Nasdaq or such other system then in use or, if on any such date
\nthe Rights are not quoted by any such organization, the average of the closing
\nbid and asked prices as furnished by a professional market maker making a market
\nin the Rights selected by the Board of Directors of the Company. If on any such
\ndate no such market maker is making a market in the Rights, the current market
\nvalue of the Rights on such date shall be the fair value of the Rights as
\ndetermined in good faith by the Board of Directors of the Company, or, if at the
\ntime of such determination there is an Acquiring Person and all members of the
\nBoard of Directors are Future Directors, by a nationally recognized investment
\nbanking firm selected by the Board of Directors of the Company, which shall have
\nthe duty to make such determination in a reasonable and objective manner, which
\ndetermination shall be described in a statement filed with the Rights Agent and
\nshall be conclusive for all purposes.<\/p>\n
14.2. Cash In Lieu of Fractional Common Shares. The Company shall
\nnot be required to issue fractions of Common Shares or to distribute
\ncertificates which evidence fractional Common Shares upon the exercise or
\nexchange of Rights. In lieu of such fractional Common Shares, the Company shall
\npay to the registered holders of the Right Certificates with regard to which
\nsuch fractional Common Shares would otherwise be issuable an amount in cash
\nequal to the same fraction of the current market value of a whole Common Share
\n(as determined in accordance with Section 14.1) for the Trading Day immediately
\nprior to the date of such exercise or exchange.<\/p>\n
14.3. Waiver of Right to Receive Fractional Rights or Shares. The
\nholder of a Right by the acceptance of the Rights expressly waives his right to
\nreceive any fractional Rights or any fractional shares upon exercise or exchange
\nof a Right, except as permitted by this Section 14.<\/p>\n
14.4 Rights Agents Duties Regarding Fractional Shares. Whenever a
\npayment for fractional Rights or fractional shares is to be made by the Rights
\nAgent, the Company shall<\/p>\n
23
\n 25
\n(i) promptly prepare and deliver to the Rights Agent a certificate setting forth
\nin reasonable detail the facts related to such payment and the prices and\/or
\nformulas utilized in calculating such payments, and (ii) provide sufficient
\nmonies to the Rights Agent in the form of fully collected funds to make such
\npayments. The Rights Agent shall be fully protected in relying upon such a
\ncertificate and shall have no duty with respect to, and shall not be deemed to
\nhave knowledge of any payment for fractional Rights or fractional shares under
\nany Section of this Agreement relating to the payment of fractional Rights or
\nfractional shares unless and until the Rights Agent shall have received such a
\ncertificate and sufficient monies.<\/p>\n
Section 15. Rights of Action. All rights of action in respect of this
\nAgreement, except the rights of action given to the Rights Agent under Section
\n18, are vested in the respective registered holders of the Right Certificates
\n(and, prior to the Distribution Date, the registered holders of the Common
\nShares); and any registered holder of any Right Certificate (or, prior to the
\nDistribution Date, of the Common Shares), without the consent of the Rights
\nAgent or of the holder of any other Right Certificate (or, prior to the
\nDistribution Date, of the Common Shares), may, in his own behalf and for his own
\nbenefit, enforce this Agreement, and may institute and maintain any suit, action
\nor proceeding against the Company to enforce this Agreement, or otherwise
\nenforce or act in respect of his right to exercise the Rights evidenced by such
\nRight Certificate in the manner provided in such Right Certificate and in this
\nAgreement. Without limiting the foregoing or any remedies available to the
\nholders of Rights, it is specifically acknowledged that the holders of Rights
\nwould not have an adequate remedy at law for any breach of this Agreement and
\nshall be entitled to specific performance of the obligations under, and
\ninjunctive relief against actual or threatened violations of, the obligations of
\nany Person (including, without limitation, the Company) subject to this
\nAgreement.<\/p>\n
Section 16. Agreement of Right Holders. Every holder of a Right by
\naccepting the same consents and agrees with the Company and the Rights Agent and
\nwith every other holder of a Right that:<\/p>\n
(a) prior to the Distribution Date, the Rights will be
\n transferable only in connection with the transfer of the Common Shares;<\/p>\n
(b) as of and after the Distribution Date, the Right
\n Certificates are transferable only on the registry books of the Rights
\n Agent if surrendered at the office of the Rights Agent designated for
\n such purpose, duly endorsed or accompanied by a proper instrument of
\n transfer with all required certifications completed; and<\/p>\n
(c) the Company and the Rights Agent may deem and treat
\n the Person in whose name the Right Certificate (or, prior to the
\n Distribution Date, the associated Common Shares certificate) is
\n registered as the absolute owner thereof and of the Rights evidenced
\n thereby (notwithstanding any notations of ownership or writing on the
\n Right Certificates or the associated Common Shares certificate made by
\n anyone other than the Company or the Rights Agent) for all purposes
\n whatsoever, and neither the Company nor the Rights Agent shall be
\n affected by any notice to the contrary.<\/p>\n
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
\nholder, as such, of any Right Certificate shall be entitled to vote, receive
\ndividends or be deemed for any purpose<\/p>\n
24
\n 26
\nthe holder of the Common Shares or any other securities of the Company which may
\nat any time be issuable on the exercise of the Rights represented thereby, nor
\nshall anything contained herein or in any Right Certificate be construed to
\nconfer upon the holder of any Right Certificate, as such, any of the rights of a
\nshareholder of the Company or any right to vote for the election of directors or
\nupon any matter submitted to shareholders at any meeting thereof, or to give or
\nwithhold consent to any corporate action, or to receive notice of meetings or
\nother actions affecting shareholders (except as provided in Section 24), or to
\nreceive dividends or subscription rights, or otherwise, until the Right or
\nRights evidenced by such Right Certificate shall have been exercised in
\naccordance with the provisions hereof.<\/p>\n
Section 18. Concerning the Rights Agent. The Company agrees to pay to
\nthe Rights Agent reasonable compensation for all services rendered by it
\nhereunder in accordance with a fee schedule to be mutually agreed upon and, from
\ntime to time, on demand of the Rights Agent, its reasonable expenses and counsel
\nfees and disbursements and other disbursements incurred in the preparation,
\nexecution, delivery, amendment and administration of this Agreement and the
\nexercise and performance of its duties hereunder. The Company also agrees to
\nindemnify the Rights Agent for, and to hold it harmless against, any loss,
\nliability, damage, judgment, fine, penalty, claim, demand, settlement, cost or
\nexpense, incurred without gross negligence, bad faith or willful misconduct on
\nthe part of the Rights Agent (each as determined by a final, non-appealable
\norder, judgment, decree or ruling of a court of competent jurisdiction), for any
\naction taken, suffered or omitted by the Rights Agent in connection with the
\nacceptance and administration of this Agreement, including, without limitation,
\nthe costs and expenses of defending against any claim of liability arising
\ntherefrom, directly or indirectly. The costs and expenses incurred in enforcing
\nthis right of indemnification shall be paid by the Company. The provisions of
\nthis Section 18 and Section 20 below shall survive the termination of this
\nAgreement, the exercise or expiration of the Rights and the resignation or
\nremoval of the Rights Agent.<\/p>\n
The Rights Agent shall be authorized and protected and shall
\nincur no liability for or in respect of any action taken, suffered or omitted by
\nit in connection with its acceptance and administration of this Agreement in
\nreliance upon any Right Certificate or certificate for the Common Shares or the
\nCommon Shares or for other securities of the Company, instrument of assignment
\nor transfer, power of attorney, endorsement, affidavit, letter, notice,
\ninstruction, direction, consent, certificate, statement, or other paper or
\ndocument believed by it to be genuine and to be signed, executed and, where
\nnecessary, verified or acknowledged, by the proper Person or Persons. The Rights
\nAgent shall not be deemed to have knowledge of any event of which it was
\nsupposed to receive notice thereof hereunder, and the Rights Agent shall be
\nfully protected and shall incur no liability for failing to take any action in
\nconnection therewith unless and until it has received such notice in writing.<\/p>\n
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
\nAny Person into which the Rights Agent or any successor Rights Agent may be
\nmerged or with which it may be consolidated, or any Person resulting from any
\nmerger or consolidation to which the Rights Agent or any successor Rights Agent
\nshall be a party, or any Person succeeding to the corporate trust or stock
\ntransfer business of the Rights Agent or any successor Rights Agent, shall be
\nthe successor to the Rights Agent under this Agreement without the execution or
\nfiling of any paper or any further act on the part of any of the parties hereto;
\nPROVIDED that such Person<\/p>\n
25
\n 27
\nwould be eligible for appointment as a successor Rights Agent under the
\nprovisions of Section 21. In case at the time such successor Rights Agent shall
\nsucceed to the agency created by this Agreement, any of the Right Certificates
\nshall have been countersigned but not delivered, any such successor Rights Agent
\nmay adopt the countersignature of the predecessor Rights Agent and deliver such
\nRight Certificates so countersigned; and in case at that time any of the Right
\nCertificates shall not have been countersigned, any successor Rights Agent may
\ncountersign such Right Certificates either in the name of the predecessor Rights
\nAgent or in the name of the successor Rights Agent; and in all such cases such
\nRight Certificates shall have the full force provided in the Right Certificates
\nand in this Agreement.<\/p>\n
In case at any time the name of the Rights Agent shall be changed
\nand at such time any of the Right Certificates shall have been countersigned but
\nnot delivered, the Rights Agent may adopt the countersignature under its prior
\nname and deliver Right Certificates so countersigned; and in case at that time
\nany of the Right Certificates shall not have been countersigned, the Rights
\nAgent may countersign such Right Certificates either in its prior name or in its
\nchanged name; and in all such cases such Right Certificates shall have the full
\nforce provided in the Right Certificates and in this Agreement.<\/p>\n
Section 20. Duties of Rights Agent. The Rights Agent undertakes only the
\nduties and obligations imposed by this Agreement (and no implied duties and
\nobligations) upon the following terms and conditions, by all of which the
\nCompany and the holders of Right Certificates, by their acceptance thereof,
\nshall be bound:<\/p>\n
20.1. Legal Counsel. The Rights Agent may consult with legal
\ncounsel selected by it (who may be legal counsel for the Company), and the
\nadvice or opinion of such counsel shall be full and complete authorization and
\nprotection to the Rights Agent, and the Rights Agent shall incur no liability
\nfor or in respect of, any action taken, suffered or omitted by it in accordance
\nwith such advice or opinion.<\/p>\n
20.2. Certificates as to Facts or Matters. Whenever in the
\nperformance of its duties under this Agreement the Rights Agent shall deem it
\nnecessary or desirable that any fact or matter be proved or established by the
\nCompany prior to taking, suffering or omitting to take any action hereunder,
\nsuch fact or matter (unless other evidence in respect thereof be herein
\nspecifically prescribed) may be deemed to be conclusively proved and established
\nby a certificate signed by any one of the Chairman of the Board of Directors,
\nthe Chief Executive Officer, the President, the Chief Financial Officer, any
\nVice President, the Treasurer, the Secretary or any Assistant Treasurer or
\nAssistant Secretary of the Company and delivered to the Rights Agent; and such
\ncertificate shall be full authorization and protection to the Rights Agent and
\nthe Rights Agent shall incur no liability for or in respect of any action taken,
\nsuffered or omitted to be taken by it under the provisions of this Agreement in
\nreliance upon such certificate.<\/p>\n
20.3. Standard of Care. The Rights Agent shall be liable
\nhereunder only for its own gross negligence, bad faith or willful misconduct
\n(each as determined by a final, nonappealable order, judgment, decree or ruling
\nof a court of competent jurisdiction). Anything to the contrary notwithstanding,
\nin no event shall the Rights Agent be liable for special, punitive, indirect,
\nconsequential or incidental loss or damage of any kind whatsoever (including but
\nnot limited to lost profits), even if the Rights Agent has been advised of the
\nlikelihood of such loss or <\/p>\n
26
\n 28
\ndamage. Any liability of the Rights Agent under this Rights Agreement will be
\nlimited to the amount of fees paid by the Company to the Rights Agent.<\/p>\n
20.4. Reliance on Agreement and Right Certificates. The Rights
\nAgent shall not be liable for or by reason of any of the statements of fact or
\nrecitals contained in this Agreement or in the Right Certificates (except as to
\nits countersignature thereof) or be required to verify the same, but all such
\nstatements and recitals are and shall be deemed to have been made by the Company
\nonly.<\/p>\n
20.5. No Responsibility as to Certain Matters. The Rights Agent
\nshall not be under any responsibility or have any liability in respect of the
\nvalidity of this Agreement or the execution and delivery hereof (except the due
\nexecution hereof by the Rights Agent) or in respect of the validity or execution
\nof any Right Certificate (except its countersignature thereof); nor shall it be
\nresponsible for any breach by the Company of any covenant or condition contained
\nin this Agreement or in any Right Certificate; nor shall it be responsible for
\nany change in the exercisability of the Rights (including the Rights becoming
\nnull and void pursuant to Section 11.1.2) or any adjustment required under the
\nprovisions of Sections 3, 11, 13, 23 or 27 or responsible for the manner, method
\nor amount of any such adjustment or the ascertaining of the existence of facts
\nthat would require any such adjustment (except with respect to the exercise of
\nRights evidenced by Right Certificates after actual notice of any such change or
\nadjustment); nor shall it by any act hereunder be deemed to make any
\nrepresentation or warranty as to the authorization or reservation of any Common
\nShares or other securities to be issued pursuant to this Agreement or any Right
\nCertificate or as to whether any Common Shares will, when so issued, be validly
\nauthorized and issued, fully paid and nonassessable.<\/p>\n
20.6. Further Assurance by Company. The Company agrees that it
\nwill perform, execute, acknowledge and deliver or cause to be performed,
\nexecuted, acknowledged and delivered all such further and other acts,
\ninstruments and assurances as may reasonably be required by the Rights Agent for
\nthe carrying out or performing by the Rights Agent of the provisions of this
\nAgreement.<\/p>\n
20.7. Authorized Company Officers. The Rights Agent is hereby
\nauthorized and directed to accept instructions with respect to the performance
\nof its duties hereunder from any one of the Chairman of the Board of Directors,
\nthe Chief Executive Officer, the President, the Chief Financial Officer, any
\nVice President, the Treasurer, the Secretary or any Assistant Treasurer or
\nAssistant Secretary of the Company, and to apply to such officers for advice or
\ninstructions in connection with its duties under this Agreement, and such
\ninstructions shall be full authorization and protection to the Rights Agent and
\nthe Rights Agent shall incur no liability for or in respect of any action taken,
\nsuffered or omitted to be taken by it in accordance with instructions of any
\nsuch officer or for any delay in acting while waiting for these instructions.
\nAny application by the Rights Agent for written instructions from the Company
\nmay, at the option of the Rights Agent, set forth in writing any action proposed
\nto be taken or omitted by the Rights Agent with respect to its duties or
\nobligations under this Agreement and the date on and\/or after which such action
\nshall be taken or such omission shall be effective. The Rights Agent shall not
\nbe liable to the Company for any action taken by, or omission of, the Rights
\nAgent in accordance with a proposal included in any such application on or after
\nthe date specified therein (which date shall not be less than three business
\ndays after the date any such<\/p>\n
27
\n 29<\/p>\n
officer actually receives such application, unless any such officer shall have
\nconsented in writing to an earlier date) unless, prior to taking of any such
\naction (or the effective date in the case of omission), the Rights Agent shall
\nhave received written instructions in response to such application specifying
\nthe action to be taken or omitted.<\/p>\n
20.8. Freedom to Trade in Company Securities. The Rights Agent
\nand any shareholder, affiliate, director, officer or employee of the Rights
\nAgent may buy, sell or deal in any of the Rights or other securities of the
\nCompany or become pecuniarily interested in any transaction in which the Company
\nmay be interested, or contract with or lend money to the Company or otherwise
\nact as fully and freely as though it were not Rights Agent under this Agreement.
\nNothing herein shall preclude the Rights Agent from acting in any other capacity
\nfor the Company or for any other legal entity.<\/p>\n
20.9. Reliance on Attorneys and Agents. The Rights Agent may
\nexecute and exercise any of the rights or powers hereby vested in it or perform
\nany duty hereunder either itself or by or through its attorneys or agents, and
\nthe Rights Agent shall not be answerable or accountable for any act, omission,
\ndefault, neglect or misconduct of any such attorneys or agents or for any loss
\nto the Company resulting from any such act, omission, default, neglect or
\nmisconduct, absent gross negligence, bad faith or willful misconduct (each as
\ndetermined by a final, non-appealable order, judgment, decree or ruling of a
\ncourt of competent jurisdiction) in the selection and continued employment
\nthereof.<\/p>\n
20.10. Incomplete Certificate. If, with respect to any Rights
\nCertificate surrendered to the Rights Agent for exercise or transfer, the
\ncertificate contained in the form of assignment or the form of election to
\npurchase set forth on the reverse thereof, as the case may be, has not been
\ncompleted to certify the holder is not an Acquiring Person (or an Affiliate or
\nAssociate thereof), the Rights Agent shall not take any further action with
\nrespect to such requested exercise or transfer without first consulting with the
\nCompany.<\/p>\n
20.11. Rights Holders List. At any time and from time to time
\nafter the Distribution Date, and no more often than quarterly upon the
\nreasonable request of the Company, the Rights Agent shall promptly deliver to
\nthe Company a list, as of the most recent practicable date (or as of such
\nearlier date as may be specified by the Company), of the holders of record of
\nRights.<\/p>\n
20.12. Assurance to Rights Agent. No provision of this Agreement
\nshall require the Rights Agent to expend or risk its own funds or otherwise
\nincur any financial liability in the performance of any of its duties hereunder
\nor in the exercise of its rights if it believes that repayment of such funds or
\nadequate indemnification against such risk or liability is not assured to it.<\/p>\n
Section 21. Change of Rights Agent. The Rights Agent or any successor
\nRights Agent may resign and be discharged from its duties under this Agreement
\nupon thirty (30) days’ notice in writing mailed to the Company and to each
\ntransfer agent of the Common Shares, as applicable, by registered or certified
\nmail. Following the Distribution Date, the Company shall promptly notify the
\nholders of the Right Certificates by first-class mail of any such resignation.
\nThe Company may remove the Rights Agent or any successor Rights Agent upon
\nthirty (30)<\/p>\n
28
\n 30
\ndays’ notice in writing, mailed to the Rights Agent or successor Rights Agent,
\nas the case may be, and to each transfer agent of the Common Shares, as
\napplicable, by registered or certified mail, and to the holders of the Right
\nCertificates by first-class mail. If the Rights Agent shall resign or be removed
\nor shall otherwise become incapable of acting, the resigning, removed, or
\nincapacitated Rights Agent shall remit to the Company, or to any successor
\nRights Agent designated by the Company, all books, records, funds, certificates
\nor other documents or instruments of any kind then in its possession which were
\nacquired by such resigning, removed or incapacitated Rights Agent in connection
\nwith its services as Rights Agent hereunder, and shall thereafter be discharged
\nfrom all duties and obligations hereunder. Following notice of such removal,
\nresignation or incapacity, the Company shall appoint a successor to such Rights
\nAgent. If the Company shall fail to make such appointment within a period of
\nthirty (30) days after giving notice of such removal or after it has been
\nnotified in writing of such resignation or incapacity by the resigning or
\nincapacitated Rights Agent or by the holder of a Right Certificate (who shall,
\nwith such notice, submit his Right Certificate for inspection by the Company),
\nthen the registered holder of any Right Certificate may apply to any court of
\ncompetent jurisdiction for the appointment of a new Rights Agent. Any successor
\nRights Agent, whether appointed by the Company or by such a court, shall be (i)
\na Person organized and doing business under the laws of the United States or any
\nother state of the United States so long as such Person is duly qualified and
\nauthorized to do business, authorized to exercise stock transfer powers and
\nsubject to supervision or examination by Federal or state authority, and which
\nhas at the time of its appointment as Rights Agent a combined capital and
\nsurplus of at least $10 million or (ii) an affiliate of such Person referenced
\nin clause (i) above. After appointment, the successor Rights Agent shall be
\nvested with the same powers, rights, duties and responsibilities as if it had
\nbeen originally named as Rights Agent without further act or deed; but the
\npredecessor Rights Agent shall deliver and transfer to the successor Rights
\nAgent any property at the time held by it hereunder, and execute and deliver any
\nfurther assurance, conveyance, act or deed necessary for the purpose. Not later
\nthan the effective date of any such appointment the Company shall file notice
\nthereof in writing with the predecessor Rights Agent and each transfer agent of
\nthe Common Shares, as applicable, and, following the Distribution Date, mail a
\nnotice thereof in writing to the registered holders of the Right Certificates.
\nFailure to give any notice provided for in this Section 21, however, or any
\ndefect therein, shall not affect the legality or validity of the resignation or
\nremoval of the Rights Agent or the appointment of the successor Rights Agent, as
\nthe case may be.<\/p>\n
Section 22. Issuance of New Right Certificates. Notwithstanding any of
\nthe provisions of this Agreement or of the Rights to the contrary, the Company
\nmay, at its option, issue new Right Certificates evidencing Rights in such form
\nas may be approved by its Board of Directors to reflect any adjustment or change
\nin the Purchase Price and the number or kind or class of shares or other
\nsecurities or property purchasable under the Right Certificates made in
\naccordance with the provisions of this Agreement. In addition, in connection
\nwith the issuance or sale of Common Shares following the Distribution Date and
\nprior to the Expiration Date, the Company shall, with respect to Common Shares
\nso issued or sold pursuant to the exercise of stock options or under any
\nemployee plan or arrangement, granted or awarded, or upon exercise, conversion
\nor exchange of securities hereinafter issued by the Company, in each case
\nexisting prior to the Distribution Date, issue Right Certificates representing
\nthe appropriate number of Rights in connection with such issuance or sale;
\nPROVIDED, HOWEVER, that (i) no such Right Certificate shall be issued if, and to
\nthe extent that, the Company shall be advised by counsel that<\/p>\n
29
\n 31
\nsuch issuance would create a significant risk of material adverse tax
\nconsequences to the Company or the Person to whom such Right Certificate would
\nbe issued and (ii) no such Right Certificate shall be issued if, and to the
\nextent that, appropriate adjustment shall otherwise have been made in lieu of
\nthe issuance thereof.<\/p>\n
Section 23. Redemption.<\/p>\n
23.1. Right to Redeem. The Board of Directors of the Company may,
\nat its option, at any time prior to the close of business on the tenth day
\nfollowing the Shares Acquisition Date, redeem all but not less than all of the
\nthen outstanding Rights at a redemption price of $.001 per Right, appropriately
\nadjusted to reflect any stock split, stock dividend, recapitalization or similar
\ntransaction occurring after the date hereof (such redemption price being
\nhereinafter referred to as the “Redemption Price”), and the Company may, at its
\noption, pay the Redemption Price in Common Shares (based on the “current per
\nshare market price,” determined pursuant to Section 11.4, of the Common Shares
\nat the time of redemption), cash or any other form of consideration deemed
\nappropriate by the Board of Directors. The preceding sentence notwithstanding,
\nprior to the expiration of the period during which the Rights may be redeemed as
\nspecified therein (or such longer period as the Board of Directors of the
\nCompany may select pursuant to this sentence), the Board of Directors of the
\nCompany may extend, one or more times, the period during which the Rights may be
\nredeemed beyond the close of business on the tenth day following the Shares
\nAcquisition Date. The redemption of the Rights by the Board of Directors may be
\nmade effective at such time, on such basis and subject to such conditions as the
\nBoard of Directors in its sole discretion may establish. Notwithstanding
\nanything contained in this Agreement to the contrary, the Rights shall not be
\nexercisable following a transaction or event described in Section 11.1.2 prior
\nto the expiration or termination of the Company’s right of redemption hereunder.<\/p>\n
23.2. Redemption Procedures. Immediately upon the action of the
\nBoard of Directors of the Company ordering the redemption of the Rights (or at
\nsuch later time as the Board of Directors may establish for the effectiveness of
\nsuch redemption), and without any further action and without any notice, the
\nright to exercise the Rights will terminate and the only right thereafter of the
\nholders of Rights shall be to receive the Redemption Price for each Right so
\nheld. The Company shall promptly give public notice of such redemption (as well
\nas prompt written notice thereof to the Rights Agent); PROVIDED, HOWEVER, that
\nthe failure to give, or any defect in, any such notice shall not affect the
\nvalidity of such redemption. The Company shall promptly give, or cause the
\nRights Agent to give, notice of such redemption to the holders of the then
\noutstanding Rights by mailing such notice to all such holders at their last
\naddresses as they appear upon the registry books of the Rights Agent or, prior
\nto the Distribution Date, on the registry books of the transfer agent for the
\nCommon Shares. Any notice which is mailed in the manner herein provided shall be
\ndeemed given, whether or not the holder receives the notice. Each such notice of
\nredemption shall state the method by which the payment of the Redemption Price
\nwill be made. Neither the Company nor any of its Affiliates or Associates may
\nredeem, acquire or purchase for value any Rights at any time in any manner other
\nthan that specifically set forth in this Section 23 or in Section 27, and other
\nthan in connection with the purchase, acquisition or redemption of Common Shares
\nprior to the Distribution Date.<\/p>\n
30
\n 32
\n Section 24. Notice of Certain Events. In case the Company shall propose
\nat any time after the earlier of the Shares Acquisition Date and the
\nDistribution Date (a) to pay any dividend payable in stock of any class to the
\nholders of Common Shares or to make any other distribution to the holders of
\nCommon Shares (other than a regular periodic cash dividend at a rate not in
\nexcess of 125% of the rate of the last regular periodic cash dividend
\ntheretofore paid or, in case regular periodic cash dividends have not
\ntheretofore been paid, at a rate not in excess of 50% of the average net income
\nper share of the Company for the four quarters ended immediately prior to the
\npayment of such dividends, or a stock dividend on, or a subdivision, combination
\nor reclassification of the Common Shares), or (b) to offer to the holders of
\nCommon Shares rights or warrants to subscribe for or to purchase any additional
\nCommon Shares or shares of stock of any class or any other securities, rights or
\noptions, or (c) to effect any reclassification of its Common Shares (other than
\na reclassification involving only the subdivision of outstanding Common Shares),
\nor (d) to effect any consolidation or merger into or with, or to effect any sale
\nor other transfer (or to permit one or more of its Subsidiaries to effect any
\nsale or other transfer), in one or more transactions, of 50% or more of the
\nassets or earning power of the Company and its Subsidiaries (taken as a whole)
\nto, any other Person (other than pursuant to a merger or other acquisition
\nagreement of the type described in Section 1.3(ii)(A)(z)), or (e) to effect the
\nliquidation, dissolution or winding up of the Company, or (f) to declare or pay
\nany dividend on the Common Shares payable in Common Shares or to effect a
\nsubdivision, combination or consolidation of the Common Shares (by
\nreclassification or otherwise than by payment of dividends in Common Shares),
\nthen, in each such case, the Company shall give to the Rights Agent and to each
\nholder of a Right Certificate, in accordance with Section 25, a notice of such
\nproposed action, which shall specify the record date for the purposes of such
\nstock dividend, distribution of rights or warrants, or the date on which such
\nreclassification, consolidation, merger, sale, transfer, liquidation,
\ndissolution, or winding up is to take place and the date of participation
\ntherein by the holders of the Common Shares, if any such date is to be fixed,
\nand such notice shall be so given in the case of any action covered by clause
\n(a) or (b) above at least ten (10) days prior to the record date for determining
\nholders of the Common Shares for purposes of such action, and in the case of any
\nsuch other action, at least ten (10) days prior to the date of the taking of
\nsuch proposed action or the date of participation therein by the holders of the
\nCommon Shares, whichever shall be the earlier.<\/p>\n
In case any event set forth in Section 11.1.2 or Section 13 shall
\noccur, then, in any such case, the Company shall as soon as practicable
\nthereafter give to the Rights Agent and to each holder of a Right Certificate,
\nin accordance with Section 25, a notice of the occurrence of such event, which
\nnotice shall describe the event and the consequences of the event to holders of
\nRights under Section 11.1.2 and Section 13.<\/p>\n
Notwithstanding anything in this Agreement to the contrary, prior
\nto the Distribution Date a filing by the Company with the Securities and
\nExchange Commission shall constitute sufficient notice to the holders of
\nsecurities of the Company, including the Rights, for purposes of this Agreement
\nand no other notice need be given.<\/p>\n
Section 25. Notices. Notices or demands authorized by this Agreement to
\nbe given or made by the Rights Agent or by the holder of any Right Certificate
\nto or on the Company shall be sufficiently given or made if sent by first-class
\nmail, postage-prepaid, addressed (until another address is filed in writing with
\nthe Rights Agent) or by facsimile transmission as follows:<\/p>\n
31
\n 33
\n Coach, Inc.
\n 516 West 34th Street
\n New York, NY 10001
\n Attention: General Counsel
\n Facsimile No.: 212-629-2398<\/p>\n
Subject to the provisions of Section 21 and Section 24, any notice or demand
\nauthorized by this Agreement to be given or made by the Company or by the holder
\nof any Right Certificate to or on the Rights Agent shall be sufficiently given
\nor made if sent by first-class mail, postage-prepaid, addressed (until another
\naddress is filed in writing with the Company) or by facsimile transmission as
\nfollows:<\/p>\n
Mellon Investor Services LLC
\n 120 Broadway, 13th Floor
\n New York, New York 10271
\n Attention: Relationship Manager
\n Facsimile No.: (917) 320-6318<\/p>\n
with a copy to:<\/p>\n
Mellon Investor Services LLC
\n 85 Challenger Road
\n Ridgefield Park, NJ 07660
\n Attention: General Counsel
\n Facsimile No.: (201) 296-4004<\/p>\n
Notices or demands authorized by this Agreement to be given or made by the
\nCompany or the Rights Agent to the holder of any Right Certificate (or, prior to
\nthe Distribution Date, to the holder of any certificate representing Common
\nShares) shall be sufficiently given or made if sent by first-class mail,
\npostage-prepaid, addressed to such holder at the address of such holder as shown
\non the registry books of the Company.<\/p>\n
Section 26. Supplements and Amendments. For so long as the Rights are
\nredeemable, the Board of Directors may in its sole and absolute discretion, and
\nthe Rights Agent shall, if the Board of Directors (or an appropriate officer of
\nthe Company acting at the direction of the Board of Directors) so directs but
\nsubject to the other provisions of this Section, supplement or amend any
\nprovision of this Agreement in any respect without the approval of any holders
\nof Rights or Common Shares. From and after the time that the Rights are no
\nlonger redeemable, the Board of Directors may, and the Rights Agent shall, if
\nthe Board of Directors so (or an appropriate officer of the Company acting at
\nthe direction of the Board of Directors) directs but subject to the other
\nprovisions of this Section, from time to time supplement or amend this Agreement
\nwithout the approval of any holders of Rights (i) to cure any ambiguity or to
\ncorrect or supplement any provision contained herein which may be defective or
\ninconsistent with any other provisions herein, (ii) to shorten or lengthen any
\ntime period hereunder or (iii) to make any other changes or provisions in regard
\nto matters or questions arising hereunder which the Board of Directors may deem
\nnecessary or desirable, including but not limited to extending the Final
\nExpiration Date; PROVIDED, HOWEVER, that no such supplement or amendment shall
\nadversely affect the interests of<\/p>\n
32
\n 34
\nthe holders of Rights as such (other than an Acquiring Person or an Affiliate or
\nAssociate of an Acquiring Person), and no such supplement or amendment may cause
\nthe Rights again to become redeemable or cause this Agreement again to become
\namendable other than in accordance with this sentence; PROVIDED FURTHER, that
\nthe right of the Board of Directors to extend the Distribution Date or the
\nRedemption Date shall not require any amendment or supplement hereunder. Upon
\nthe delivery of a certificate from an appropriate officer of the Company which
\nstates that the proposed supplement or amendment is in compliance with the terms
\nof this Section 26, and provided, such supplement or amendment does not change
\nor increase the Rights Agent’s rights, duties, liabilities or obligations, the
\nRights Agent shall execute such supplement or amendment.<\/p>\n
Section 27. Exchange.<\/p>\n
27.1. Exchange of Common Shares for Rights. The Board of
\nDirectors of the Company may, at its option, at any time after the occurrence of
\na Trigger Event, exchange Common Shares for all or part of the then outstanding
\nand exercisable Rights (which shall not include Rights that have become null and
\nvoid pursuant to the provisions of Section 11.1.2) by exchanging at an exchange
\nratio of one Common Share per Right or that number of Common Shares having an
\naggregate value equal to the Spread (with such value being based on the current
\nper share market price (as determined pursuant to Section 11.4) on the date of
\nthe occurrence of a Trigger Event) per Right, appropriately adjusted to reflect
\nany stock split, stock dividend or similar transaction occurring after the date
\nhereof (such amount per Right being hereinafter referred to as the “Exchange
\nConsideration”). Notwithstanding the foregoing, the Board of Directors shall not
\nbe empowered to effect such exchange at any time after any Acquiring Person
\nshall have become the Beneficial Owner of 50% or more of the Common Shares then
\noutstanding. From and after the occurrence of an event specified in Section
\n13.1, any Rights that theretofore have not been exchanged pursuant to this
\nSection 27.1 shall thereafter be exercisable only in accordance with Section 13
\nand may not be exchanged pursuant to this Section 27.1. The exchange of the
\nRights by the Board of Directors may be made effective at such time, on such
\nbasis and with such conditions as the Board of Directors in its sole discretion
\nmay establish.<\/p>\n
27.2. Exchange Procedures. Immediately upon the action of the
\nBoard of Directors of the Company ordering the exchange for any Rights pursuant
\nto Section 27.1 and without any further action and without any notice, the right
\nto exercise such Rights shall terminate and the only right thereafter of a the
\nholders of such Rights shall be to receive the Exchange Consideration. The
\nCompany shall promptly give public notice of any such exchange (as well as
\nprompt written notice thereof to the Rights Agent); PROVIDED, HOWEVER, that the
\nfailure to give, or any defect in, such notice shall not affect the validity of
\nsuch exchange. The Company promptly shall mail a notice of any such exchange to
\nall of the holders of such Rights at their last addresses as they appear upon
\nthe registry books of the Rights Agent. Any notice which is mailed in the manner
\nherein provided shall be deemed given, whether or not the holder receives the
\nnotice. Each such notice of exchange shall state the method by which the
\nexchange of the Common Shares for Rights will be effected and, in the event of
\nany partial exchange, the number of Rights which will be exchanged. Any partial
\nexchange shall be effected pro rata based on the number of Rights (other than
\nthe Rights that have become null and void pursuant to the provisions of Section
\n11.1.2) held by each holder of Rights.<\/p>\n
33
\n 35
\n 27.3. Insufficient Shares. The Company shall not be required to
\nissue fractions of Common Shares or to distribute certificates which evidence
\nfractional Common Shares. In lieu of such fractional Common Shares, the Company
\nshall pay to the registered holders of the Rights Certificates with regard to
\nwhich such fractional Common Shares would otherwise be issuable an amount in
\ncash equal to the same fraction of the current market value of a whole Common
\nShare. For the purposes of this Section 27.3, the current market value of a
\nwhole Common Share shall be the current per share market price (as determined
\npursuant to Section 11.4) for the Trading Day immediately prior to the date of
\nexchange pursuant to this Section 27.<\/p>\n
Section 28. Successors. All the covenants and provisions of this
\nAgreement by or for the benefit of the Company or the Rights Agent shall bind
\nand inure to the benefit of their respective successors and assigns hereunder.<\/p>\n
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
\nbe construed to give to any Person or corporation other than the Company, the
\nRights Agent and the registered holders of the Right Certificates (and, prior to
\nthe Distribution Date, the Common Shares) any legal or equitable right, remedy
\nor claim under this Agreement; but this Agreement shall be for the sole and
\nexclusive benefit of the Company, the Rights Agent and the registered holders of
\nthe Right Certificates (and, prior to the Distribution Date, the Common Shares).<\/p>\n
Section 30. Determination and Actions by the Board of Directors; General
\nLimitations on Redemption, Modification or Termination of Rights or Amendment to
\nAgreement. The Board of Directors of the Company shall have the exclusive power
\nand authority to administer this Agreement and to exercise the rights and powers
\nspecifically granted to the Board of Directors of the Company, or as may be
\nnecessary or advisable in the administration of this Agreement, including,
\nwithout limitation, the right and power to (i) redeem, modify or terminate the
\nRights, (ii) amend this Agreement in any way, (iii) interpret the provisions of
\nthis Agreement and (iv) make all determinations deemed necessary or advisable
\nfor the administration of this Agreement; PROVIDED, HOWEVER, all actions of the
\nBoard of Directors must be approved by a majority of the members of the Board of
\nDirectors who are not Future Directors and Future Directors shall not be
\nentitled to vote or otherwise participate in such actions. All Board of Director
\nactions (including, for purposes of clause (y) below, all omissions with respect
\nto Board of Director actions) that are done or made by the Board of Directors of
\nthe Company in good faith, shall (x) be final, conclusive and binding on the
\nCompany, the Rights Agent, the holders of the Rights, as such, and all other
\nPersons, and (y) not subject the Board of Directors to any liability to the
\nholders of the Rights. The Rights Agent shall always be entitled to assume that
\nthe Company’s Board of Directors acted in good faith and shall be fully
\nprotected and incur no liability in reliance thereon.<\/p>\n
Section 31. Severability. If any term, provision, covenant or
\nrestriction of this Agreement is held by a court of competent jurisdiction or
\nother authority to be invalid, void or unenforceable, the remainder of the
\nterms, provisions, covenants and restrictions of this Agreement shall remain in
\nfull force and effect and shall in no way be affected, impaired or invalidated.<\/p>\n
Section 32. Governing Law. This Agreement and each Right Certificate
\nissued hereunder shall be deemed to be a contract made under the laws of the
\nState of Maryland and for<\/p>\n
34
\n 36
\nall purposes shall be governed by and construed in accordance with the laws of
\nsuch State applicable to contracts to be made and performed entirely within such
\nState; provided, however, that all provisions regarding the rights, duties and
\nobligations of the Rights Agent shall be governed by and construed in accordance
\nwith the laws of the State of New York applicable to contracts made and to be
\nperformed entirely within such State.<\/p>\n
Section 33. Counterparts. This Agreement may be executed in any number
\nof counterparts and each of such counterparts shall for all purposes be deemed
\nto be an original, and all such counterparts shall together constitute but one
\nand the same instrument.<\/p>\n
Section 34. Descriptive Heading. Descriptive headings of the several
\nSections of this Agreement are inserted for convenience only and shall not
\ncontrol or affect the meaning or construction of any of the provisions hereof.<\/p>\n
[INTENTIONALLY LEFT BLANK]<\/p>\n
35
\n 37
\n IN WITNESS WHEREOF, the parties hereto have caused this Agreement
\nto be duly executed, as of the day and year first above written.<\/p>\n
COACH, INC.<\/p>\n
By: \/s\/ Lew Frankfort<\/p>\n
MELLON INVESTOR SERVICES LLC<\/p>\n
By: \/s\/ Yvonne D. Benn<\/p>\n
36<\/p>\n
38
\n EXHIBIT A<\/p>\n
[Form of Right Certificate]<\/p>\n
Certificate No. R) _______ Rights<\/p>\n
NOT EXERCISABLE AFTER THE CLOSE OF BUSINESS ON MAY 2, 2011, OR EARLIER
\n IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN OR IF THE COMPANY IS
\n MERGED OR ACQUIRED PURSUANT TO AN AGREEMENT OF THE TYPE DESCRIBED IN
\n SECTION 1.3(ii)(A)(z) OF THE AGREEMENT. THE RIGHTS ARE SUBJECT TO
\n REDEMPTION AT $.001 PER RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH
\n IN THE AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION
\n 11.1.2 OF THE AGREEMENT), RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED
\n TO AN ACQUIRING PERSON (AS DEFINED IN THE AGREEMENT), OR ANY SUBSEQUENT
\n HOLDER OF SUCH RIGHTS WILL BECOME NULL AND VOID AND WILL NO LONGER BE
\n TRANSFERABLE.<\/p>\n
Right Certificate<\/p>\n
COACH, INC.<\/p>\n
This certifies that ____________, or registered assigns, is
\nthe registered owner of the number of Rights set forth above, each of which
\nentitles the owner thereof, subject to the terms, provisions and conditions of
\nthe Rights Agreement, dated as of May 3, 2001, as the same may be amended from
\ntime to time (the “Agreement”), between Coach, Inc., a Maryland corporation (the
\n“Company”), and Mellon Investor Services LLC, a New Jersey limited liability
\ncompany, as Rights Agent (the “Rights Agent”), to purchase from the Company at
\nany time after the Distribution Date and prior to 5:00 P.M. (New York City time)
\non May 2, 2011, at the offices of the Rights Agent, or its successors as Rights
\nAgent, designated for such purpose, one fully paid, nonassessable common share
\n(the “Common Shares”) of the Company, at a purchase price of $170.00 per share,
\nsubject to adjustment (the “Purchase Price”), upon presentation and surrender of
\nthis Right Certificate with the Form of Election to Purchase and certification
\nduly executed. The number of Rights evidenced by this Right Certificate (and the
\nnumber of Common Shares which may be purchased upon exercise thereof) set forth
\nabove, and the Purchase Price set forth above, are the number and Purchase Price
\nas of ________, ____ based on the Common Shares as constituted at such date.
\nCapitalized terms used in this Right Certificate without definition shall have
\nthe meanings ascribed to them in the Agreement. As provided in the Agreement,
\nthe Purchase Price and the number of Common Shares which may be purchased upon
\nthe exercise of the Rights evidenced by this Right Certificate are subject to
\nmodification and adjustment upon the happening of certain events.<\/p>\n
This Right Certificate is subject to all of the terms,
\nprovisions and conditions of the Agreement, which terms, provisions and
\nconditions are hereby incorporated herein by reference and made a part hereof
\nand to which Agreement reference is hereby made for a full description of the
\nrights, limitations of rights, obligations, duties and immunities hereunder of
\nthe<\/p>\n
A-1
\n 39
\nRights Agent, the Company and the holders of the Right Certificates. Copies of
\nthe Agreement are on file at the offices of the Company.<\/p>\n
This Right Certificate, with or without other Right
\nCertificates, upon surrender at the offices of the Rights Agent designated for
\nsuch purpose, may be exchanged for another Right Certificate or Right
\nCertificates of like tenor and date evidencing Rights entitling the holder to
\npurchase a like aggregate number of Common Shares as the Rights evidenced by the
\nRight Certificate or Right Certificates surrendered shall have entitled such
\nholder to purchase. If this Right Certificate shall be exercised in part, the
\nholder shall be entitled to receive upon surrender hereof-another Right
\nCertificate or Right Certificates for the number of whole Rights not exercised.<\/p>\n
Subject to the provisions of the Agreement, the Board of
\nDirectors may, at its option, (i) redeem the Rights evidenced by this Right
\nCertificate at a redemption price of $.001 per Right at any time prior to the
\nclose of business on the tenth day after the Shares Acquisition Date, (ii)
\nexchange Common Shares for the Rights evidenced by this Certificate, in whole or
\nin part or (iii) extend the period during which redemption of the Rights is
\npermitted; PROVIDED, HOWEVER, all actions of the Board of Directors must be
\napproved by a majority of the members of the Board of Directors who are not
\nFuture Directors and Future Directors shall not be entitled to vote or otherwise
\nparticipate in such actions.<\/p>\n
No fractional Common Shares will be issued upon the exercise
\nof any Right or Rights evidenced hereby, but in lieu thereof a cash payment will
\nbe made, as provided in the Agreement.<\/p>\n
No holder of this Right Certificate, as such, shall be
\nentitled to vote or receive dividends or be deemed for any purpose the holder of
\nthe Common Shares or of any other securities of the Company which may at any
\ntime be issuable on the exercise hereof, nor shall anything contained in the
\nAgreement or herein be construed to confer upon the holder hereof, as such, any
\nof the rights of a shareholder of the Company or any right to vote for the
\nelection of directors or upon any matter submitted to shareholders at any
\nmeeting thereof, or to give or withhold consent to any corporate action, or to
\nreceive notice of meetings or other actions affecting shareholders (except as
\nprovided in the Agreement), or to receive dividends or subscription rights, or
\notherwise, until the Right or Rights evidenced by this Right Certificate shall
\nhave been exercised as provided in the Agreement.<\/p>\n
If any term, provision, covenant or restriction of the
\nAgreement is held by a court of competent jurisdiction or other authority to be
\ninvalid, void or unenforceable, the remainder of the terms, provisions,
\ncovenants and restrictions of the Agreement shall remain in full force and
\neffect and shall in no way be affected, impaired or invalidated.<\/p>\n
This Right Certificate shall not be valid or binding for any
\npurpose until it shall have been countersigned by the Rights Agent.<\/p>\n
A-2
\n 40
\n WITNESS the facsimile signature of the proper officers of the
\nCompany and its corporate seal. Dated as of .
\n —————
\nAttest: COACH, INC.<\/p>\n
By: By:
\n ——————————- ——————————-
\n Title: Title:
\n ———————– ————————<\/p>\n
Countersigned:<\/p>\n
MELLON INVESTOR SERVICES LLC, as Rights Agent<\/p>\n
By:
\n ——————————-
\n Authorized Signature<\/p>\n
A-3
\n 41
\n [Form of Reverse Side of Right Certificate]<\/p>\n
FORM OF ASSIGNMENT<\/p>\n
(To be executed by the registered holder if such holder
\n desires to transfer the Right Certificate.)<\/p>\n
FOR VALUE RECEIVED
\n ——————————————–
\nhereby sells, assigns and transfers unto
\n —————————————-<\/p>\n
——————————————————————————–<\/p>\n
——————————————————————————–<\/p>\n
(Please print name and address
\n of transferee)<\/p>\n
Rights evidenced by this Right Certificate, together with all right, title and
\ninterest therein, and does hereby irrevocably constitute and appoint
\n Attorney, to transfer the within Right Certificate on
\n————————-
\nthe books of the within named Company, with full power of substitution.<\/p>\n
Dated:
\n ——————-<\/p>\n
————————————-
\n Signature<\/p>\n
Signature Guaranteed:<\/p>\n
———————————-<\/p>\n
Signatures must be guaranteed by an “eligible guarantor
\ninstitution” as defined in Rule 17Ad-15 promulgated under the Securities
\nExchange Act of 1934, as amended.<\/p>\n
A-4
\n 42
\nThe undersigned hereby certifies that:<\/p>\n
(1) the Rights evidenced by this Right Certificate are not
\nbeneficially owned by and are not being assigned to an Acquiring Person or an
\nAffiliate or an Associate thereof; and<\/p>\n
(2) after due inquiry and to the best knowledge of the
\nundersigned, the undersigned did not acquire the Rights evidenced by this Right
\nCertificate from any person who is, was or subsequently became an Acquiring
\nPerson or an Affiliate or Associate thereof.<\/p>\n
Dated:
\n ——————–<\/p>\n
————————————–
\n Signature<\/p>\n
A-5
\n 43
\n FORM OF ELECTION TO PURCHASE<\/p>\n
(To be executed if holder desires to
\n exercise the Right Certificate.)<\/p>\n
To: COACH, INC.<\/p>\n
The undersigned hereby irrevocably elects to exercise
\n Rights represented by this Right Certificate to purchase the
\n——————
\nCommon Shares issuable upon the exercise of such Rights (or such other
\nsecurities or property of the Company or of any other Person which may be
\nissuable upon the exercise of the Rights) and requests that certificates for
\nsuch shares be issued in the name of:<\/p>\n
————————————————————
\n(Please print name and address)<\/p>\n
————————————————————<\/p>\n
If such number of Rights shall not be all the Rights evidenced by this Right
\nCertificate, a new Right Certificate for the balance remaining of such Rights
\nshall be registered in the name of and delivered to:<\/p>\n
Please insert social security
\nor other identifying number<\/p>\n
————————————————————
\n(Please print name and address)<\/p>\n
————————————————————<\/p>\n
————————————————————<\/p>\n
Dated:
\n ———————-<\/p>\n
—————————————–
\n Signature<\/p>\n
Signature Guaranteed:<\/p>\n
————————————<\/p>\n
Signatures must be guaranteed by an “eligible guarantor
\ninstitution” as defined in Rule 17Ad-15 promulgated under the Securities
\nExchange Act of 1934, as amended.<\/p>\n
A-6
\n 44
\nThe undersigned hereby certifies that:<\/p>\n
(1) the Rights evidenced by this Right Certificate are not
\nbeneficially owned by and are not being assigned to an Acquiring Person or an
\nAffiliate or an Associate thereof; and<\/p>\n
(2) after due inquiry and to the best knowledge of the
\nundersigned, the undersigned did not acquire the Rights evidenced by this Right
\nCertificate from any person who is, was or subsequently became an Acquiring
\nPerson or an Affiliate or Associate thereof.<\/p>\n
Dated:
\n ————————<\/p>\n
—————————————
\n Signature<\/p>\n
——————————————————————————–<\/p>\n
NOTICE<\/p>\n
The signature in the foregoing Form of Assignment and Form of
\nElection to Purchase must conform to the name as written upon the face of this
\nRight Certificate in every particular, without alteration or enlargement or any
\nchange whatsoever.<\/p>\n
In the event the certification set forth above in the Form of
\nAssignment or Form of Election to Purchase is not completed, the Company will
\ndeem the beneficial owner of the Rights evidenced by this Right Certificate to
\nbe an Acquiring Person or an Affiliate or Associate hereof and such Assignment
\nor Election to Purchase will not be honored.<\/p>\n
A-7
\n 45
\n EXHIBIT B<\/p>\n
As described in the Rights Agreement, Rights which are
\n held by or have been held by an Acquiring Person or Associates
\n or Affiliates thereof (as defined in the Rights Agreement) and certain
\ntransferees thereof shall become null and void and will no longer be
\n transferable.<\/p>\n
SUMMARY OF RIGHTS TO PURCHASE
\n COMMON SHARES<\/p>\n
On May 3, 2001 the Board of Directors of Coach, Inc. (the
\n“Company”) authorized and declared a dividend of one right (a “Right”) for each
\nshare of common stock, $0.01 par value per share (the “Common Shares”), of the
\nCompany outstanding at the close of business on May 22, 2001 (the “Record
\nDate”). As long as the Rights are attached to the Common Shares, the Company
\nwill issue one Right (subject to adjustment) with each new Common Share so that
\nall such shares will have attached Rights. When exercisable, each Right will
\nentitle the registered holder to purchase from the Company one Common Share at a
\nprice of $170.00 per Common Share, subject to adjustment (the “Purchase Price”).
\nThe description and terms of the Rights are set forth in a Rights Agreement,
\ndated as of May 3, 2001, as the same may be amended from time to time (the
\n“Agreement”), between the Company and Mellon Investor Services LLC, as Rights
\nAgent (the “Rights Agent”).<\/p>\n
Until the earlier to occur of (i) either ten (10) days
\nfollowing a public announcement that, or the date on which a majority of the
\nBoard becomes aware that, a person or group of affiliated or associated persons
\nhas acquired, or obtained the right to acquire, beneficial ownership of 10% or
\nmore of the Common Shares (an “Acquiring Person”) or (ii) ten (10) business days
\n(or such later date as may be determined by action of the Board of Directors
\nprior to such time as any person or group of affiliated persons becomes an
\nAcquiring Person) following the commencement or announcement of an intention to
\nmake a tender offer or exchange offer the consummation of which would result in
\nthe beneficial ownership by a person or group of 10% or more of the Common
\nShares (the earlier of (i) and (ii) being called the “Distribution Date”), the
\nRights will be evidenced, with respect to any of the Common Share certificates
\noutstanding as of the Record Date, by such Common Share certificate together
\nwith a copy of this Summary of Rights.<\/p>\n
The Agreement provides that until the Distribution Date (or
\nearlier redemption exchange, termination, or expiration of the Rights), the
\nRights will be transferred with and only with the Common Shares. Until the
\nDistribution Date (or earlier redemption or expiration of the Rights), new
\nCommon Share certificates issued after the close of business on the Record Date
\nupon transfer or new issuance of the Common Shares will contain a notation
\nincorporating the Agreement by reference. Until the Distribution Date (or
\nearlier redemption, exchange, termination or expiration of the Rights), the
\nsurrender for transfer of any certificates for Common Shares, with or without
\nsuch notation or a copy of this Summary of Rights, will also constitute the
\ntransfer of the Rights associated with the Common Shares represented by such
\ncertificate. As soon as practicable following the Distribution Date, separate
\ncertificates evidencing the Rights (“Right Certificates”) will be mailed to
\nholders of record of the Common <\/p>\n
B-1
\n 46
\nShares as of the close of business on the Distribution Date and such separate
\nRight Certificates alone will evidence the Rights.<\/p>\n
The Rights are not exercisable until the Distribution Date.
\nThe Rights will expire on the close of business on May 2, 2011, subject to the
\nCompany’s right to extend such date (the “Final Expiration Date”), unless
\nearlier redeemed or exchanged by the Company or terminated.<\/p>\n
The Purchase Price payable, and the number of Common Shares or
\nother securities or property issuable, upon exercise of the Rights are subject
\nto adjustment from time to time to prevent dilution (i) in the event of a stock
\ndividend on, or a subdivision, combination or reclassification of the Common
\nShares, (ii) upon the grant to holders of the Common Shares of certain rights or
\nwarrants to subscribe for or purchase Common Shares or convertible securities at
\nless than the current market price of the Common Shares or (iii) upon the
\ndistribution to holders of the Common Shares of evidences of indebtedness, cash,
\nsecurities or assets (excluding regular periodic cash dividends at a rate not in
\nexcess of 125% of the rate of the last regular periodic cash dividend
\ntheretofore paid or, in case regular periodic cash dividends have not
\ntheretofore been paid, at a rate not in excess of 50% of the average net income
\nper share of the Company for the four quarters ended immediately prior to the
\npayment of such dividend, or dividends payable in Common Shares (which dividends
\nwill be subject to the adjustment described in clause (i) above)) or of
\nsubscription rights or warrants (other than those referred to above).<\/p>\n
In the event that a Person becomes an Acquiring Person or if
\nthe Company were the surviving corporation in a merger with an Acquiring Person
\nor any affiliate or associate of an Acquiring Person and the Common Shares were
\nnot changed or exchanged, each holder of a Right, other than Rights that are or
\nwere acquired or beneficially owned by the Acquiring Person (which Rights will
\nthereafter be void), will thereafter have the right to receive upon exercise
\nthat number of Common Shares having a market value of two times the then current
\nPurchase Price of the Right. In the event that, after a person has become an
\nAcquiring Person, the Company were acquired in a merger or other business
\ncombination transaction or more than 50% of its assets or earning power were
\nsold, proper provision shall be made so that each holder of a Right shall
\nthereafter have the right to receive, upon the exercise thereof at the then
\ncurrent Purchase Price of the Right, that number of shares of common stock of
\nthe acquiring company which at the time of such transaction would have a market
\nvalue of two times the then current Purchase Price of the Right.<\/p>\n
At any time after a Person becomes an Acquiring Person and
\nprior to the earlier of one of the events described in the last sentence of the
\nprevious paragraph or the acquisition by such Acquiring Person of 50% or more of
\nthe outstanding Common Shares, the Board of Directors may cause the Company to
\nexchange the Rights (other than Rights owned by an Acquiring Person which will
\nhave become void), in whole or in part, for Common Shares at an exchange rate of
\none Common Share per Right (subject to adjustment).<\/p>\n
No adjustment in the Purchase Price will be required until
\ncumulative adjustments require an adjustment of at least 1% in such Purchase
\nPrice. No fractional Common Shares will be issued and in lieu thereof, a payment
\nin cash will be made based on the market price of the Common Shares on the last
\ntrading date prior to the date of exercise.<\/p>\n
B-2
\n 47
\n The Rights may be redeemed in whole, but not in part, at a
\nprice of $.001 per Right (the “Redemption Price”) by the Board of Directors at
\nany time prior to the close of business on the tenth day following either the
\npublic announcement that, or the date on which a majority of the Board becomes
\naware that, a Person has become an Acquiring Person. Redeeming the Rights would
\nrequire the approval of a majority of the Board members who at the time would
\nnot be considered Future Directors (as such term is defined the Agreement).
\nImmediately upon any redemption of the Rights, the right to exercise the Rights
\nwill terminate and the only right of the holders of Rights will be to receive
\nthe Redemption Price.<\/p>\n
Until a Right is exercised, the holder thereof, as such, will
\nhave no rights as a shareholder of the Company beyond those as an existing
\nshareholder, including, without limitation, the right to vote or to receive
\ndividends.<\/p>\n
Any of the provisions of the Agreement may be amended by the
\nBoard of Directors of the Company who are not Future Directors.<\/p>\n
A copy of the Agreement has been filed with the Securities and
\nExchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of the
\nAgreement is available free of charge from the Company. This summary description
\nof the Rights does not purport to be complete and is qualified in its entirety
\nby reference to the Agreement, which is incorporated herein by reference.<\/p>\n
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