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No. 1-13397
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
Form 10/A
(Amendment No. 2)
----------------------
GENERAL FORM FOR REGISTRATION
OF SECURITIES
Pursuant to Section 12(b) or 12(g) of
the Securities Exchange Act of 1934
-----------------------
Corn Products International, Inc.
Delaware 22-3514823
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Corn Products International, Inc. 60501-1933
P.O. Box 345 (Zip Code)
6500 South Archer Road
Bedford Park, IL
(Address of principal executive offices)
Registrant's telephone number, including area code:
708-563-2400
--------------------------
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be registered each class is to be registered
---------------- ------------------------------
Common Stock, $.01 par value, New York Stock Exchange, Inc.
including attached Preferred
Stock Purchase Right
Securities to be registered pursuant to Section 12(g) of the Act:
None
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EXPLANATORY NOTE
The sole purpose of this Amendment is to file certain
exhibits to the Registration Statement. Accordingly, this
Amendment consists only of the cover page, this note and Item 15
of Part II of the Registration Statement. The Information
Statement and the remainder of Part II are unchanged and have
been omitted.
2
II. INFORMATION NOT INCLUDED IN INFORMATION STATEMENT
Item 15. Financial Statements and Exhibits.
(b) Exhibits The following documents are filed as exhibits hereto:
Exhibit No. Description
- ----------- -----------
2.1 Form of Distribution Agreement.
3.1 Amended and Restated Certificate of Incorporation of Corn Products
International, Inc.+
3.2 Amended By-Laws of Corn Products International, Inc.+
4.1 Form of Rights Agreement.
4.2 Certificate of Designation for Registrant's Series A Junior
Participating Preferred Stock.
10.1 Form of Master Supply Agreement. +
10.2 Form of Tax Sharing Agreement.+
10.3 Form of Tax Indemnification Agreement.+
10.4 Form of Debt Agreement.+
10.5 Form of Transition Services Agreement.
10.6 Form of Master License Agreement.
10.7 Form of Distribution Agreement (filed as Exhibit 2.1).
10.8 Form of Employee Benefits Agreement.+
10.9 Form of Access Agreement.+
10.10 Form of Corn Products International, Inc. 1998 Stock Incentive Plan.
10.11 Form of Corn Products International Executive Severance Agreement.
21.1 List of Subsidiaries.+
- -----------------------------
+ Previously filed.
3
SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly caused
this Amendment No. 2 to the registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
CORN PRODUCTS INTERNATIONAL, INC.
By /s/ Marcia E. Doane
-------------------------------
Name: Marcia E. Doane
Title: Vice President,
General Counsel
and Corporate
Secretary
November 21, 1997
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
EXHIBITS
TO
FORM 10/A
(Amendment No. 2)
General Form for Registration of Securities
Pursuant to Section 12(b) of the Securities
Exchange Act of 1934
--------------------------
CORN PRODUCTS INTERNATIONAL, INC.
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EXHIBIT INDEX
Exhibit No.
- -----------
2.1 Form of Distribution Agreement.
3.1 Amended and Restated Certificate of Incorporation of Corn
Products International, Inc.+
3.2 Amended By-Laws of Corn Products International, Inc.+
4.1 Form of Rights Agreement.
4.2 Certificate of Designation for Registrant's Series A Junior
Participating Preferred Stock.
10.1 Form of Master Supply Agreement.+
10.2 Form of Tax Sharing Agreement.+
10.3 Form of Tax Indemnification Agreement.+
10.4 Form of Debt Agreement.+
10.5 Form of Transition Services Agreement.
10.6 Form of Master License Agreement.
10.7 Form of Distribution Agreement (filed as Exhibit 2.1).
10.8 Form of Employee Benefits Agreement.+
10.9 Form of Access Agreement.+
10.10 Form of Corn Products International, Inc. 1998 Stock
Incentive Plan.
10.11 Form of Corn Products International Executive Severance Agreement.
21.1 List of Subsidiaries.+
- -----------------------------
+ Previously filed.
Exhibit 2.1
FORM OF DISTRIBUTION AGREEMENT
This DISTRIBUTION AGREEMENT is dated as of
December [ ], 1997, between CPC International Inc., a Delaware
corporation ("CPC"), and Corn Products International, Inc., a Delaware
corporation and wholly owned subsidiary of CPC ("Corn Products").
WHEREAS, CPC, directly and acting through its direct
and indirect subsidiaries and affiliates, currently engages in
two principal businesses: (1) a branded foods business, producing
chiefly soups, sauces, bouillons, and related products;
dressings; fresh baked products; starches; desserts; spreads; and
other products marketed through the retail, clubstore, mass
merchandising and foodservice trades (the "Branded Foods
Business"); and (2) a corn refining business, producing a large
variety of food ingredients and industrial products derived from
the wet milling of corn and other farinaceous materials for use
in more than 60 industries, and including the entire business of
Enzyme Bio-Systems Ltd. (the "Corn Refining Business");
WHEREAS, the Board of Directors of CPC has determined
that it is appropriate, desirable and in the best interests of
CPC, Corn Products, the holders of shares of common stock, par
value $0.25 per share, of CPC (the "CPC Common Stock") and the
respective businesses, to separate from CPC the worldwide assets
relating to the Corn Refining Business, and to cause such assets
to be owned and such business to be conducted, directly or
indirectly, by an independent, publicly-traded company;
WHEREAS, in order to effect such separation, the Board
of Directors of CPC has determined that it is appropriate,
desirable and in the best interests of CPC, Corn Products, the
holders of CPC Common Stock and the respective businesses to
transfer the worldwide assets relating to the Corn Refining
Business to Corn Products and then to distribute to the holders
of the CPC Common Stock, without consideration being paid by such
holders, all the outstanding shares of common stock, par value
$0.01 per share, of Corn Products, together with the appurtenant
preferred stock purchase rights (the "Corn Products Common
Stock"), in a transaction that qualifies under Section 355 and
Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as
amended;
WHEREAS, CPC and Corn Products desire to allocate and
transfer such assets, and to allocate and assign responsibility
for certain liabilities relating to the Corn Refining Business,
between the parties based upon their needs and activities; and
WHEREAS, CPC and Corn Products desire to set forth the
principal corporate transactions required to effect such
Distribution (as defined herein) and to set forth other
agreements that will govern certain other matters following the
Distribution.
NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained in this Agreement,
the parties hereby agree as follows:
ARTICLE I. DISTRIBUTION TRANSACTIONS AND RELATED AGREEMENTS
SECTION 1.1. Certain Distribution Transactions.
(a) Asset Transfers. On or prior to the Distribution Date,
or thereafter as specifically stated on Schedule 1.1(a)(1):
(i) CPC shall, on behalf of itself and its Subsidiaries,
transfer or cause to be transferred to Corn
Products or another member of the Corn
Products Group effective prior to or as of
the Effective Time all of CPC's and its
Subsidiaries' right, title and interest in
the Corn Products Assets (except for (A) such
Assets to be transferred at a later time as
specified on Schedule 1.1(a)(1), which may be
updated by mutual agreement of the parties at
any time prior to the Distribution Date, and
(B) those Assets listed or described on
Schedule 1.1(a)(2)).
(ii) Corn Products shall, on behalf of itself and
its Subsidiaries, transfer or cause to be
transferred to CPC or another member of the
CPC Group effective prior to or as of the
Effective Time all of Corn Products' and its
Subsidiaries' right, title and interest, if
any, in the CPC Assets.
(b) Charter; By-laws; Rights Plan. The
Certificate of Incorporation and By-laws and the Rights Agreement
filed by Corn Products with the SEC as exhibits to the Form 10
shall be the Certificate of Incorporation and By-laws and the
Rights Agreement in effect on the Distribution Date.
(c) Directors. The individuals identified in the
Information Statement as directors of Corn Products shall be the
directors of Corn Products on the Distribution Date.
(d) Certain Licenses and Permits. Without
limiting the generality of the obligations set forth in Section
1.1(a), on or prior to the Distribution Date or as soon as
reasonably practicable thereafter (except as specified on
Schedule 1.1(a)(1)):
(i) All licenses, permits, approvals, emission reduction
credits and authorizations issued by any
Governmental Entity set forth on Schedule
1.1(d) (collectively, the "Corn Products
Permits") shall be duly and validly
transferred or caused to be transferred by
CPC to the appropriate member of the Corn
Products Group. To the extent any Corn
Products Permit is not transferable, CPC
shall obtain new licenses, permits or
authorizations in the name of an appropriate
member of the Corn Products Group prior to
the Distribution Date or as soon as
reasonably practicable thereafter.
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(ii) Any transferable licenses, permits and
authorizations issued by Governmental
Authorities which relate primarily to the CPC
Business but which are held in the name of
any member of the Corn Products Group, or in
the name of any employee, officer, director,
stockholder, or agent of any such member, or
otherwise, on behalf of a member of the CPC
Group shall be duly and validly transferred
or caused to be transferred by Corn Products
to the appropriate member of the CPC Group.
(e) Transfer of Agreements. Without limiting the
generality of the obligations set forth in Section 1.1(a):
(i) CPC hereby agrees that on or prior to the Distribution
Date or as soon as reasonably practicable
thereafter, subject to the limitations set
forth in this Section 1.1(e), it will, and it
will cause each member of the CPC Group to,
assign, transfer and convey to the
appropriate member of the Corn Products Group
all of CPC's or such member of the CPC
Group's respective right, title and interest
in and to any and all Corn Products Contracts
(except for such Corn Products Contracts to
be transferred at a later time as specified
on Schedule 1.1(a)(1)).
(ii) Corn Products hereby agrees that on or prior to the
Distribution Date or as soon as reasonably
practicable thereafter, subject to the
limitations set forth in this Section 1.1(e),
it will, and it will cause each member of the
Corn Products Group to, assign, transfer and
convey to the appropriate member of the CPC
Group all of Corn Products' or such member of
the Corn Products Group's respective right,
title and interest in and to any and all CPC
Contracts.
(iii) Subject to the provisions of this Section
1.1(e), any agreement to which any of the
parties hereto or any of their Subsidiaries
is a party that inures to the benefit of both
the CPC Business and Corn Products Business
shall, to the extent possible, be assigned in
part so that each party shall be entitled to
the rights and benefits inuring to its
business under such agreement.
(iv) The assignee of any agreement assigned, in whole
or in part, hereunder (an "Assignee") shall
assume and agree to pay, perform, and fully
discharge all obligations of the assignor
under such agreement or, in the case of a
partial assignment under paragraph (e)(iii),
such Assignee's related portion of such
obligations as determined in accordance with
the terms of the relevant agreement, where
determinable on the face thereof, and
otherwise as determined
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in accordance with the practice of the
parties prior to the Distribution.
(v) Notwithstanding anything in this Agreement to the
contrary, this Agreement shall not constitute
an agreement to assign any agreement, in
whole or in part, or any rights thereunder if
the agreement to assign or attempt to assign,
without the consent of a third party, would
constitute a breach thereof or in any way
adversely affect the rights of the assignor
or Assignee thereof. Until such consent is
obtained, or if an attempted assignment
thereof would be ineffective or would
adversely affect the rights of any party
hereto so that the intended Assignee would
not, in fact, receive all such rights, the
parties will cooperate with each other in any
arrangement designed to provide for the
intended Assignee the benefits of (or in the
case of any agreement subject to clause (iii)
above, the portion of such benefits), and to
permit the intended Assignee to assume the
Liabilities (or the appropriate portion
thereof) under, any such agreement.
(f) Consents. The parties hereto shall use their
commercially reasonable efforts to obtain required consents for
transfer and/or assignment of licenses, permits and
authorizations of Governmental Authorities and of agreements
hereunder.
(g) Other Transactions. Except as specified on
Schedule 1.1(a)(1), on or prior to the Distribution Date, each of
CPC and Corn Products shall have consummated (i) the transactions
specified on the list of pre-Distribution reorganization steps
set forth in Schedule 1.1(g) and (ii) those other transactions in
connection with the Distribution that are described in or
contemplated by the Information Statement and the ruling (the
"Ruling") granted by the Internal Revenue Service in connection
with the Distribution, as well as the transactions described in
the ruling request submissions by CPC to the Internal Revenue
Service insofar as the Ruling is premised on the completion of
such transactions, and not specifically referred to in
subparagraphs (a) - (f) above.
(h) Pollution Control Bonds; Industrial Revenue
Bonds. Pursuant to the terms of the Lease Assumption, CPC will
assign its leasehold interests in certain real and personal
property located in Summit/Argo, Illinois which are subject to
the terms of the Pollution Control Bonds set forth on Schedule
1.1(h)(1). Corn Products shall comply with the terms and
conditions of, and covenants and agreements set forth in, the
Lease Assumption. With respect to the Corn Products Assets that
are subject to the Industrial Revenue Bonds and related documents
set forth on Schedule 1.1(h)(2) hereto, Corn Products agrees that
upon transfer of the Projects (as defined in the applicable
documents) to Corn Products, it will comply with the terms and
conditions of the documents described in Schedule 1.1(h)(2); and
acknowledges that the interest on the Industrial Revenue Bonds is
intended to be tax-exempt to the bondholders for purposes of U.S.
federal income taxation. In addition, Corn Products covenants
that (i) so long as the applicable Industrial Revenue Bonds are
outstanding, Corn Products will use and operate each
4
Project as a "project" within the meaning of the applicable law
identified in the documents described in Schedule 1.1(h)(2),
including any amendments and supplements to such laws, and (ii)
Corn Products will not cause the use of the Project to be changed
to a use, or take or authorize or permit any action, that would
result in any interest paid on such bonds to be included in the
gross income of any holder thereof for purposes of U.S. federal
income taxation. Corn Products shall notify CPC 90 days prior to
the disposition or change in ownership of any Project, or the
occurrence of any circumstances which may result in a change in
the use of any Project that would cause any interest paid on such
bonds to be included in the gross income of any holder for
purposes of U.S. federal income taxation.
SECTION 1.2. Treatment of Intercompany Accounts. All
intercompany receivables, payables and loans (other than
receivables, payables and loans otherwise specifically provided
for hereunder or under any Ancillary Agreement, including
payables created or required hereby or by any Ancillary
Agreement), including, without limitation, in respect of any cash
balances, any cash balances representing deposited checks or
drafts for which only a provisional credit has been allowed or
any cash held in any centralized cash management system, between
any member of the Corn Products Group, on the one hand, and any
member of the CPC Group, on the other hand, which exist and are
reflected in the accounting records of the parties shall, to the
extent practicable, be paid or settled prior to the Distribution
Date, and otherwise thereafter, in the ordinary course of
business in a manner consistent with the payment or settlement of
similar accounts arising from transactions with third parties.
SECTION 1.3. Liabilities.
(a) Assumptions and Satisfaction of Liabilities.
Except as otherwise specifically set forth in any Ancillary
Agreement, from and after the Effective Time, (i) CPC shall cause
an appropriate member of the CPC Group to assume, pay, perform
and discharge each CPC Liability and (ii) Corn Products shall
cause an appropriate member of the Corn Products Group to assume,
pay, perform and discharge each Corn Products Liability. To the
extent reasonably requested to do so by the other party hereto,
each party hereto agrees to sign, or to cause the appropriate
member of the CPC Group or the Corn Products Group to sign, such
documents, in a form reasonably satisfactory to the other party,
as may be reasonably necessary to evidence the assumption of any
Liabilities hereunder.
(b) Transaction Liabilities. For purposes of this
Agreement, including Article III hereof, CPC agrees with Corn
Products that (i) any and all Liabilities arising from or based
upon misstatements in or omissions from the Form 10 or the
Information Statement and (ii) except as otherwise provided in
any Ancillary Agreement, any and all Liabilities otherwise
arising out of the transactions contemplated by this Agreement
(including any stock transfer taxes or real estate transfer taxes
relating to the pre-Distribution separation of the Corn Refining
Business from the CPC Business) in order to effectuate the
Distribution, including the worldwide separation of the Corn
Products Business from the CPC Business (except for any
liabilities with respect to any other Tax, the treatment of which
shall be governed by the Tax Indemnification Agreement and the
Tax Sharing Agreement), shall be deemed to be CPC Liabilities and
not Corn Products Liabilities.
5
SECTION 1.4. Resignations. Except as described in the
Information Statement or as otherwise agreed between the parties,
CPC shall cause all of its employees to resign, effective as of
the Effective Time, from all positions as officers or directors
of any member of the Corn Products Group in which they serve, and
Corn Products shall cause all of its employees to resign,
effective as of the Effective Time, from all positions as
officers or directors of any member of the CPC Group in which
they serve.
SECTION 1.5. Further Assurances. In case at any time
after the Effective Time any further action is reasonably
necessary or desirable to carry out the purposes of this
Agreement and the Ancillary Agreements, the proper officers of
each party to this Agreement shall take all such necessary
action. Without limiting the foregoing, CPC and Corn Products
shall use their commercially reasonable efforts promptly to
obtain all consents and approvals, to enter into all amendatory
agreements and to make all filings and applications that may be
required for the consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements, including, without
limitation, all applicable governmental and regulatory filings.
SECTION 1.6. Limitation on Representations and
Warranties. Each of the parties hereto agrees that no party
hereto is, in this Agreement or in any other agreement or
document contemplated by this Agreement or otherwise, making any
representation or warranty whatsoever, as to title or value of
Assets being transferred. It is also agreed that, notwithstanding
anything to the contrary otherwise expressly provided in a
relevant Conveyancing and Assumption Instrument, all Assets
either transferred to or retained by the parties, as the case may
be, shall be "as is, where is" and that (subject to Section 1.5)
the party to which such Assets are to be transferred hereunder
shall bear the economic and legal risk that such party's or any
of the Subsidiaries' title to any such Assets shall be other than
good and marketable and free from encumbrances. Similarly, each
party hereto agrees that, except as otherwise expressly provided
in the relevant Conveyancing and Assumption Instrument, no party
hereto is representing or warranting in any way that the
obtaining of any consents or approvals, the execution and
delivery of any amendatory agreements and the making of any
filings or applications contemplated by this Agreement will
satisfy the provisions of any or all applicable agreements or the
requirements of any or all applicable laws or judgments, it being
agreed that the party to which any Assets are transferred shall
bear the economic and legal risk that any necessary consents or
approvals are not obtained or that any requirements of laws or
judgments are not complied with.
SECTION 1.7. Guarantees; Security Interests.
(a) Except as otherwise specified in any
Ancillary Agreement, CPC and Corn Products shall use their
commercially reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, any
member of the CPC Group removed as guarantor of or obligor for
any Corn Products Liability, including, without limitation, in
respect of those guarantees set forth on Schedule 1.7(a). CPC and
Corn Products shall use commercially reasonable efforts to
remove, or cause the removal of, any liens on, or other security
interests in, CPC Assets, which security interests arise
primarily from Corn Products Liabilities.
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(b) Except as otherwise specified in any
Ancillary Agreement, CPC and Corn Products shall use their
commercially reasonable efforts to have, on or prior to the
Distribution Date, or as soon as practicable thereafter, any
member of the Corn Products Group removed as guarantor of or
obligor for any CPC Liability. Corn Products and CPC shall use
commercially reasonable efforts to remove, or cause the removal
of, any liens on, or other security interests in, Corn Products
Assets, which security interests arise primarily from CPC
Liabilities.
(c) If CPC or Corn Products is unable to obtain,
or to cause to be obtained, any such required removal as set
forth in clauses (a) and (b) of this Section 1.7, the applicable
guarantor or obligor shall continue to be bound as such and,
unless not permitted by law or the terms thereof, the relevant
beneficiary shall or shall cause one of its Subsidiaries, as
agent or subcontractor for such guarantor or obligor to pay,
perform and discharge fully all the obligations or other
liabilities of such guarantor or obligor thereunder from and
after the date hereof. To the extent any member of the CPC Group
or any member of the Corn Products Group is required to pay or
expend any amount which it would not have been required to pay or
expend if the parties hereto had been able to obtain such
required removal as set forth in clauses (a) and (b) of this
Section 1.7, (i) Corn Products shall cause the appropriate member
of the Corn Products Group or (ii) CPC shall cause the
appropriate member of the CPC Group to reimburse the applicable
member of the CPC Group or the Corn Products Group, as the case
may be, for such amount.
SECTION 1.8. Witness Services. At all times from and
after the Distribution Date, CPC and Corn Products shall use
their commercially reasonable efforts to make available to the
other, upon reasonable written request, its and its Subsidiaries'
then current officers, directors, employees and agents as
witnesses to the extent that (i) such persons may reasonably be
required in connection with the prosecution or defense of any
Action in which the requesting party may from time to time be
involved and (ii) there is no conflict in the Action between the
requesting party and CPC or Corn Products, as applicable. A party
providing witness services to the other party under this Section
shall be entitled to receive from the recipient of such services,
upon the presentation of invoices therefor, payments for such
amounts, relating to disbursements and other out-of-pocket
expenses (which shall be deemed to exclude the costs of salaries
and benefits of employees who are witnesses), as may be
reasonably incurred in providing such witness services.
SECTION 1.9. Transfers Not Effected Prior to the
Distribution; Transfers Deemed Effective as of the Distribution
Date. To the extent that any transfers discussed in this Article
I shall not have been consummated on or prior to the Distribution
Date, the parties shall cooperate to effect such transfers as
promptly following the Distribution Date as shall be practicable.
Nothing herein shall be deemed to require the transfer of any
Assets or the assumption of any Liabilities which by their terms,
operation of law or agreement of the parties cannot or will not
be transferred on or prior to the Distribution Date; provided,
however, that the parties hereto and their respective
Subsidiaries shall cooperate to obtain any necessary consents or
approvals for the transfer of all Assets and Liabilities
contemplated to be transferred pursuant to this Article I. In the
event that any such transfer of Assets or Liabilities has not
been
7
consummated, from and after the Distribution Date, the party
retaining such Asset or Liability shall hold such Asset in trust
for the use and benefit of the party entitled thereto (at the
expense and under the management and direction of the party
entitled thereto) or retain such Liability for the account of the
party by whom such Liability is to be assumed pursuant hereto, as
the case may be, and take such other action as may be reasonably
requested by the party to whom such Asset is to be transferred,
or by whom such Liability is to be assumed, as the case may be,
in order to place such party, insofar as is reasonably possible,
in the same position as would have existed had such Asset or
Liability been transferred as contemplated hereby. As and when
any such Asset or Liability becomes transferable, such transfer
shall be effected forthwith. The parties agree that, as of the
Distribution Date, each party hereto shall be deemed to have
acquired complete and sole beneficial ownership over all of the
Assets, together with all rights, powers and privileges incident
thereto, and shall be deemed to have assumed in accordance with
the terms of this Agreement all of the Liabilities, and all
duties, obligations and responsibilities incident thereto, which
such party is entitled to acquire or required to assume pursuant
to the terms of this Agreement.
SECTION 1.10. Conveyancing and Assumption Instruments.
In connection with the transfers of Assets and the assumptions of
Liabilities contemplated by this Agreement, the parties shall
execute or cause to be executed by the appropriate entities
Conveyancing and Assumption Instruments in such form as the
parties shall reasonably agree, including the transfer of real
property with deeds as may be appropriate. The transfer of
capital stock shall be effected by means of delivery of stock
certificates and executed stock powers and notation on the stock
record books of the corporation or other legal entities involved,
or by such other means as may be required or permitted in any
jurisdiction to transfer title to stock and, to the extent
required by applicable law, by notation on public registries.
SECTION 1.11. Ancillary Agreements. Prior to the
Distribution Date, CPC and Corn Products shall enter into, and/or
(where applicable) shall cause members of their respective Groups
to enter into, the Ancillary Agreements and any other agreements
in respect of the Distribution reasonably necessary or
appropriate in connection with the transactions contemplated
hereby and thereby.
SECTION 1.12. Corporate Names.
(a) Except as otherwise specifically provided in
any Ancillary Agreement:
(i) as soon as reasonably practicable after the
Distribution Date but in any event within one
year thereafter, Corn Products will, at its
own expense, remove (or, if necessary, on an
interim basis, cover up) any and all exterior
signs and other identifiers located on any of
Corn Products' property or premises or on the
property or premises used by Corn Products or
its Subsidiaries (except property or premises
to be shared with CPC or its Subsidiaries
after the Distribution) which refer or
pertain to CPC or which include the CPC name,
logo or any
8
other trademark or the name of any member of
the CPC Group or any other CPC intellectual
property; and
(ii) as soon as is reasonably practicable after the
Distribution Date but in any event within one
year thereafter, Corn Products will, and will
cause its Subsidiaries to, remove from all
packaging materials, letterhead, envelopes,
invoices and other communications media of
any kind, all references to CPC, including
the CPC name, logo and any other trademark or
name of any member of the CPC Group or any
other CPC intellectual property (except that
Corn Products shall not be required to take
any such action with respect to materials in
the possession of customers and Corn Products
may, until the first anniversary of the
Distribution Date, continue to use existing
stock and supplies), and neither Corn
Products nor any of its Subsidiaries shall
use or display the CPC name, logo or other
trademarks or name of any member of the CPC
Group or any other CPC intellectual property
without the prior written consent of CPC.
(b) Except as otherwise specifically provided in
any Ancillary Agreement:
(i) as soon as reasonably practicable after the
Distribution Date but in any event within one
year thereafter, CPC will, at its own
expense, remove (or, if necessary, on an
interim basis, cover up) any and all exterior
signs and other identifiers located on any of
CPC's property or premises or on the property
or premises used by CPC or its Subsidiaries
(except property or premises to be shared
with Corn Products or its Subsidiaries after
the Distribution) which refer or pertain to
Corn Products or which include the Corn
Products name, logo or any other trademark or
the name of any member of the Corn Products
Group or any other Corn Products intellectual
property; and
(ii) as soon as is reasonably practicable after the
Distribution Date but in any event within one
year thereafter, CPC will, and will cause its
Subsidiaries to, remove from all packaging
materials, letterhead, envelopes, invoices
and other communications media of any kind,
all references to Corn Products, including
the Corn Products name, logo and any other
trademark or name of any member of the Corn
Products Group or any other Corn Products
intellectual property (except that CPC shall
not be required to take any such action with
respect to materials in the possession of
customers and CPC may, until the first
anniversary of the Distribution Date,
continue to use existing stock and supplies),
and neither CPC nor any of its Subsidiaries
shall use or display the Corn Products name,
logo or other trademarks or name of any
member of the Corn Products
9
Group or any other Corn Products intellectual
property without the prior written consent of
Corn Products.
(c) Corn Products shall use its reasonable best
efforts to cause Arancia to (i) change its name to delete
reference to CPC; (ii) remove (or, if necessary, on an interim
basis, cover up) any and all exterior signs and other identifiers
located on any of Arancia's property or premises or on the
property or premises used by Arancia or its Subsidiaries (except
property or premises to be shared with CPC or its Subsidiaries
after the Distribution) which refer or pertain to CPC or which
include the CPC name, logo or any other trademark or the name of
any member of the CPC Group or any other CPC intellectual
property and (iii) remove from all letterhead, envelopes,
invoices and other communications media of any kind, all
references to CPC, including the CPC name, logo and any other
trademark or name of any member of the CPC Group or any other CPC
intellectual property.
(d) Each party acknowledges that it has no
interest in nor any right to use or display the name or any
trademark or intellectual property of the other party in any way,
except to the extent specifically provided herein or in any
Ancillary Agreement.
SECTION 1.13. Insurance.
(a) Effective as of the Effective Time, Corn
Products shall be responsible for having in place and maintaining
an insurance program for the Corn Products Group.
(b) To the extent any Insurance Proceeds are
actually received by CPC or any member of the CPC Group after the
Effective Time with respect to a loss of, or damage to, Corn
Products Assets prior to the Effective Time (including any
Insurance Proceeds with respect to continuing business
interruption experienced by the Corn Products Business after the
Effective Time), CPC shall, or shall cause the appropriate member
of the CPC Group to, remit such Insurance Proceeds (less any
Taxes on the excess of the Insurance Proceeds over the Tax
deduction, if any, in respect of the loss or damage resulting in
the receipt of such Insurance Proceeds and less any expenses
incurred by CPC or any member of the CPC Group to obtain such
Insurance Proceeds, to the extent not reimbursed by the
appropriate insurance carrier) to Corn Products or the member of
the Corn Products Group designated by Corn Products; provided,
however, that CPC shall not be required to remit any Insurance
Proceeds to any member of the Corn Products Group with respect to
business interruption to the Corn Products Business prior to the
Effective Time. To the extent CPC receives Insurance Proceeds
with respect to loss of, or damage to, both Corn Products Assets
and CPC Assets prior to the Effective Time and the allocation
thereof is not identified by the insurance carrier, CPC and Corn
Products shall share such Insurance Proceeds in proportion to the
relative value of the lost or damaged Assets (taking into account
the business interruption resulting from such loss or damage).
CPC shall, or shall cause an appropriate member of the CPC Group
to, take commercially reasonable steps to recover any Insurance
Proceeds payable with respect to loss of, or damage to, Corn
Products Assets.
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ARTICLE II. THE DISTRIBUTION
SECTION 2.1. Issuance of Shares to CPC. Corn Products
shall, in consideration for the contribution by CPC of the assets
of the Corn Refining Business to the Company pursuant hereto,
issue to CPC, for further distribution to the stockholders of
CPC, a number of shares of Corn Products Common Stock equal to
(A) the quotient of (x) the number of shares of CPC Common Stock
outstanding on the Distribution Record Date minus the sum of (i)
the number of restricted shares of CPC Common Stock outstanding
on the Distribution Record Date and (ii) the number of shares of
CPC Common Stock held by the Rabbi Trusts on the Distribution
Record Date divided by (y) four (4), minus (B) one hundred (100).
SECTION 2.2. Record Date and Distribution Date.
Subject to the satisfaction of the conditions set forth in this
Agreement, the Board of Directors of CPC, in its sole discretion
and consistent with this Agreement, shall establish the
Distribution Record Date and the Distribution Date and any
appropriate procedures in connection with the Distribution.
SECTION 2.3. The Agent. Prior to the Distribution
Date, CPC shall enter into an agreement with the Agent providing
for, among other things, the payment of the Distribution to the
holders of CPC Common Stock in accordance with this Article II.
SECTION 2.4. Delivery of Share Certificates to the
Agent. Prior to the Distribution Date, CPC shall inform the Agent
of the number of shares of Corn Products Common Stock to be
distributed in connection with the payment of the Distribution
and, at or prior to the Effective Time, CPC shall deliver to the
Agent a share certificate representing all of the then
outstanding shares of Corn Products Common Stock owned by CPC.
Corn Products shall provide the Agent with all share certificates
and any information that the Agent shall require in order to
effect the Distribution. All shares of Corn Products Common Stock
issued in the Distribution shall be duly authorized, validly
issued, fully paid and nonassessable.
SECTION 2.5. The Distribution.
(a) Subject to Sections 2.5(b) and 2.5(c) and to
the other terms and conditions of this Agreement, CPC shall
instruct the Agent to distribute, as of the Distribution Date,
one share of Corn Products Common Stock in respect of every four
shares of CPC Common Stock held by holders of record of CPC
Common Stock on the Distribution Record Date.
(b) No distribution of Corn Products Common Stock
shall be made with respect to shares of restricted CPC Common
Stock issued pursuant to the Stock Plans. As permitted by the
Stock Plans, in lieu of such distribution, the number of shares
of restricted CPC Common Stock held by each person who is an
employee of the CPC Group on the day following the Effective Date
shall be adjusted by multiplying the number of shares held by
such employee on the Distribution Record Date by a fraction, the
numerator of which is the average of the high and low prices of
CPC Common Stock on the NYSE for each of the ten trading days
immediately prior to the first day on which there is trading in
CPC Common Stock on a post-Distribution basis and the denominator
of which is the average of the high and low prices of CPC Common
Stock on the NYSE for each of the ten trading days beginning on
the first day on which there is trading in
11
CPC Common Stock on a post-Distribution basis; provided, however,
that no adjustment shall be made if the foregoing fraction yields
a result which is less than one (1). Shares of restricted CPC
Common Stock held by each person who is an employee of the Corn
Products Group on the day after the Effective Date shall be
converted into restricted shares of Corn Products Common Stock
pursuant to the Employee Benefits Agreement.
(c) No distribution of Corn Products Common Stock
shall be made with respect to shares of CPC Common Stock owned by
the Rabbi Trusts if the Rabbi Trusts shall have waived the right
to receive such distribution. In lieu of such distribution, and
in consideration for such waiver, CPC shall issue and deliver
additional shares of CPC Common Stock to the extent necessary
such that the number of shares of CPC Common Stock held by the
Rabbi Trusts after the Distribution shall be equal to the number
obtained by multiplying the number of shares held by the Rabbi
Trusts on the Distribution Record Date by a fraction, the
numerator of which is the average of the high and low prices of
CPC Common Stock on the NYSE for each of the ten trading days
immediately prior to the first day on which there is trading in
CPC Common Stock on a post-Distribution basis and the denominator
of which is the average of the high and low prices of CPC Common
Stock on the NYSE for each of the ten trading days beginning on
the first day on which there is trading in CPC Common Stock on a
post-Distribution basis; provided, however, that no adjustment
shall be made if the foregoing fraction yields a result which is
less than one (1).
SECTION 2.6. Fractional Shares.
(a) Notwithstanding anything in this Agreement to
the contrary, no fractional shares of Corn Products Common Stock
shall be issued in connection with the Distribution, and any such
fractional share interests to which a holder of CPC Common Stock
would otherwise be entitled will not entitle such stockholder to
vote or to any rights of a stockholder of Corn Products. In lieu
of any such fractional shares, each stockholder who, but for the
provisions of this Section, would be entitled to receive a
fractional share interest of Corn Products Common Stock shall be
paid cash, without any interest thereon, as hereinafter provided.
CPC shall instruct the Agent to determine the number of whole
shares and fractional interests of Corn Products Common Stock
allocable to each holder of CPC Common Stock (a) to determine the
number of whole shares and fractional shares of Corn Products
Common Stock allocable to each holder of record of CPC Common
Stock outstanding on the Distribution Record Date; (b) to
aggregate all such fractional shares into whole shares and sell
on a when issued basis the whole shares obtained thereby in the
open market as soon as practicable following the Distribution
Record Date and (c) as soon as practicable following the
Distribution Date, to distribute to each holder of CPC Common
Stock to which fractional shares of Corn Products Common Stock
have been allocated such holder's ratable share of the net
proceeds from such sale, after making appropriate deductions of
the amount required, if any, for federal income tax withholding
purposes and after deducting any applicable transfer taxes. All
brokers' fees and commissions incurred in connection with such
sales shall be paid by CPC.
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(b) Solely for purposes of computing fractional
share interests pursuant to this Section 2.6, the beneficial
owner of shares of CPC Common Stock held of record in the name of
a nominee will be treated as the holder of record of such shares.
ARTICLE III. INDEMNIFICATION AND RELEASE OF PRE-CLOSING CLAIMS
SECTION 3.1. Indemnification by CPC. Except as
otherwise specifically set forth in any provision of this
Agreement or of any Ancillary Agreement, CPC shall cause the
appropriate member of the CPC Group to indemnify, defend and hold
harmless the Corn Products Indemnitees from and against any and
all Indemnifiable Losses of the Corn Products Indemnitees arising
out of, by reason of or otherwise in connection with the CPC
Liabilities or alleged CPC Liabilities, including any breach by
CPC of any provision of this Agreement or any Ancillary Agreement
(less any Insurance Proceeds received by the Corn Products
Indemnitees in respect thereof).
SECTION 3.2. Indemnification by Corn Products. Except
as otherwise specifically set forth in any provision of this
Agreement or of any Ancillary Agreement, Corn Products shall
cause the appropriate member of the Corn Products Group to
indemnify, defend and hold harmless the CPC Indemnitees from and
against any and all Indemnifiable Losses of the CPC Indemnitees
arising out of, by reason of or otherwise in connection with the
Corn Products Liabilities or alleged Corn Products Liabilities,
including any breach by Corn Products of any provision of this
Agreement or any Ancillary Agreement (less any Insurance Proceeds
received by the CPC Indemnitees in respect thereof).
SECTION 3.3. Procedures for Indemnification.
(a) Third Party Claims. If a claim or demand is
made against a CPC Indemnitee or a Corn Products Indemnitee
(each, an "Indemnitee") by any person who is not a party to this
Agreement or any Subsidiary of such person (a "Third Party
Claim") as to which such Indemnitee may be entitled to
indemnification pursuant to this Agreement, such Indemnitee shall
notify the party which is or may be required pursuant to Section
3.1 or Section 3.2 hereof to make such indemnification (the
"Indemnifying Party") in writing, and in reasonable detail, of
the Third Party Claim promptly (and in any event within 15
business days) after receipt by such Indemnitee of written notice
of the Third Party Claim; provided, however, that failure to give
such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have
been actually prejudiced as a result of such failure (except that
the Indemnifying Party shall not be liable for any expenses
incurred during the period in which the Indemnitee failed to give
such notice). Thereafter, the Indemnitee shall deliver to the
Indemnifying Party, promptly (and in any event within five
business days) after the Indemnitee's receipt thereof, copies of
all notices and documents (including court papers) received by
the Indemnitee relating to the Third Party Claim.
If a Third Party Claim is made against an
Indemnitee, the Indemnifying Party shall be entitled to
participate in the defense thereof and, if it so chooses and
acknowledges
13
in writing its obligation to indemnify the Indemnitee therefor,
to assume the defense thereof with counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnitee.
Should the Indemnifying Party so elect to assume the defense of a
Third Party Claim, the Indemnifying Party shall, within 30 days
(or sooner if the nature of the Third Party Claim so requires),
notify the Indemnitee of its intent to do so, and the
Indemnifying Party shall thereafter not be liable to the
Indemnitee for legal or other expenses subsequently incurred by
the Indemnitee in connection with the defense thereof; provided,
that the Indemnitee shall have the right to employ separate
counsel if, in the Indemnitee's reasonable judgment, a conflict
of interest between the Indemnitee and the Indemnifying Party
exists in respect of such claim which would make representation
of both parties by one counsel inappropriate, and in such event
the fees and expenses of such separate counsel shall be paid by
the Indemnifying Party. If the Indemnifying Party assumes such
defense, the Indemnitee shall have the right to participate in
the defense thereof and to employ counsel, subject to the proviso
of the preceding sentence, at its own expense, separate from the
counsel employed by the Indemnifying Party, it being understood
that the Indemnifying Party shall control such defense. The
Indemnifying Party shall be liable for the fees and expenses of
counsel employed by the Indemnitee for any period during which
the Indemnifying Party has failed to assume the defense thereof
(other than during the period prior to the time the Indemnitee
shall have given notice of the Third Party Claim as provided
above). If the Indemnifying Party so elects to assume the defense
of any Third Party Claim, all of the Indemnitees shall cooperate
with the Indemnifying Party in the defense or prosecution
thereof, including by providing or causing to be provided,
Records and witnesses as soon as reasonably practicable after
receiving any request therefor from or on behalf of the
Indemnifying Party.
If the Indemnifying Party acknowledges in writing
its obligation to indemnify the Indemnitee with respect to a
Third Party Claim, then in no event will the Indemnitee admit any
liability with respect to, or settle, compromise or discharge,
any such Third Party Claim without the Indemnifying Party's prior
written consent; provided, however, that the Indemnitee shall
have the right to settle, compromise or discharge such Third
Party Claim without the consent of the Indemnifying Party if the
Indemnitee releases the Indemnifying Party from its
indemnification obligation hereunder with respect to such Third
Party Claim and such settlement, compromise or discharge would
not otherwise adversely affect the Indemnifying Party. If the
Indemnifying Party acknowledges in writing its obligation to
indemnify the Indemnitee with respect to a Third Party Claim, the
Indemnitee will agree to any settlement, compromise or discharge
of a Third Party Claim that the Indemnifying Party may recommend
and that by its terms obligates the Indemnifying Party to pay the
full amount of the liability in connection with such Third Party
Claim and releases the Indemnitee completely in connection with
such Third Party Claim and that would not otherwise adversely
affect the Indemnitee; provided, however, that the Indemnitee may
refuse to agree to any such settlement, compromise or discharge
if the Indemnitee agrees that the Indemnifying Party's
indemnification obligation with respect to such Third Party Claim
shall not exceed the amount that would be required to be paid by
or on behalf of the Indemnifying Party in connection with such
settlement, compromise or discharge. If an Indemnifying Party
elects not to assume the defense of a Third Party Claim, or fails
to notify an Indemnitee of its election to do so as provided
herein, such Indemnitee may compromise, settle or defend such
Third Party Claim.
14
Notwithstanding the foregoing, the Indemnifying
Party shall not be entitled to assume the defense of any Third
Party Claim (and shall be liable for the reasonable fees and
expenses of counsel incurred by the Indemnitee in defending such
Third Party Claim) if the Third Party Claim seeks an order,
injunction or other equitable relief or relief for other than
money damages against the Indemnitee which the Indemnitee
reasonably determines, after conferring with its counsel, cannot
be separated from any related claim for money damages. If such
equitable relief or other relief portion of the Third Party Claim
can be so separated from that for money damages, the Indemnifying
Party shall be entitled to assume the defense of the portion
relating to money damages.
(b) In the event of payment by an Indemnifying
Party to any Indemnitee in connection with any Third Party Claim,
such Indemnifying Party shall be subrogated to and shall stand in
the place of such Indemnitee as to any events or circumstances in
respect of which such Indemnitee may have any right or claim
relating to such Third-Party Claim against any claimant or
plaintiff asserting such Third Party Claim. Such Indemnitee shall
cooperate with such Indemnifying Party in a reasonable manner,
and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right or claim.
(c) The remedies provided in this Article III
shall be cumulative and shall not preclude assertion by any
Indemnitee of any other rights or the seeking of any and all
other remedies against any Indemnifying Party.
SECTION 3.4. Indemnification Payments. Indemnification
required by this Article III shall be made by periodic payments
of the amount thereof during the course of the investigation or
defense, as and when bills are received or loss, liability,
claim, damage or expense is incurred.
ARTICLE IV. ACCESS TO INFORMATION
SECTION 4.1. Provision of Corporate Records.
(a) Other than in circumstances in which
indemnification is sought pursuant to Article III (in which event
the provisions of such Article will govern), after the
Distribution Date, upon the prior written request by Corn
Products for specific and identified agreements, documents,
books, records, data, files or other information (collectively,
"Records") which relate to (x) Corn Products or the conduct of
the Corn Products Business, as the case may be, prior to the
Effective Time, or (y) any Ancillary Agreement to which CPC and
Corn Products are parties, as applicable, CPC shall arrange, as
soon as reasonably practicable following the receipt of such
request, for the provision of appropriate copies of such Records
(or the originals thereof if Corn Products has a reasonable need
for such originals) in the possession or control of CPC or any of
its Subsidiaries, but only to the extent such items are not
already in the possession or control of Corn Products.
(b) Other than in circumstances in which
indemnification is sought pursuant to Article III (in which event
the provisions of such Article will govern), after the
Distribution Date, upon the prior written request by CPC for
specific and identified Records
15
which relate to (x) CPC or the conduct of the CPC Business, as
the case may be, prior to the Effective Time, or (y) any
Ancillary Agreement to which Corn Products and CPC are parties,
as applicable, Corn Products shall arrange, as soon as reasonably
practicable following the receipt of such request, for the
provision of appropriate copies of such Records (or the originals
thereof if CPC has a reasonable need for such originals) in the
possession or control of Corn Products or any of its
Subsidiaries, but only to the extent such items are not already
in the possession or control of CPC.
SECTION 4.2. Access to Information by CPC and Corn
Products. Other than in circumstances in which indemnification is
sought pursuant to Article III (in which event the provisions of
such Article will govern), from and after the Distribution Date,
each of CPC and Corn Products shall afford to the other and its
authorized accountants, counsel and other designated
representatives reasonable access during normal business hours,
subject to appropriate restrictions for classified, privileged or
confidential information, to the personnel, properties, books and
records of such party and its Subsidiaries insofar as such access
is reasonably required by the other party and relates to (x) such
other party or the conduct of its business prior to the Effective
Date or (y) any Ancillary Agreement to which each of the party
requesting such access and the party requested to grant such
access are parties.
SECTION 4.3. Reimbursement; Other Matters. Except to
the extent otherwise contemplated by any Ancillary Agreement, a
party providing Records or access to information to the other
party under this Article IV shall be entitled to receive from the
recipient, upon the presentation of invoices therefor, payments
for such amounts, relating to supplies, disbursements and other
out-of-pocket expenses, as may be reasonably incurred in
providing such Records or access to information.
SECTION 4.4. Confidentiality. Except as required in
connection with the Information Statement and Corn Products'
Registration Statement on Form 10, each of (i) CPC and its
Subsidiaries and (ii) Corn Products and its Subsidiaries, shall
not, for seven years following the Distribution Date, use or
permit the use of (without the prior written consent of the
other) and shall keep, and shall cause its consultants and
advisors to keep, confidential all information concerning the
other parties in its possession, its custody or under its control
(except to the extent that (A) such information has been in the
public domain through no fault of such party or (B) such
information has been later lawfully acquired from other sources
by such party or (C) this Agreement or any other Ancillary
Agreement or any other agreement entered into pursuant hereto
permits the use or disclosure of such information) to the extent
such information (w) relates to or was acquired during the period
prior to the Effective Time, (x) relates to any Ancillary
Agreement, (y) is obtained in the course of performing services
for the other party pursuant to any Ancillary Agreement, or (z)
is based upon or is derived from information described in the
preceding clauses (w), (x) or (y) and each party shall not
(without the prior written consent of the other) otherwise
release or disclose such information to any other person, except
such party's auditors and attorneys. In the event any member of
the CPC Group or any member of the Corn Products Group is
requested or required (by oral questions, interrogatories,
requests for information or documents, subpoena, or judicial,
administrative or similar process) to disclose any confidential
information, CPC or Corn Products, as the case may be, will, or
will
16
cause such member to, provide Corn Products or CPC, as
applicable, with prompt notice of such request(s) so that it may
seek an appropriate protective order or other appropriate remedy
and/or waive compliance with the provisions of this Section 4.4.
In the event that such protective order or other remedy is not
obtained, or a waiver is granted hereunder, the party required to
provide confidential information shall disclose that information
(and only that information) which, in the written opinion of
counsel, it is legally compelled to disclose and will exercise
its reasonable best efforts to obtain reliable assurance that
confidential treatment will be accorded the information so
furnished.
SECTION 4.5. Privileged Matters. The parties hereto
recognize that legal and other professional services that have
been and will be provided prior to the Distribution Date have
been and will be rendered for the benefit of each of the members
of the CPC Group and of the Corn Products Group, and that each of
the members of the CPC Group and of the Corn Products Group
should be deemed to be the client for the purposes of asserting
all privileges which may be asserted under applicable law. To
allocate the interests of each party in the information as to
which any party is entitled to assert a privilege, the parties
agree as follows:
(a) CPC shall be entitled, in perpetuity, to
control the assertion or waiver of all privileges in connection
with privileged information which relates solely to the CPC
Business, whether or not the privileged information is in the
possession of or under the control of CPC or Corn Products. CPC
shall also be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged
information that relates solely to the subject matter of any
claims constituting CPC Liabilities, now pending or which may be
asserted in the future, in any lawsuits or other proceedings
initiated against or by CPC, whether or not the privileged
information is in the possession of or under the control of CPC
or Corn Products.
(b) Corn Products shall be entitled, in
perpetuity, to control the assertion or waiver of all privileges
in connection with privileged information which relates solely to
the Corn Products Business, whether or not the privileged
information is in the possession of or under the control of Corn
Products or CPC. Corn Products shall also be entitled, in
perpetuity, to control the assertion or waiver of all privileges
in connection with privileged information which relates solely to
the subject matter of any claims constituting Corn Products
Liabilities, now pending or which may be asserted in the future,
in any lawsuits or other proceedings initiated against or by Corn
Products, whether or not the privileged information is in the
possession of or under the control of Corn Products or CPC.
(c) The parties hereto agree that they shall have
a shared privilege, with equal right to assert, subject to the
restrictions in this Section 4.5, with respect to all privileges
not allocated pursuant to the terms of Sections 4.5(a) and (b);
provided, that the written consent of both parties is required to
waive any privilege deemed to be a shared privilege hereunder.
All privileges relating to any claims, proceedings, litigation,
disputes, or other matters which involve both CPC and Corn
Products in respect of which both parties retain any
responsibility or liability under this Agreement, shall be
subject to a shared privilege among them.
17
(d) No party hereto may waive any privilege which
could be asserted under any applicable law, and in which any
other party hereto has a shared privilege, without the consent of
the other party, except to the extent reasonably required in
connection with any litigation with third parties or as provided
in subsection (e) below. Consent shall be in writing, or shall be
deemed to be granted unless written objection is made within
twenty (20) days after notice from the party requesting such
consent.
(e) In the event of any litigation or dispute
exclusively between or among the parties hereto, any party and a
Subsidiary of the other party hereto, or a Subsidiary of one
party hereto and a Subsidiary of the other party hereto, either
such party may waive a privilege in which the other party has a
shared privilege, without obtaining the consent of the other
party, provided that such waiver of a shared privilege shall be
effective only as to the use of information with respect to the
litigation or dispute between the relevant parties and/or their
Subsidiaries, and shall not operate as a waiver of the shared
privilege with respect to third parties.
(f) If a dispute arises between or among the
parties hereto or their respective Subsidiaries regarding whether
a privilege should be waived to protect or advance the interest
of any party, each party agrees that it shall negotiate in good
faith, shall endeavor to minimize any prejudice to the rights of
the other parties, and shall not unreasonably withhold consent to
any request for waiver by another party. Each party hereto
specifically agrees that it will not withhold consent to waiver
for any purpose except to protect its own legitimate interests.
(g) Upon receipt by any party hereto or by any
Subsidiary thereof of any subpoena, discovery or other request
which arguably calls for the production or disclosure of
information subject to a shared privilege or as to which another
party has the sole right hereunder to assert a privilege, or if
any party obtains knowledge that any of its or any of its
Subsidiaries' current or former directors, officers, agents or
employees has received any subpoena, discovery or other requests
which arguably calls for the production or disclosure of such
privileged information, such party shall promptly notify the
other party or parties of the existence of the request and shall
provide the other party or parties a reasonable opportunity to
review the information and to assert any rights it or they may
have under this Section 4.5 or otherwise to prevent the
production or disclosure of such privileged information.
(h) The transfer of all Records and other
information pursuant to this Agreement is made in reliance on the
agreement of CPC and Corn Products, as set forth in Sections 4.4
and 4.5, to maintain the confidentiality of confidential or
privileged information and to assert and maintain all applicable
privileges. The access to information being granted pursuant to
Sections 4.1 and 4.2 hereof, the agreement to provide witnesses
and individuals pursuant to Sections 1.8 and 3.3 hereof, the
furnishing of notices and documents and other cooperative efforts
contemplated by Section 3.3 hereof, and the transfer of
privileged information between and among the parties and their
respective Subsidiaries pursuant to this Agreement shall not be
deemed a waiver of any privilege that has been or may be asserted
under this Agreement or otherwise.
18
SECTION 4.6. Ownership of Information. Any information
owned by one party or any of its Subsidiaries that is provided to
a requesting party pursuant to Article III or this Article IV
shall be deemed to remain the property of the providing party.
Unless specifically set forth herein, nothing contained in this
Agreement shall be construed as granting or conferring rights of
license or otherwise in any such information.
SECTION 4.7. Limitation of Liability.
(a) Except as specifically provided elsewhere in
this Agreement or in an Ancillary Agreement, no party shall have
any liability to any other party in the event that any
information exchanged or provided pursuant to this Agreement
which is an estimate or forecast, or which is based on an
estimate or forecast, is found to be inaccurate.
(b) No party or any Subsidiary thereof shall have
any liability or claim against any other party or any Subsidiary
of any other party based upon, arising out of or resulting from
any agreement, arrangement, course of dealing or understanding
existing on or prior to the Distribution Date (other than this
Agreement or any Ancillary Agreement) and any such liability or
claim, whether or not in writing, is hereby irrevocably canceled,
released and waived.
SECTION 4.8. Other Agreements Providing for Exchange
of Information. The rights and obligations granted under this
Article IV are subject to any specific limitations,
qualifications or additional provisions on the sharing, exchange
or confidential treatment of information set forth in any
Ancillary Agreement.
SECTION 4.9. Retention of Records.
(a) CPC shall deliver to Corn Products all
Records known, after reasonable inquiry, to be in its control or
possession relating to the assets, liabilities or operations of
the Corn Products Group, the Minority-Investment Companies and
the Corn Products Licensees. Except as otherwise provided in any
Ancillary Agreement or when a longer retention period is
otherwise required by law, each party hereto agrees to retain for
a period consistent with the records retention policy heretofore
applicable as described in Schedule 4.9 hereto, all Records in
its control or possession relating to the assets, liabilities or
operations of the other party hereto or its Subsidiaries;
provided, however, that in the case of any Records relating to
Taxes or to environmental liabilities, such retention period
shall be extended to the expiration of the applicable statute of
limitations (giving effect to any extensions thereof (and the
parties shall notify each other of any such extensions)). After
the expiration of the period during which retention is required,
each party may destroy any such Records.
(b) Notwithstanding the foregoing, in lieu of
retaining any specific Records, CPC or Corn Products may offer in
writing to deliver such Records to the other and, if such offer
is not accepted within 90 days, the offered Records may be
destroyed or otherwise disposed of at any time. If a recipient of
such offer shall request in writing prior to the scheduled date
for such destruction or disposal that any of the Records proposed
to be destroyed or disposed of be delivered to the requesting
party, the party proposing the destruction or disposal
19
shall promptly arrange for the delivery of such of the Records as
was requested (at the cost of the requesting party).
ARTICLE V. ADMINISTRATIVE SERVICES
SECTION 5.1. Performance of Services. Beginning on the
Distribution Date, each party will provide, or cause one or more
of its Subsidiaries to provide, to the other party and its
Subsidiaries such services on such terms as may be set forth in
the Transition Services Agreement. Except as otherwise set forth
in the Transition Services Agreement or any Schedule thereto, the
party that is to provide the services (the "Provider") will use
(and will cause its Subsidiaries to use) commercially reasonable
efforts to provide such services to the other party (the
"Recipient") and its Subsidiaries in a satisfactory and timely
manner and as further specified in such Transition Services
Agreement.
SECTION 5.2. Independence. Unless otherwise agreed in
writing, none of the individuals providing the scheduled services
to the Recipient will be deemed to be employees of the Recipient
for any purpose.
SECTION 5.3. Non-Exclusivity. Nothing in this
Agreement precludes any party from obtaining, in whole or in
part, services of any nature that may be obtainable from the
other party from its own employees or from providers other than
the other party.
ARTICLE VI. DISPUTE RESOLUTION
SECTION 6.1. Negotiation.
(a) The parties shall attempt in good faith to
resolve any Agreement Dispute by negotiation between Samuel C.
Scott (or his successor) on behalf of Corn Products and an
executive vice-president or senior vice-president on behalf of
CPC; provided such negotiations shall not, unless otherwise
agreed by the parties in writing, exceed 45 days from the date on
which the relevant party gave notice of such Agreement Dispute;
provided further that in the event of any mediation or
arbitration in accordance with Section 6.2 hereof, the relevant
parties shall not assert the defenses of statute of limitations
and laches arising for the period beginning after the date the
relevant party gave notice of such Agreement Dispute, and any
contractual time period or deadline under this Agreement or any
Ancillary Agreement to which such Agreement Dispute relates shall
not be deemed to have passed until such Agreement Dispute has
been resolved.
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SECTION 6.2. Mediation and Arbitration.
(a) If an Agreement Dispute involves an amount in
controversy up to $1 million and has not been resolved within 45
days of the date on which notice thereof was first given (or such
longer period as agreed pursuant to Section 6.1), the parties
shall select a neutral third party to resolve such Agreement
Dispute, whose decision shall be binding; provided, that if the
parties cannot agree on a neutral third party, the parties agree
to submit the Agreement Dispute to a neutral third party
designated by the president of the CPR Institute for Dispute
Resolution from the CPR Panels of Neutrals, whose decision shall
be binding. Either party may declare, in good faith, that the
amount in controversy is in excess of $1 million and such
declaration shall govern regardless of whether the amount is
ultimately so determined.
(b) If an Agreement Dispute involves an amount in
controversy in excess of $1 million and has not been resolved
within 45 days of the date on which notice thereof was first
given (or such longer period as agreed pursuant to Section 6.1),
the parties shall endeavor to settle the Agreement Dispute by
mediation under the then current CPR Model Mediation Procedure
for Business Disputes. Unless otherwise agreed, the parties will
select a mediator from the CPR Panels of Neutrals and shall
notify CPR to initiate the selection process. Any Agreement
Dispute involving an amount in controversy in excess of $1
million which has not been resolved by mediation as provided
herein within 45 days of the initiation of such mediation, shall
be settled by arbitration in accordance with the then current CPR
Non-Administered Arbitration Rules (the "Rules") by three
independent and impartial arbitrators, of whom each party shall
appoint one. The arbitration shall be governed by the United
States Arbitration Act, Title 9 U.S.C., and judgment upon the
award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. In the event the arbitration is
initiated by CPC, the place of arbitration shall be Cook County,
Illinois. In the event the arbitration is initiated by Corn
Products, the place of arbitration shall be in Bergen County in
the State of New Jersey.
In resolving any dispute, the parties intend that the
arbitrators apply the substantive laws of the State of New York,
without regard to the choice of law principles thereof. The
parties intend that the provisions to arbitrate set forth herein
be valid, enforceable and irrevocable. The undersigned agree to
comply with any award made in any such arbitration proceedings
that has become final in accordance with the Rules and agree to
enforcement of or entry of judgment upon such award, in
accordance with Section 7.17 hereof, by (i) the United States
District Court for the District of New Jersey (Newark) or if
entry of judgment may not be made in such court for
jurisdictional reasons, in the Superior Court of the State of New
Jersey, Bergen County, in the event the arbitration was initiated
by Corn Products or (ii) the United States District Court for the
Northern District of Illinois or if entry of judgment may not be
made in such court for jurisdictional reasons, in the Illinois
Circuit Court, Cook County Judicial Circuit (Chicago), in the
event the arbitration was initiated by CPC. The arbitrators shall
be entitled, if appropriate, to award any remedy in such
proceedings, including, without limitation, monetary damages,
specific performance and all other forms of legal and equitable
relief; provided, however, the arbitrators shall not be entitled
to award non-compensatory damages, including punitive or
exemplary damages and the parties hereto irrevocably waive
entitlement to any such damages. Without limiting the provisions
of the Rules, unless otherwise agreed in writing by or
21
among the relevant parties or permitted by this Agreement, the
undersigned shall keep confidential all matters relating to the
arbitration or the award, provided such matters may be disclosed
(i) to the extent reasonably necessary in any proceeding brought
to enforce the award or for entry of a judgment upon the award
and (ii) to the extent otherwise required by law. Notwithstanding
Section 15.3 of the Rules, the party other than the prevailing
party (as determined by the arbitrators) in the arbitration shall
be responsible for all of the costs of the arbitration, including
legal fees and other costs specified by Rule 15. Nothing
contained herein is intended to or shall be construed to prevent
any party, in accordance with Rule 12 or otherwise, from applying
to any court of competent jurisdiction solely for a temporary
restraining order or preliminary injunction ("Injunctive Relief")
in connection with the subject matter of any Agreement Disputes;
provided, however, that no party may couple any request, to a
court or otherwise, for Injunctive Relief with a request for
non-injunctive, permanent or non-provisional relief.
SECTION 6.3. Continuity of Service and Performance.
Unless otherwise agreed in writing, the parties will continue to
provide service and honor all other commitments under this
Agreement and each Ancillary Agreement during the course of
dispute resolution pursuant to the provisions of this Article VI
with respect to all matters not subject to such dispute,
controversy or claim.
ARTICLE VII. MISCELLANEOUS
SECTION 7.1. Complete Agreement; Construction. This
Agreement, including the Exhibits and Schedules, the agreements
and arrangements listed on Schedule 1.1(g) and the Ancillary
Agreements constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede all
previous negotiations, commitments and writings with respect to
such subject matter. In the event of any inconsistency between
this Agreement and any Schedule hereto, the Schedule shall
prevail. Other than Section 1.6, Section 4.5 and Article VI,
which shall prevail over any inconsistent or conflicting
provisions in any Ancillary Agreement notwithstanding any other
provisions in this Agreement to the contrary, in the event and to
the extent that there shall be a conflict between the provisions
of this Agreement and the provisions of any Ancillary Agreement,
such Ancillary Agreement shall control.
SECTION 7.2. Ancillary Agreements. Subject to the last
sentence of Section 7.1, this Agreement is not intended to
address, and should not be interpreted to address, the matters
specifically and expressly covered by the Ancillary Agreements.
SECTION 7.3. Counterparts. This Agreement may be
executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective
when one or more such counterparts have been signed by each of
the parties and delivered to the other party.
SECTION 7.4. Survival of Agreements. Except as
otherwise contemplated by this Agreement, all covenants and
agreements of the parties contained in this Agreement shall
survive the Distribution Date.
22
SECTION 7.5. Expenses. Except as otherwise set forth
in this Agreement or any Ancillary Agreement, all costs and
expenses incurred on or prior to the Distribution Date (whether
or not paid on or prior to the Distribution Date) in connection
with the preparation, execution, delivery and implementation of
this Agreement and any Ancillary Agreement, the Information
Statement (including any Registration Statement on Form 10 of
which such Information Statement may be a part) and the
Distribution and the consummation of the transactions
contemplated thereby shall be charged to and paid by CPC. Except
as otherwise set forth in this Agreement or any Ancillary
Agreement, each party shall bear its own costs and expenses
incurred after the Distribution Date. Any amount or expense to be
paid or reimbursed by any party hereto to any other party hereto
shall be so paid or reimbursed promptly after the existence and
amount of such obligation is determined and demand therefor is
made.
SECTION 7.6. Notices. All notices and other
communications hereunder shall be in writing and hand delivered
or mailed by registered or certified mail (return receipt
requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to
the parties at the following addresses (or at such other
addresses for a party as shall be specified by like notice) and
will be deemed given on the date on which such notice is
received:
If to CPC:
CPC International Inc.
International Plaza, P.O. Box 8000
Englewood Cliffs, NJ 07632-9076
Facsimile: (201) 894-2193
Attention: Hanes A. Heller, General Counsel
If to Corn Products:
Corn Products International, Inc.
P.O. Box 345
6500 South Archer Road
Bedford Park, IL 60501-1933
Facsimile: (708) 563-6592
Attention: Marcia E. Doane, General Counsel
SECTION 7.7. Waivers. The failure of any party to
require strict performance by any other party of any provision in
this Agreement will not waive or diminish that party's right to
demand strict performance thereafter of that or any other
provision hereof.
23
SECTION 7.8. Amendments. Subject to the terms of
Section 7.11 hereof, this Agreement may not be modified or
amended except by an agreement in writing signed by each of the
parties hereto.
SECTION 7.9. Assignment.
(a) This Agreement shall not be assignable, in
whole or in part, directly or indirectly, by any party hereto
without the prior written consent of the other parties hereto,
and any attempt to assign any rights or obligations arising under
this Agreement without such consent shall be void.
(b) Corn Products will not distribute to its
stockholders any interest in any Corn Products Business Entity,
by way of a spin-off distribution, split-off or other exchange of
interests in a Corn Products Business Entity for any interest in
Corn Products held by Corn Products stockholders, or any similar
transaction or transactions, unless the distributed Corn Products
Business Entity undertakes to CPC to be jointly and severally
liable for all Corn Products Liabilities hereunder.
SECTION 7.10. Successors and Assigns. The provisions
to this Agreement shall be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors
and permitted assigns.
SECTION 7.11. Termination. This Agreement (including,
without limitation, Article III hereof) may be terminated and the
Distribution may be amended, modified or abandoned at any time
prior to the Effective Time by and in the sole discretion of CPC
without the approval of Corn Products or the stockholders of CPC.
In the event of such termination, no party shall have any
liability of any kind to any other party or any other person.
After the Distribution, this Agreement may not be terminated
except by an agreement in writing signed by the parties;
provided, however, that Article III shall not be terminated or
amended after the Distribution in respect of the third party
beneficiaries thereto without the consent of such persons.
SECTION 7.12. Subsidiaries. Each of the parties hereto
shall cause to be performed, and hereby guarantees the
performance of, all actions, agreements and obligations set forth
herein to be performed by any Subsidiary of such party or by any
entity that is contemplated to be a Subsidiary of such party on
and after the Distribution Date.
SECTION 7.13. Third Party Beneficiaries. Except as
provided in Article III relating to Indemnitees, this Agreement
is solely for the benefit of the parties hereto and their
respective Subsidiaries and Affiliates and should not be deemed
to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
SECTION 7.14. Title and Headings. Titles and headings
to sections herein are inserted for the convenience of reference
only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.
24
SECTION 7.15. Exhibits and Schedules. The Exhibits and
Schedules shall be construed with and as an integral part of this
Agreement to the same extent as if the same had been set forth
verbatim herein.
SECTION 7.16. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED IN THE STATE OF NEW YORK.
SECTION 7.17. Consent to Jurisdiction. Without
limiting the provisions of Article VI hereof, each of the parties
irrevocably submits to the exclusive jurisdiction of (a) the
United States District Court for the District of New Jersey
(Newark) or the Superior Court of the State of New Jersey, Bergen
County, for the purposes of any suit, action or other proceeding
brought by Corn Products and arising out of this Agreement or any
transaction contemplated hereby or (b) the United States District
Court for the Northern District of Illinois or the Illinois
Circuit Court, Cook County Judicial Circuit (Chicago) for the
purposes of any suit, action or other proceeding brought by CPC
and arising out of this Agreement or any transaction contemplated
hereby. Corn Products agrees to commence any action, suit or
proceeding relating hereto that is not required to be submitted
to arbitration pursuant to Article VI hereof either in the United
States District Court for the District of New Jersey (Newark) or
if such suit, action or other proceeding may not be brought in
such court for jurisdictional reasons, in the Superior Court of
the State of New Jersey, Bergen County. CPC agrees to commence
any action, suit or proceeding relating hereto that is not
required to be submitted to arbitration pursuant to Article VI
hereof either in the United States District Court for the
Northern District of Illinois or if such suit, action or other
proceeding may not be brought in such court for jurisdictional
reasons, in the Illinois Circuit Court, Cook County Judicial
Circuit (Chicago). Each of the parties further agrees that
service of any process, summons, notice or document by U.S.
registered mail to such party's respective address set forth
above shall be effective service of process for any such action,
suit or proceeding in New Jersey or Illinois with respect to any
matters to which it has submitted to jurisdiction in this Section
7.17. Each of the parties irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the Superior Court of the State of New
Jersey, Bergen County, (ii) the United States District Court for
the District of New Jersey (Newark), (iii) the Illinois Circuit
Court, Cook County Judicial Circuit (Chicago) or (iv) the United
States District Court for the Northern District of Illinois and
hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in
an inconvenient forum.
SECTION 7.18. Severability. In the event any one or
more of the provisions contained in this Agreement should be held
invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable
provisions.
25
SECTION 7.19. Specific Performance. In the event of
any actual or threatened default in, or breach of, any of the
terms, conditions and provisions of this Agreement or any
Ancillary Agreement, the party or parties who are or are to be
thereby aggrieved shall have the right to specific performance
and injunctive or other equitable relief of its rights under this
Agreement or such Ancillary Agreement, in addition to any and all
other rights and remedies at law or in equity, and all such
rights and remedies shall be cumulative. The parties agree that
the remedies at law for any breach or threatened breach,
including monetary damages, are inadequate compensation for any
loss and that any defense in any action for specific performance
that a remedy at law would be adequate is waived. Any
requirements for the securing or posting of any bond with such
remedy are waived.
SECTION 7.20. Definitions. As used in this Agreement,
the following terms shall have the following meanings:
"Action" shall mean any action, suit,
arbitration, inquiry, proceeding or investigation by or before
any court, any Governmental Authority or any arbitration
tribunal.
"Affiliate" shall mean, when used with respect to
a specified Person, another Person that controls, is controlled
by, or is under common control with the Person specified. As used
herein, "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of
voting securities or other interests, by contract or otherwise.
"Agent" shall mean the distribution agent, which
may be CPC's stock transfer agent, to be appointed by CPC to
distribute the shares of Corn Products Common Stock in the
Distribution.
"Agreement Dispute" shall mean any controversy,
dispute or claim arising out of, in connection with, or in
relation to the interpretation, performance, nonperformance,
validity or breach of this Agreement or any Ancillary Agreement
or otherwise arising out of, or in any way related to this
Agreement, any Ancillary Agreement or the transactions
contemplated hereby or thereby, including, without limitation,
any claim based on contract, tort or statute (but excluding any
controversy, dispute or claim if any third party is a party to
such controversy, dispute or claim).
"Ancillary Agreements" shall mean all of the
written agreements, instruments, assignments or other
arrangements (other than this Agreement) entered into in
connection with the transactions contemplated hereby, including,
without limitation, the Argo Access Agreement, the Conveyancing
and Assumption Instruments, the Debt Agreement, the Employee
Benefits Agreement, the Lease Assumption, the Master Supply
Agreement, the Master License Agreement, the Tax Indemnification
Agreement, the Tax Sharing Agreement, the Transition Services
Agreement and any other agreements executed by both CPC and Corn
Products which provide that they shall be considered "Ancillary
Agreements" pursuant to the provisions of this Agreement.
"Arancia" means Arancia-CPC S.A. de C.V.
26
"Argo Access Agreement" shall mean the Argo
Access Agreement between CPC and Corn Products relating to the
Distribution.
"Assets" shall mean assets, properties and rights
(including goodwill), wherever located (including in the
possession of vendors or other third parties or elsewhere),
whether real, personal, mixed, immovable, tangible, intangible or
contingent, in each case whether or not recorded or reflected or
required to be recorded or reflected on the books and records or
financial statements of any person, including, without
limitation, the following:
(i) all accounting and other books, records and
files whether in paper, microfilm,
microfiche, computer tape or disc, magnetic
tape or any other form;
(ii) all apparatus, computers and other electronic
data processing equipment, fixtures,
machinery, equipment, furniture, office
equipment, automobiles, trucks, aircraft and
other transportation equipment, special and
general tools, test devices, prototypes and
models and other tangible personal property;
(iii) all inventories of materials, parts, raw or
packaging materials, supplies,
work-in-process and finished goods and
products;
(iv) all interests in real property of whatever
nature, including easements, whether as
owner, mortgagee or holder of a Security
Interest in real property, lessor, sublessor,
lessee, sublessee or otherwise;
(v) all interests in any capital stock or other
equity interests of any Subsidiary or any
other Person, all bonds, notes, debentures or
other securities issued by any Subsidiary or
any other Person, all loans, advances or
other extensions of credit or capital
contributions to any Subsidiary or any other
Person and all other investments in
securities of any Person;
(vi) all license agreements, leases of personal
property, open purchase orders for raw or
packaging materials, supplies, parts or
services, unfilled orders for the manufacture
and sale of products and other contracts,
agreements or commitments;
(vii) all deposits, letters of credit and performance
and surety bonds;
(viii) all written technical information, data,
specifications, research and development
information, engineering drawings, operating
and maintenance manuals, and materials and
analyses prepared by consultants and other
third parties;
27
(ix) all domestic and foreign patents, copyrights,
trade names, trademarks, service marks and
registrations and applications for any of the
foregoing, knowhow, formulae, recipes,
formulations, trade secrets, inventions, data
bases, other proprietary information and
licenses from third persons granting the
right to use any of the foregoing;
(x) all computer applications, programs and other
software;
(xi) all cost information, sales and pricing data,
customer prospect lists, supplier records,
customer and supplier lists, customer and
vendor data, correspondence and lists,
product literature, artwork, design,
development and manufacturing files, vendor
and customer drawings, formulations and
specifications, quality records and reports
and other books, records, studies, surveys,
reports, plans and documents;
(xii) all prepaid expenses, trade accounts and other
accounts and notes receivables;
(xiii) all rights under contracts or agreements, all
claims or rights against any Person arising
from the ownership of any asset, all rights
in connection with any bids or offers and all
claims, choses in action or similar rights,
whether accrued or contingent;
(xiv) all rights under insurance policies and all rights
in the nature of insurance, indemnification
or contribution;
(xv) all licenses, permits, approvals, emission
reduction credits and authorizations which
have been issued by any Governmental
Authority;
(xvi) cash or cash equivalents, bank accounts, lock boxes
and other deposit arrangements; and
(xvii) interest rate, currency, commodity or other
swap, collar, cap or other hedging or similar
agreements or arrangements.
"Assignee" shall have the meaning set forth in Section 1.1(e).
"Branded Foods Business" shall have the meaning
set forth in the recitals hereto.
"Business Entity" shall mean any corporation,
partnership, limited liability company, company or other entity,
foreign or domestic, which may legally hold title to Assets.
28
"Code" shall mean the Internal Revenue Code of
1986, as amended, and the Treasury regulations promulgated
thereunder, including any successor legislation.
"Conveyancing and Assumption Instruments" shall
mean, collectively, the various agreements, instruments and other
documents heretofore entered into and to be entered into to
effect the transfer of Assets and the assumption of Liabilities
in the manner contemplated by this Agreement, or otherwise
arising out of or relating to the transactions contemplated by
this Agreement in such form or forms as the parties agree and as
may be required by the laws of the appropriate jurisdictions.
"Corn Products" shall mean Corn Products
International, Inc., a Delaware corporation.
"Corn Products Assets" shall mean:
(i) any and all Assets that have been or are expressly
contemplated to be transferred to Corn
Products or any other member of the Corn
Products Group in connection with the
Distribution pursuant to the terms of this
Agreement, any Ancillary Agreement or the
list of pre-Distribution reorganization
steps set forth in Schedule 1.1(g) hereto
(including any Assets set forth on Schedule
7.20(A) or on any other Schedule hereto or to
an Ancillary Agreement); or
(ii) the ownership interests in (x) those Business
Entities listed on Schedule 7.20(B) (which
shall describe the direct and indirect
ownership interests held by CPC in each such
Business Entity) and (y) the
Minority-Investment Companies;
(iii) any Corn Products Contracts or Corn Products
Permits, any rights or claims arising
thereunder, and any other rights or claims or
contingent rights or claims primarily
relating to or arising from any Corn Products
Asset or the Corn Products Business;
(iv) any Assets reflected on the Corn Products Balance
Sheet or the accounting records supporting
such balance sheet and any Assets acquired by
or for any member of the Corn Products Group
subsequent to the date of such balance sheet
which, had they been so acquired on or before
such date and owned as of such date, would
have been reflected on such balance sheet if
prepared on a consistent basis, subject to
any dispositions of any of such Assets
subsequent to the date of such balance sheet;
(v) any rights to licensing fees arising under or
related to any Corn Products Permits;
29
(vi) the Corn Products patents and trademarks set
forth on Schedule 7.20(C); and
(vii) any and all Assets owned or held immediately prior
to the Distribution Date by CPC or any of its
Subsidiaries primarily relating to the Corn
Products Business. The intention of this
clause (vii) is only to rectify any
inadvertent omission of transfer or
conveyance of any Asset that, had the parties
given specific consideration to such Asset as
of the date hereof, would have otherwise been
classified as a Corn Products Asset. No Asset
shall be deemed to be a Corn Products Asset
solely as a result of this clause (vii) if
such Asset is within the category or type of
Asset expressly covered by an Ancillary
Agreement. In addition, no Asset shall be
deemed a Corn Products Asset solely as a
result of this clause (vii) unless a claim
with respect thereto is made by Corn Products
on or prior to the third anniversary of the
Distribution Date.
Notwithstanding the foregoing, the Corn
Products Assets shall not in any event
include:
(x) the Assets listed or described on Schedule
1.1(a)(2); or
(y) any Assets primarily relating to or
used in any terminated or divested
Business Entity, business or operation
formerly owned or managed by or
associated with Corn Products or any
Corn Products Business, except for
those Assets primarily relating to or
used exclusively in those Business
Entities, businesses or operations
listed on Schedule 7.20(B); or
(z) any and all Assets that are expressly
contemplated by this Agreement or any
Ancillary Agreement (or the Schedules
hereto or thereto) as Assets to be
retained by any member of the CPC
Group.
In the event of any inconsistency or conflict
which may arise in the application or
interpretation of any of the foregoing
provisions, for the purpose of determining
what is and is not a Corn Products Asset, any
item explicitly included on a Schedule
referred to in this definition of "Corn
Products Assets" shall take priority over any
provision of the text hereof.
"Corn Products Balance Sheet" shall mean the
combined balance sheet of the Corn Products Group, including the
notes thereto, as of September 30, 1997 included in the
Information Statement.
30
"Corn Products Business" shall mean (i) the Corn
Refining Business, (ii) the businesses of the members of the Corn
Products Group and the portion of the business of the Corn
Products Licensees and the Minority-Investment Companies
primarily related to the Corn Refining Business, (iii) any other
business conducted primarily through the use of the Corn Products
Assets, and (iv) the businesses of Business Entities acquired or
established by or for Corn Products or any of its Subsidiaries
after the date of this Agreement.
"Corn Products Common Stock" shall have the
meaning set forth in the recitals hereto.
"Corn Products Contracts" shall mean the
following contracts and agreements to which CPC or any of its
Subsidiaries is a party or by which it or any of its Subsidiaries
or any of their respective Assets is bound, whether or not in
writing, except for any such contract or agreement that is
expressly contemplated not to be transferred or assigned by any
member of the CPC Group pursuant to any provision of this
Agreement or any Ancillary Agreement:
(i) any contracts or agreements with a value in
excess of $1 million or with a term of
greater than one year listed or described on
Schedule 7.20(D);
(ii) any contract or agreement entered into in the
name of, or expressly on behalf of, any
division, business unit or member of the Corn
Products Group;
(iii) any contract or agreement that relates primarily
to the Corn Products Business;
(iv) federal, state and local government and other
contracts and agreements that relate
primarily to the Corn Products Business;
(v) any contract or agreement representing
capital or operating equipment lease
obligations reflected on the Corn Products
Balance Sheet;
(vi) any contract or agreement that is otherwise
expressly contemplated pursuant to this
Agreement or any of the Ancillary Agreements
to be assigned to Corn Products or any member
of the Corn Products Group; and
(vii) any guarantee, indemnity, representation or
warranty of any member of the Corn Products
Group.
"Corn Products Group" shall mean Corn Products
and each Business Entity which is contemplated to become a
Subsidiary of Corn Products hereunder, including those identified
on Schedule 7.20(B) hereto. "Corn Products Group" shall not be
deemed to
31
include the Minority-Investment Companies or the Corn Products
Licensees, unless the relevant provision explicitly includes such
entities.
"Corn Products Indemnitees" shall mean Corn
Products, each member of the Corn Products Group, each of their
respective present, former or future directors, officers,
employees and agents, as such, and each of the heirs, executors,
successors and assigns of any of the foregoing.
"Corn Products Insured Claim" shall mean any
claim, asserted against (x) CPC or any of its Subsidiaries with
respect to the Corn Products Assets or the Corn Products Business
(including, without limitation, where CPC or its Subsidiaries are
joint defendants with other Persons) or (y) Corn Products or any
of its Subsidiaries (including, without limitation, where Corn
Products or its Subsidiaries are joint defendants with other
Persons), in each case with respect to any claim, suit, action,
proceeding, injury, loss, liability, damage or expense incurred
or claimed to have been incurred (i) prior to the Effective Time
or (ii) in connection with the conduct of the Corn Products
Business prior to the Effective Time, which claim, suit, action,
proceeding, injury, loss, liability, damage or expense arises out
of an insured occurrence under one or more Policies, except that
if such occurrence is also covered under any insurance policies
issued to Corn Products or its Subsidiaries it shall be deemed a
Corn Products Uninsured Claim.
"Corn Products Liabilities" shall mean:
(i) any and all Liabilities that are expressly
contemplated by this Agreement or any
Ancillary Agreement (or the Schedules hereto
or thereto, including Schedule 7.20(E)
hereto) as Liabilities to be assumed by Corn
Products or any member of the Corn Products
Group, and all agreements, obligations and
Liabilities of any member of the Corn
Products Group under this Agreement or any of
the Ancillary Agreements;
(ii) all Liabilities (other than Taxes and any
employee-related Liabilities), primarily
relating to, arising out of or resulting
from:
(A) the operation of the Corn Products
Business, as conducted at any time (i) prior
to the Effective Time (but excluding any
Liability relating to, arising out of or
resulting from any act or failure to act by
any director, officer, employee, agent or
representative (whether or not such act or
failure to act is or was within such person's
authority)) or (ii) after the Effective Time
(including any Liability relating to, arising
out of or resulting from any act or failure
to act by any director, officer, employee,
agent or representative (whether or not such
act or failure to act is or was within such
person's authority));
32
(B) the operation of any business conducted
by Corn Products or any Subsidiary of Corn
Products at any time after the Effective Time
(including any Liability relating to, arising
out of or resulting from any act or failure
to act by any director, officer, employee,
agent or representative (whether or not such
act or failure to act is or was within such
person's authority)); or
(C) any Corn Products Assets;
whether arising before, on or after the Distribution
Date; and
(iii) all Liabilities reflected as liabilities or
obligations on the Corn Products Balance
Sheet or the accounting records supporting
such balance sheet, and all Liabilities
arising or assumed by or for any member of
the Corn Products Group subsequent to the
date of such balance sheet which, had they
arisen or been assumed on or before such date
and been retained as of such date, would have
been reflected on such balance sheet, subject
to any discharge of such Liabilities
subsequent to the date of the Corn Products
Balance Sheet.
Notwithstanding the foregoing, the Corn Products
Liabilities shall not include:
(x) any Liabilities that are expressly
contemplated by this Agreement or any
Ancillary Agreement (or the Schedules
hereto or thereto) as Liabilities to be
retained or assumed by CPC or any
member of the CPC Group, including
those listed on Schedule 7.20(F);
(y) any Liabilities primarily relating to,
arising out of or resulting from any
terminated or divested Business Entity,
business or operation formerly owned or
managed by or associated with Corn
Products or any Corn Products Business;
any Liabilities which are excluded by
this clause (y) from the definition of
Corn Products Liabilities shall be
deemed to be CPC Liabilities; or
(z) all agreements and obligations of any
member of the CPC Group under this
Agreement or any of the Ancillary
Agreements.
Notwithstanding any provision of this Agreement
to the contrary, the "Corn Products Liabilities" shall (i)
specifically include any Corn Products Uninsured Claims and (ii)
specifically exclude any Corn Products Insured Claims, any
deductible payable by CPC under any Policy in connection with a
Corn Products Insured Claim and any liability in excess of
33
the applicable coverage limits of the applicable Policies with
respect to any Corn Products Insured Claim.
"Corn Products Licensees" shall mean those
entities set forth on Schedule 7.20(G).
"Corn Products Permits" shall have the meaning
set forth in Section 1.1(d) hereof.
"Corn Products Uninsured Claim" shall mean any
claim asserted against CPC, Corn Products or any of their
respective Subsidiaries (including, without limitation, where
CPC, Corn Products or any of their respective Subsidiaries are
joint defendants with other Persons) with respect to any claim,
suit, action, proceeding, injury, loss, liability, damage or
expense incurred or claimed to have been incurred in connection
with the conduct of the Corn Products Business prior to the
Effective Time, which claim, suit, action, proceeding, injury,
loss, liability, damage or expense arises out of an occurrence
(i) of a type for which insurance is not available under any
Policy (without giving effect to coverage limits or deductibles
of any such Policy) or (ii) that is expressly deemed to be a Corn
Products Uninsured Claim under this Agreement.
"Corn Refining Business" shall have the meaning
set forth in the recitals hereto.
"CPC" shall mean CPC International Inc., a
Delaware corporation, or any successor thereto other than Corn
Products or any Subsidiary of Corn Products.
"CPC Assets" shall mean, collectively, all the
rights and Assets owned or held by CPC or any Subsidiary of CPC,
except the Corn Products Assets.
"CPC Business" shall mean each and every business
conducted at any time by CPC or any Subsidiary of CPC except a
Corn Products Business.
"CPC Common Stock" shall have the meaning set forth
in the recitals hereto.
"CPC Contracts" shall mean all the contracts and
agreements to which CPC or any of its Subsidiaries or Affiliates
is a party or by which it or any of its Subsidiaries or
Affiliates is bound, except the Corn Products Contracts.
"CPC Group" shall mean CPC and each person (other
than any member of the Corn Products Group) that is a Subsidiary
of CPC.
"CPC Indemnitees" shall mean CPC, each member of
the CPC Group, each of their respective present, former or future
directors, officers, employees and agents as
34
such, and each of the heirs, executors, successors and assigns of
any of the foregoing, except the Corn Products Indemnitees.
"CPC Liabilities" shall mean collectively, all
obligations and Liabilities of CPC or any Subsidiary of CPC,
except the Corn Products Liabilities. Notwithstanding any
provision of this Agreement to the contrary, the "CPC
Liabilities" shall (i) specifically include any Corn Products
Insured Claims, any deductible borne by any member of the CPC
Group (but not by any member of the Corn Products Group) under
any Policy in connection with a Corn Products Insured Claim and
any liability in excess of the applicable coverage limits of the
applicable Policies with respect to any Corn Products Insured
Claim and (ii) specifically exclude any Corn Products Uninsured
Claim; provided, however, that nothing in this clause shall be
deemed to constitute (or to reflect) an assignment of any Policy
to Corn Products or any member of the Corn Products Group.
"Debt Agreement" shall mean the Debt Agreement
between CPC and Corn Products relating to the Distribution.
"Distribution" shall mean the distribution on the
Distribution Date to holders of record of shares of CPC Common
Stock as of the Distribution Record Date of the Corn Products
Common Stock owned by CPC on the basis of one share of Corn
Products Common Stock for every four shares of CPC Common Stock
outstanding on the Distribution Record Date.
"Distribution Date" shall mean the date
determined by CPC's Board of Directors as the date as of which
the Distribution shall be effected.
"Distribution Record Date" shall mean the date
determined by CPC's Board of Directors as the record date for the
Distribution.
"Effective Time" shall mean 11:59:59 p.m. New York
City Time on the Distribution Date.
"Employee Benefits Agreement" shall mean the
Employee Benefits Agreement between CPC and Corn Products
relating to the Distribution.
"Form 10" shall mean the Registration Statement
on Form 10 filed by Corn Products with the SEC.
"Governmental Authority" shall mean any federal,
state, local, foreign or international court, government,
department, commission, board, bureau, agency, official or other
regulatory, administrative or governmental authority.
"Indemnifiable Losses" shall mean any and all
losses, liabilities, claims, damages, demands, costs or expenses
(including, without limitation, reasonable attorneys' fees and
any and all out-of-pocket expenses) reasonably incurred in
investigating, preparing for or
35
defending against any Actions or potential Actions or in settling
any Action or potential Action or in satisfying any judgment,
fine or penalty rendered in or resulting from any Action.
"Indemnifying Party" shall have the meaning set
forth in Section 3.3.
"Indemnitee" shall have the meaning set forth in
Section 3.3.
"Information Statement" shall mean the
Information Statement sent to the holders of shares of CPC Common
Stock and filed as an exhibit to Corn Products' Form 10 in
connection with the Distribution, including any amendment or
supplement thereto.
"Injunctive Relief" shall have the meaning set forth
in Section 6.2.
"Insurance Proceeds" shall mean those monies (i)
received by an insured from an insurance carrier or (ii) paid by
an insurance carrier on behalf of any insured, in either case net
of any applicable premium adjustment, retrospectively-rated
premium, deductible, retention, or cost of reserve paid or held
by or for the benefit of such insured.
"Lease Assumption" shall mean the Assignment and
Assumption of Portion of Lessee's Interest in Lease between CPC
and Corn Products relating to the Distribution
"Liabilities" shall mean any and all losses,
claims, charges, debts, demands, actions, causes of action,
suits, damages, obligations, payments, costs and expenses,
accounts, reckonings, bonds, specialties, indemnities and similar
obligations, exonerations, covenants, contracts, controversies,
agreements, promises, omissions, variances, guarantees, make
whole agreements and similar obligations, and other liabilities,
including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated,
accrued or unaccrued, known or unknown, whenever arising, and
including those arising under any law, rule, regulation, Action,
threatened or contemplated Action (including the costs and
expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all
costs and expenses, whatsoever reasonably incurred in
investigating, preparing or defending against any such Actions or
threatened or contemplated Actions), order or consent decree of
any Governmental Authority or any award of any arbitrator or
mediator of any kind, and those arising under any contract,
commitment or undertaking, including those arising under this
Agreement or any Ancillary Agreement, in each case, whether or
not recorded or reflected or required to be recorded or reflected
on the books and records or financial statements of any Person.
"Master Supply Agreement" shall mean the Master
Supply Agreement entered into between CPC and Corn Products
relating to the Distribution.
"Master License Agreement" shall mean the Master
License Agreement entered into between CPC and Corn Products
relating to the Distribution.
"Minority-Investment Companies" or
"Minority-Investment Company" shall mean those Business Entities
set forth on Schedule 7.20(H).
36
"NYSE" shall mean the New York Stock Exchange,
Inc.
"Person" shall mean any natural person,
corporation, business trust, joint venture, limited liability
company, association, company, partnership or government, or any
agency or political subdivision thereof.
"Policies" shall mean insurance policies and
insurance contracts of any kind (other than life and benefits
policies or contracts) issued to CPC or any of its Subsidiaries
(other than Subsidiaries that become Subsidiaries of Corn
Products after the Effective Time), including, without
limitation, primary, excess and umbrella policies, comprehensive
general liability policies, director and officer liability,
fiduciary liability, automobile, aircraft, property and casualty,
workers' compensation and employee dishonesty insurance policies,
bonds and self-insurance and captive insurance company
arrangements, together with the rights, benefits and privileges
thereunder.
"Provider" shall have the meaning set forth in
Section 5.1.
"Rabbi Trusts" shall mean the trusts established
pursuant to the CPC International Inc. Latin America Pension Plan
Trust Agreement, dated as of June 1, 1988, by and between CPC and
The Northern Trust Company, as amended; the CPC International
Inc. Pension Plan for International Employees Trust Agreement,
dated as of June 1, 1988, as amended; the CPC International Inc.
Management Incentive Plan Trust Agreement, dated as of June 1,
1988, by and between CPC and The Northern Trust Company, as
amended; the CPC International Inc. Deferred Compensation Plan
for Outside Directors Trust Agreement, dated as of June 1, 1988,
by and between CPC and The Northern Trust Company, as amended;
and the CPC International Inc. Special Retirement Benefits Trust
Agreement, dated as of June 1, 1988, by and between CPC and The
Northern Trust Company, as amended.
"Recipient" shall have the meaning set forth in
Section 5.1.
"Records" shall have the meaning set forth in
Section 4.1.
"Rules" shall have the meaning set forth in
Section 6.2.
"Ruling" shall have the meaning set forth in
Section 1.1(g).
"SEC" shall mean the United States Securities and
Exchange Commission.
"Security Interest" shall mean any mortgage,
security interest, pledge, lien, charge, claim, option, right to
acquire, voting or other restriction, right-of-way, covenant,
condition, easement, encroachment, restriction on transfer, or
other encumbrance of any nature whatsoever.
"Stock Plans" shall mean the CPC International
Inc. 1984 Stock and Performance Plan and the CPC International
Inc. 1993 Stock and Performance Plan.
37
"Subsidiary" of any entity shall mean any
corporation, partnership or other entity of which such entity (i)
owns, directly or indirectly, or has beneficial ownership of,
ownership interests sufficient to elect a majority of the Board
of Directors (or persons performing similar functions)
(irrespective of whether at the time any other class or classes
of ownership interests of such corporation, partnership or other
entity shall or might have such voting power upon the occurrence
of any contingency) or (ii) is a general partner or an entity
performing similar functions.
"Tax" shall have the meaning set forth in the Tax
Sharing Agreement.
"Tax Indemnification Agreement" shall mean the
Tax Indemnification Agreement between CPC and Corn Products
relating to the Distribution.
"Tax Sharing Agreement" shall mean the Tax
Sharing Agreement between CPC and Corn Products relating to the
Distribution.
"Third Party Claim" shall have the meaning set
forth in Section 3.3.
"Transition Services Agreement" shall mean the
Transition Services Agreement between CPC and Corn Products
relating to the Distribution.
SECTION 7.21. References; Interpretation. References
in this Agreement to any gender include references to all
genders, and references to the singular include references to the
plural and vice versa. The words "include", "includes" and
"including" when used in this Agreement shall be deemed to be
followed by the phrase "without limitation". Unless the context
otherwise requires, references in this Agreement to Articles,
Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, such
Agreement. Unless the context otherwise requires, the words
"hereof", "hereby" and "herein" and words of similar meaning when
used in this Agreement refer to this Agreement in its entirety
and not to any particular Article, Section or provision of this
Agreement. The term "commercially reasonable efforts" shall not
be deemed to require any party to take any action that would
require it to pay, in the aggregate with respect to a specific
circumstance, an amount in excess of $5,000 (after subtracting
from such aggregate expenditures any amounts reimbursed by the
other party).
* * *
38
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the day and year first above
written.
CPC INTERNATIONAL INC.
By:________________________________
Name:
Title:
CORN PRODUCTS INTERNATIONAL, INC.
By:________________________________
Name:
Title:
39
Exhibit 4.1
- -----------------------------------------------------------------
CORN PRODUCTS INTERNATIONAL, INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
---------------------
Rights Agreement
Dated as of November 19, 1997
- -----------------------------------------------------------------
Table of Contents
Section Page
1. Certain Definitions.......................................... 1
2. Appointment of Rights Agent.................................. 5
3. Issue of Rights Certificates................................. 5
4. Form of Rights Certificates.................................. 7
5. Countersignature and Registration............................ 8
6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates............... 8
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights .................................. 9
8. Cancellation and Destruction of Rights Certificates......... 11
9. Reservation and Availability of Capital Stock............... 11
10. Preferred Stock Record Date................................. 13
11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights ................... 13
12. Certificate of Adjusted Purchase Price or Number of Shares.. 22
13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power ................................... 22
14. Fractional Rights and Fractional Shares..................... 25
15. Rights of Action............................................ 26
16. Agreement of Rights Holders................................. 27
17. Rights Certificate Holder Not Deemed a Stockholder.......... 27
18. Concerning the Rights Agent................................. 28
19. Merger or Consolidation or Change of Name of Rights Agent... 28
20. Duties of Rights Agent...................................... 29
21. Change of Rights Agent...................................... 31
22. Issuance of New Rights Certificates......................... 31
23. Redemption and Termination.................................. 32
24. Exchange.................................................... 33
25. Notice of Certain Events.................................... 34
26. Notices..................................................... 35
27. Supplements and Amendments.................................. 35
28. Successors.................................................. 36
29. Determinations and Actions by the Board of Directors, etc... 36
30. Benefits of this Agreement.................................. 37
31. Severability................................................ 37
32. Governing Law............................................... 37
33. Counterparts................................................ 37
34. Descriptive Headings........................................ 37
Exhibit A--Certificate of Designation, Preferences and Rights
Exhibit B--Form of Rights Certificates
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 19, 1997 (the
"Agreement"), between Corn Products International, Inc., a
Delaware corporation (the "Company"), and First Chicago Trust
Company of New York, a New York corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on September 19, 1997 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend distribution of one
Right for each share of common stock, par value $0.01 per share,
of the Company (the "Common Stock") outstanding at the close of
business on December 1, 1997 (the "Record Date"), and has
authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section
11(p) hereof) for each share of Common Stock of the Company
issued between the Record Date (whether originally issued or
delivered from the Company's treasury) and, subject to Section 22
hereof, the earlier of the Distribution Date (as defined herein)
and the Expiration Date (as defined herein), each Right initially
representing the right to purchase one one-hundredth of a share
of Series A Junior Participating Preferred Stock of the Company
having the rights, powers and preferences set forth in the
Certificate of Designation, Preferences and Rights attached
hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
defined herein) who or which, together with all Affiliates and
Associates (as such terms are defined herein) of such Person,
shall become the Beneficial Owner (as defined herein) of the
Applicable Percentage (as defined herein) or more of the shares
of Common Stock then outstanding; provided, however, that (A) a
Person shall not become an Acquiring Person if such Person,
together with its Affiliates and Associates, shall become the
Beneficial Owner of the Applicable Percentage of the shares of
Common Stock then outstanding solely as a result of a reduction
in the number of shares of Common Stock outstanding due to the
repurchase of shares of Common Stock by the Company, unless and
until such time as such Person shall purchase or otherwise become
(as a result of actions by such Person or its Affiliates or
Associates) the Beneficial Owner of any additional shares of
Common Stock; (B) "Acquiring Person" shall not include the
Company, any Subsidiary (as defined herein) of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan; and (C) "Acquiring Person" shall not include any
Person who or which becomes the Beneficial Owner of the
Applicable Percentage or more of the outstanding Common Stock but
who acquired beneficial ownership of shares of Common Stock
inadvertently, and such Person promptly (and in any event within
5 Business Days after being so requested by the Company) divests
or enters into an irrevocable commitment
satisfactory to the Company's Board of Directors promptly (and in
any event within 5 Business Days or such shorter period as shall
be determined by the Company's Board of Directors) to divest, and
thereafter divests as required by such commitment, sufficient
shares of Common Stock so that such Person ceases to be a
Beneficial Owner of the Applicable Percentage or more of shares
of Common Stock. Notwithstanding the foregoing, CPC International
Inc. ("CPC") shall not be deemed an Acquiring Person for any
purpose of this Agreement prior to the distribution by CPC of
100% of the Company's outstanding Common Stock to CPC's
stockholders.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended and in effect on the date of this Agreement
(the "Exchange Act").
(c) "Applicable Percentage" shall mean 10% for any
date or period on or prior to December 31, 1999 and 15% for any
date or period thereafter.
(d) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such
Person's Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the
passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant
to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a
Triggering Event (as defined herein), or (C)
securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant
to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights;
(ii) which such Person or any of such
Person's Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under
the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this
subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (A)
arises solely from a revocable proxy given in
2
response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the
applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate
or Associate thereof) with which such Person (or any
of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of
this paragraph (d)) or disposing of any voting
securities of the Company; provided, however, that
nothing in this paragraph (d) shall cause a person
engaged in business as an underwriter of securities to
be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired through such person's
participation in good faith in a firm commitment
underwriting until the expiration of forty days after
the date of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(f) The term "certificate" when used in reference to
Rights, Common Stock or Preferred Stock shall include book-entry
notations evidencing Rights or shares of Common Stock or
Preferred Stock.
(g) "Close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
New York City time, on the next succeeding Business Day.
(h) "Common Stock" shall mean the common stock, par
value $0.01 per share, of the Company, except that "Common Stock"
when used with reference to any Person other than the Company
shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest
having power to control or direct the management, of such Person.
(i) "Person" shall mean any individual, firm, limited
liability company, corporation, partnership, trust or other
entity and shall include any successor (by merger or otherwise)
of such entity.
(j) "Preferred Stock" shall mean shares of Series A
Junior Participating Preferred Stock, par value $0.01 per share,
of the Company and to the extent that there are not a sufficient
number of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other
series of Preferred Stock, par value $0.01 per share, of the
Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior
Participating Preferred Stock.
3
(k) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii)(A) or (B) hereof.
(l) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(m) "Stock Acquisition Date" shall mean the first date
that an Acquiring Person has become such.
(n) "Subsidiary" shall mean, with reference to any
Person, any corporation or other entity of which an amount of
voting securities sufficient to elect at least a majority of the
directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such
Person.
(o) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
(p) The following terms shall have the meanings set
forth for such terms in the Sections indicated below:
Term Section
---- -------
Act 9(c)
Adjustment Shares 11(a)(ii)(B)
Agreement Recitals
Company Recitals as modified by Section 13(b)
Common Stock Equivalents 11(a)(iii)
Current Market Price 11(d)(i) and 11(d)(ii)
Current Value 11(a)(iii)
Distribution Date 3(a)
Exchange Ratio 24(a)
Expiration Date 7(a)
Equivalent Preferred Stock 11(b)
Final Expiration Date 7(a)
NASDAQ 11(d)(i)
Principal Party 13(b)
Purchase Price 7(b) as modified by Sections 11 and 13(a)
Record Date Recitals
Redemption Price 23(a)
Rights Recitals
Rights Agreement Recitals
Rights Certificates 3(a)
Rights Dividend
Declaration Date Recitals
Section 11(a)(ii) Trigger Date 11(a)(iii)
Substitution Period 11(a)(iii)
Spread 11(a)(iii)
Trading Day 11(d)(i)
4
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders
of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable. In the event that the Company
appoints one or more Co-Rights Agents, the respective duties of
the Rights Agent and any Co-Rights Agents shall be as the Company
shall determine.
Section 3. Issue of Rights Certificate.
(a) Until the earlier of (i) the Stock Acquisition
Date and (ii) the close of business on the tenth business day (or
such later date as the Board shall determine prior to such time
as any Person becomes an Acquiring Person) after the date of the
commencement (within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act) of, or the first
public announcement of the intent of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for
or pursuant to the terms of any such plan) to commence, a tender
or exchange offer the consummation of which would result in any
Person becoming an Acquiring Person (the earlier of (i) and (ii)
being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the
Distribution Date, subject to Section 7(e) hereof, the Company
shall prepare and execute, the Rights Agent shall countersign,
and the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the
close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided
herein; provided, however, that in the case of stockholders whose
shares of Common Stock are evidenced by book-entry notations,
such Rights Certificates shall also be evidenced by book-entry
notations and such stockholder shall instead receive an account
statement setting forth the appropriate number of Rights. In the
event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Right Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates (including such book-entry notations)
and may be transferred only by the transfer of the Rights
Certificates as permitted hereby, separately and apart from any
transfer
5
of one or more shares of Common Stock. All references to Rights
Certificates herein shall be deemed to include references to the
corresponding book-entry notations.
(b) With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates for the Common
Stock and the registered holders of the Common Stock shall also
be the registered holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date (as such
term is defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in respect of
which Rights have been issued shall also constitute the transfer
of the Rights associated with such shares of Common Stock. The
Company will mail to any record holder of a Right (including,
prior to the Distribution Date, a record holder of Common Stock)
a copy of this Rights Agreement, without charge, promptly after
receipt of a written request therefor.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from
the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date.
Certificates representing such shares of Common Stock shall also
be deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the
Rights Agreement between Corn Products International,
Inc. (the "Company") and First Chicago Trust Company
of New York (the "Rights Agent") dated as of November
19, 1997, as may be amended (the "Rights Agreement"),
the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.
The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly
after receipt of a written request therefor. Under
certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificates. In the event the Company
purchases or otherwise acquires any shares of its Common Stock
after the Record Date but prior to the Distribution Date, any
Rights associated with such shares shall be deemed canceled and
returned
6
so that the Company shall not be entitled to exercise any Rights
associated with shares of Common Stock that are no longer
outstanding.
Section 4. Form of Rights Certificate.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date (or in
the case of Rights with respect to shares of Common Stock issued
or becoming outstanding after the Record Date, the same date as
the stock certificates evidencing such shares) and on their face
shall entitle the holders thereof to purchase such number of one
one-hundredths of a share of Preferred Stock as shall be set
forth therein at the Purchase Price (as defined herein), but the
amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6, Section 11 or Section 22 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate
are or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby
may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
The Company shall give prompt written notice to the
Rights Agent after becoming aware of the existence and identity
of an Acquiring Person and its Affiliates and
7
Associates and shall notify the Rights Agent in writing which
Rights Certificates are to be so legended. The failure of the
Company to give such notice, or the failure to insert the
foregoing legend on any Rights Certificate or any defect therein,
shall not in any manner whatsoever affect the application or
interpretation of Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President or any
Vice President, either manually or by facsimile signature, and
shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e), Section 14 and Section 24 hereof, at any time after the
close of business on the Distribution Date, and at or prior to
the close of business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like
number of one one-hundredths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities,
cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder
(or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal
office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall
8
be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Company shall
execute and the Rights Agent shall, subject to Section 4(b),
Section 7(e), Section 14 and Section 24 hereof, countersign and
deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights
Certificates.
(b) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company
will execute and deliver a new Rights Certificate of like tenor
to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth
in Section 9(c), Section 11(a)(iii), Section 23(a) and Section 24
hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one one-hundredths of a share
(or other securities, cash or other assets, as the case may be)
as to which such surrendered Rights are then exercisable, at or
prior to the earliest of (i) the close of business on December
31, 2007 (the "Final Expiration Date"), (ii) the date and time at
which the Rights are redeemed as provided in Section 23 hereof,
(iii) the date and time at which the Rights are exchanged as
provided in Section 24 hereof, and (iv) the time at which the
Rights expire pursuant to Section 13(d) hereof (the earliest of
(i), (ii), (iii) and (iv) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right
shall initially be $120.00, and shall be subject to adjustment
from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below (the
"Purchase Price").
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment in
9
cash, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth of a share of Preferred Stock (or
other shares, securities, cash or other assets, as the case may
be) to be purchased as set forth below and an amount equal to any
applicable transfer tax (as determined by the Rights Agent) by
the holder of the Rights Certificate, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i)(A)
requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased and
the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have
elected to deposit the total number of shares of Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made (x) in cash or by certified bank
check or bank draft payable to the order of the Company, or (y)
subject to applicable law, by delivery of a certificate or
certificates (with appropriate stock powers executed in blank
attached thereto) evidencing a number of shares of Common Stock
equal to the then Purchase Price divided by the closing price (as
determined pursuant to Section 11(d) hereof) per share of Common
Stock on the Trading Date (as defined herein) immediately
preceding the date of such exercise. In the event that the
Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights
Agent, if and when appropriate. The Company reserves the right to
require prior to the occurrence of a Triggering Event that, upon
any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise fewer than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof, or the Rights Agent shall place
an appropriate notation on the Rights Certificate with respect to
those Rights exercised.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the Stock Acquisition Date, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any
10
such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person (or any Affiliate or Associate thereof) to
holders of equity interests in such Acquiring Person (or any
Affiliate or Associate thereof) or to any Person with whom the
Acquiring Person (or any Affiliate or Associate thereof) has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e) or of Section 11 or Section 13, or
(iv) a subsequent transferee of any of the foregoing, shall
become null and void without any further action and no holder of
such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof
are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless and until such registered holder shall
have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall,
if surrendered to the Company or any of its agents, be delivered
to the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire,
any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and unissued shares
of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number
11
of shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as
provided in this Agreement including Section 1l(a)(iii) hereof,
will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Act"), with
respect to the securities purchasable upon exercise of the Rights
on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the Expiration
Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction
if the requisite qualification or exemption in such jurisdiction
shall not have been obtained, the exercise thereof shall not be
permitted under applicable law or a registration statement shall
not have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one
one-hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the
12
case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of
one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one
one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights
until such tax shall have been paid (any such tax being payable
by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person
in whose name any certificate for a number of one one-hundredths
of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder
of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights. The Purchase Price, the
number and kind of shares covered by each Right and the number of
Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine or
consolidate the outstanding Preferred Stock into a smaller number
of shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section
7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and
kind of shares of Preferred Stock or capital
13
stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate
number and kind of shares of Preferred Stock or capital stock, as
the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, such holder would
have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall
be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) Subject to Section 24 hereof, in the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after
the date of this Agreement, directly or indirectly,
shall merge into the Company or otherwise combine with
the Company and the Company shall be the continuing or
surviving corporation of such merger or combination
and the Common Stock of the Company shall remain
outstanding and unchanged, or
(B) any Person shall, at any time after the
Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become
an Acquiring Person is an acquisition of shares of
Common Stock pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock at a
price and on terms determined by at least a majority
of the members of the Board of Directors who are not
officers of the Company and who are not
representatives, nominees, Affiliates or Associates of
an Acquiring Person, after receiving advice from one
or more investment banking firms, to be (a) at a price
which is fair to stockholders (taking into account all
factors which such members of the Board deem relevant
including, without limitation, prices which could
reasonably be achieved if the Company or its assets
were sold on an orderly basis designed to realize
maximum value) and (b) otherwise in the best interests
of the Company and its stockholders,
then proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of Common Stock
of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of
one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current
14
Market Price (determined pursuant to Section 11(d) hereof) per
share of Common Stock on the date of such first occurrence (such
number of shares, the "Adjustment Shares"); provided, however, if
the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply
and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall:
(A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a
Right (the "Current Value"), over (2) the Purchase
Price (such excess, the "Spread"), and
(B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of
shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same
value as shares of Common Stock (such shares of
preferred stock, "Common Stock Equivalents")), (4)
debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of
Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected
by the Board of Directors of the Company;
provided, however, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the
15
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is
no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the value
of any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock on such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("Equivalent Preferred Stock")) or securities convertible into
Preferred Stock or Equivalent Preferred Stock at a price per
share of Preferred Stock or per share of Equivalent Preferred
Stock (or having a conversion price per share, if a security
convertible into Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or Equivalent
Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. In case such
subscription price may be paid by delivery of consideration part
or all of which may be in a form other than cash, the value of
such consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. Shares
of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such
rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash
16
(other than a regular quarterly cash dividend out of the earnings
or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of
Preferred Stock on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such
Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock; provided, however, that in
no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such distribution is
not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "Current Market Price" per share of Common Stock on
any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such
Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the
event that the Current Market Price per share of the Common Stock
is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on
such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other
than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, after the ex-dividend
date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in
each such case, the Current Market Price shall be properly
adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of Common Stock
are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the
principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter
17
market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the shares of Common
Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no market
maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board
of Directors of the Company shall be used. The term "Trading Day"
shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or,
if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange but are quoted on
NASDAQ, a day on which NASDAQ is in operation or if the shares of
Common Stock are neither listed nor admitted to trading on any
national securities exchange nor quoted on NASDAQ, a Business
Day. If the Common Stock is not publicly held or not so listed or
traded, "Current Market Price" per share shall mean the fair
value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d),
the "Current Market Price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by
the Current Market Price per share of the Common Stock. If
neither the Common Stock nor the Preferred Stock is publicly held
or so listed or traded, "Current Market Price" per share of the
Preferred Stock shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "Current Market Price" of one
one-hundredth of a share of Preferred Stock shall be equal to the
"Current Market Price" of one share of Preferred Stock divided by
100.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a share of Common Stock or other share or
one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
18
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a share of Preferred
Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right
immediately prior to such adjustment, by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of one one-hundredths of
a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by
the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and
19
upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-hundredth of a
share and the number of one one-hundredths of a share which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated
value, if any, of the number of one one-hundredths of a share of
Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one
one-hundredths of a share of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the number
of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one one-hundredths of
a share of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less
than the Current Market Price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Company
20
in a transaction which complies with Section 11(o) hereof), (ii)
merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the shareholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such other Person shall have executed and delivered
to the Rights Agent a supplemental agreement evidencing
compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section
23, Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, (iii) combine
the outstanding shares of Common Stock into a smaller number of
shares, or (iv) effect a reclassification of its outstanding
Common Stock, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter
but prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to
such event by a fraction the numerator which shall be the total
number of shares of Common Stock outstanding immediately prior to
the occurrence of the event and the denominator of which shall be
the total number of shares of Common Stock outstanding
immediately following the occurrence of such event; provided,
however, that no adjustment shall be made pursuant to this
Section 11(p) as a result of any dividend, subdivision,
combination or reclassification described in (i), (ii), (iii) or
(iv) above prior to the distribution by CPC to its stockholders
of one hundred percent (100%) of the outstanding Common Stock.
The adjustments provided for in this Section 11(p) shall be made
successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected. If an
event occurs which would require an adjustment under Section
11(a)(ii) and this Section 11(p),
21
the adjustments provided in this Section 11(p) shall be in
addition and prior to any adjustment required pursuant to Section
11(a)(ii).
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b)
promptly file with the Rights Agent, and with each transfer agent
for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder
of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common
Stock) in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and
on any adjustment therein contained, and shall not be deemed to
have knowledge of any such adjustment unless and until it shall
have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any wholly-owned Subsidiary of the Company in
one or more transactions each of which complies with Section
11(o) hereof), then, and in each such case, proper provision
shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right
to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid,
non-assessable and freely tradable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of
one one-hundredths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first occurrence of
a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying
the number of such one one-hundredths of a share for which a
Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that
product (which, following the first occurrence of a Section 13
Event, shall be referred to as
22
the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined
pursuant to Section 11(d)(i) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of Section
13(a): (A) the Person that is the issuer of any
securities into which shares of Common Stock of the
Company are converted in such merger or consolidation,
or, if there is more than one such Person, the Person
the Common Stock of which has the greatest aggregate
market value or (B) if no securities are so issued,
the Person that is the other party to such merger or
consolidation, or, if there is more than one such
Person, the Person the Common Stock of which has the
greatest aggregate market value (including, if
applicable, the Company if it is the surviving
corporation); and
(ii) in the case of any transaction
described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power
transferred pursuant to such transaction or
transactions, or, if the Person receiving the greatest
portion of the assets or earning power cannot be
determined, whichever of such Persons which is the
issuer of Common Stock having the greatest aggregate
market value;
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stock
of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market
value; and (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as
if such Person were a "Subsidiary" of both
23
or all of such joint ventures and the Principal Parties in each
such chain shall bear the obligations set forth in this Section
13 in the same ratio as their direct or indirect interests in
such Person bear to the total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and that all rights
of first refusal or preemptive rights in respect of the issuance
of shares of Common Stock of the Principal Party upon exercise of
the outstanding Rights have been waived and that such transaction
shall not result in a default by the Principal Party under this
Agreement, and further providing that, as soon as practicable
after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal
Party at its own expense will:
(i) prepare and file a registration
statement under the Act, with respect to the Rights
and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A)
become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at
all times meeting the requirements of the Act) until
the Expiration Date;
(ii) deliver to holders of the Rights
historical financial statements for the Principal
Party and each of its Affiliates which comply in all
respects with the requirements for registration on
Form 10 under the Exchange Act;
(iii) use its best efforts to qualify or
register the Rights and the securities purchasable
upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate;
and
(iv) use its best efforts to list (or
continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on a national
securities exchange or to meet the eligibility
requirement for quotation on NASDAQ.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 1l(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, the foregoing provisions of this Section 13 shall not
be applicable to a transaction described in subparagraphs (x) and
(y) of Section 13(a) if (i) such transaction is consummated with
a Person or Persons who acquired shares of Common Stock pursuant
to a tender offer or exchange offer for all outstanding
24
shares of Common Stock which complies with the provisions of
Section 11(a)(ii)(B) hereof (or a wholly owned subsidiary of any
such Person or Persons), (ii) the price per share of Common Stock
offered in such transaction is not less than the price per share
of Common Stock paid to all holders of shares of Common Stock
whose shares were purchased pursuant to such tender offer or
exchange offer and (iii) the form of consideration being offered
to the remaining holders of shares of Common Stock pursuant to
such transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by this Section
13(d), all Rights hereunder shall expire.
(e) In case the Principal Party which is to be a party
to a transaction referred to in this Section 13 has any provision
in any of its authorized securities or in its Certificate of
Incorporation or By-laws or other instrument governing its
corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as
a consequence of, the consummation of a transaction referred to
in this Section 13, shares of Common Stock of such Principal
Party at less than the then Current Market Price per share
(determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such
Principal Party at less than such then Current Market Price
(other than to holders of Rights pursuant to this Section 13) or
(ii) providing for any special payment, tax or similar provisions
in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13, then,
in such event, the Company shall not consummate any such
transaction unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or
amended, or that the authorized securities shall be redeemed, so
that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed
transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or
25
admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights the fair value
of the Rights on such date as determined in good faith by the
Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock that are not integral
multiples of one one-hundredth of a share of Preferred Stock, the
Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market
value of one one-hundredth of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of one
one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock
(as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one (1) share
of Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the
Rights expressly waives such holder's right to receive any
fractional Rights or any fractional shares upon exercise of a
Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, other than the rights of action given
to the Rights Agent under Sections 18 and 20 hereof, are vested
in the respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to
exercise the Rights
26
evidenced by such Rights Certificate in the manner provided in
such Rights Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder
of a Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of one one-hundredths of a share
of Preferred Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to
27
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have
been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any Rights Certificate or
certificate for Preferred Stock, Common Stock or for other
securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
28
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of
"Current Market Price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Rights Certificates or be required to
verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 7(e) hereof) or any adjustment
required under the provisions of Section 11, Section 13 or
Section 24 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment
29
(except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any shares of Common Stock or Preferred Stock to be issued
pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or Preferred Stock will, when
so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President,
any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
30
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit such holder's Rights Certificate for
inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business
under the laws of the United States or of the State of New York
(or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution
in the State of New York), in good standing, having a principal
office in the State of New York, which is authorized under such
laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state
authority and which corporation or the parent corporation thereof
has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $50,000,000. After appointment,
the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred
Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificate.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or
31
exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would
be issued, and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have
occurred prior to the Record Date, the close of business on the
Record Date), or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption
price of $0.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the "Current
Market Price," as defined in Section 11(d)(i) hereof, of the
Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors of the
Company.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23, evidence of which
shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates
may redeem, acquire or purchase any Rights at any time in any
manner (i) other than that specifically set forth in this Section
23 or in Section 24 hereof, and (ii) other than in connection
with the repurchase of Common Stock of the Company prior to the
Distribution Date.
(c) In the event that the Board of Directors adopts an
effective resolution ordering the redemption of the Rights in
compliance with Section 23(a), the Company may, at its option,
discharge all of its obligations with respect to the Rights by
(i) issuing a press release
32
announcing the manner of redemption of the Rights in accordance
with this Agreement and (ii) mailing payment of the Redemption
Price to the registered holders of the Rights at their last
addresses as they appear on the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books
of the transfer agent of the Common Stock, and upon such action,
all outstanding Rights and Right Certificates shall be null and
void without any further action by the Company.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after the Stock Acquisition Date exchange all
or part of the then-outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Stock (or Common
Stock Equivalents) at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date of the distribution by CPC to its stockholders of one
hundred percent (100%) of the outstanding Common Stock (such
exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors of
the Company shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan or employee
stock plan of the Company or any such Subsidiary, or any entity
holding Common Stock as a fiduciary for or pursuant to the terms
of any such employee benefit plan or employee stock plan),
together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Stock
then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of Rights pursuant
to and in compliance with subsection (a) of this Section 24 and
without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights, which excludes Rights that
have become void pursuant to the provisions of Section 7(e)
hereof, shall be to receive that number of shares of Common
Stock, or Common Stock Equivalents, equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly file notice of such Board action with the
Rights Agent and give public notice of any such exchange;
provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The
Company shall promptly mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of
the Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e)) held by each holder
of Rights.
(c) In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized
but unissued to permit any exchange of Rights as
33
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required, pursuant to
this Section 24, to issue fractions of shares of Common Stock or
to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock,
the Company shall pay to the registered holders of the Right
Certificates, with regard to which such fractional shares of
Common Stock would otherwise be issuable, an amount in cash equal
to the same fraction of the Current Market Price of a whole share
of Common Stock. For the purposes of this paragraph (d), the
Current Market Price of a whole share of Common Stock shall be
the closing price of a share of Common Stock (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange
pursuant to this Section 24, and the value of any Common Stock
Equivalent shall be deemed to have the same Current Market Price
as the Common Stock on such date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make
any other distribution to the holders of Preferred Stock, other
than a regular quarterly cash dividend out of earnings or
retained earnings of the Company, or (ii) to offer to the holders
of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by
the holders of the shares of Preferred Stock whichever shall be
the earlier.
34
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 7(e) and Section
11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer
to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Corn Products International, Inc.
P.O. Box 345
6500 South Archer Road
Bedford Park, Illinois 60501-1933
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
First Chicago Trust Company of New York
525 Washington Boulevard
Suite 4660
Jersey City, New Jersey 07310
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendment. Prior to the
Stock Acquisition Date and subject to the penultimate sentence of
this Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Stock
Acquisition Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective
35
or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change
or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, this Agreement may
not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the
Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the
Redemption Price, the Final Expiration Date, the Purchase Price
or the number of one one-hundredths of a share of Preferred Stock
for which a Right is exercisable, provided, however, that at any
time prior to (i) the existence of an Acquiring Person or (ii)
the date that a tender or exchange offer by any Person (other
than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or
any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first
commenced within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner
of the Applicable Percentage or more of the shares of Common
Stock then outstanding, the Board of Directors of the Company may
amend this Agreement to increase the Purchase Price. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Stock.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Determination and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of
Directors of the Company in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
36
holders of the Rights and all other parties, and (y) not subject
the Board to any liability to the holders of the Rights or to any
other Person.
Section 30. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors of the Company. Without
limiting the foregoing, if any provision requiring that a
determination be made by less than the entire Board of Directors
of the Company (or at a time or with the concurrence of a group
of Directors consisting of less than the entire Board) is held by
a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination shall then be
made by the Board of Directors of the Company in accordance with
applicable law and the Company's Certificate of Incorporation and
By-laws.
Section 32. Governing Law. This Agreement, each Right
and each Rights Certificate issued hereunder shall be deemed to
be a contract made under the laws of the State of Delaware and
for all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts made and to
be performed entirely within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
37
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
Attest: CORN PRODUCTS INTERNATIONAL,
INC.
By:_______________________ By:_______________________
Name: Name:
Title: Title:
Attest: FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By:_______________________ By:_______________________
Name: Name:
Title: Title:
38
Exhibit A
---------
FORM OF DESIGNATION,
PREFERENCES AND RIGHTS OF SERIES A
JUNIOR PARTICIPATING PREFERRED STOCK
of
CORN PRODUCTS INTERNATIONAL, INC.
SECTION 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such
series shall initially be 600,000, par value $0.01 per share,
such number of shares to be subject to increase or decrease by
action of the Board of Directors as evidenced by a certificate of
designation; provided, however, that no such decrease shall
reduce the number of authorized shares of the Series A Junior
Participating Preferred Stock to a number less than the number of
shares of the Series A Junior Participating Preferred Stock then
outstanding plus the number of shares of the Series A Junior
Participating Preferred Stock then reserved for issuance upon the
exercise of any outstanding options, warrants or rights or the
exercise of any conversion or exchange privilege contained in any
outstanding securities issued by the Corporation.
SECTION 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Junior Participating
Preferred Stock with respect to dividends, the holders of shares
of Series A Junior Participating Preferred Stock, in preference
to the holders of the shares of Common Stock, par value $0.01 per
share, of the Corporation (the "Common Stock") and of any other
class of capital stock of the Corporation ranking junior to the
Series A Junior Participating Preferred Stock with respect to
dividends, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of
March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A
Junior Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $5.00
and (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series A Junior Participating
Preferred Stock. In the event the Corporation shall at any time
after September 19, 1997 (the "Rights Declaration Date"), other
than in connection with the distribution (the "Distribution") of
shares of Common Stock to the holders of common stock, par value
$0.25 per share, of CPC International, Inc., (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, or (iv)
effect a reclassification of its outstanding Common Stock, then
in each such case the amount to which holders of shares of Series
A Junior Participating Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare, out of funds
legally available therefor, a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in
paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $5.00 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Participating Preferred
Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series A Junior Participating
Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue and
be cumulative from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of
shares of Series A Junior Participating Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Junior
Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock
entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
SECTION 3. Voting Rights. In addition to any other
voting rights required by applicable law, the holders of shares
of Series A Junior Participating Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior
Participating Preferred Stock shall entitle the holder thereof to
100 votes on all
A-2
matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time after
the Rights Declaration Date, other than in connection with the
Distribution, (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, or (iv) effect a reclassification of
its outstanding Common Stock, then in each such case the number
of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred
Stock, the holders of shares of Common Stock and the holders of
any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in an
amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a
period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly
dividend period on all shares of Series A Junior Participating
Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A
Junior Participating Preferred Stock) with dividends in arrears
in an amount equal to six (6) quarterly dividends thereon, voting
as a class, irrespective of series, shall have the right to elect
two (2) directors.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock may
be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting
of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of
directors shall be exercised unless the holders of ten percent in
number of shares of Preferred Stock outstanding shall be present
in person or by proxy. The absence of a quorum of the holders of
Common Stock shall not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which the
holders of Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have the
right, voting as a class, to elect directors to fill such
vacancies, if any, in the Board of Directors as may then exist up
to two (2) directors or, if such right is exercised at an annual
meeting, to elect two (2) directors. If the number which may be
so elected at any special meeting does not amount to the required
number, the holders of the Preferred Stock shall have the right
to make such increase in the number of directors as shall be
necessary to permit the election by them of the required number.
After the holders of the Preferred Stock shall have exercised
their right to elect directors in any default period and during
the continuance of such period, the number of directors shall not
be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or
A-3
pursuant to the rights of any equity securities ranking senior to
or pari passu with the Series A Junior Participating Preferred
Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect directors, the Board of Directors may order,
or any stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request,
the calling of a special meeting of the holders of Preferred
Stock, which meeting shall thereupon be called by the President,
a Vice-President or the Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this paragraph
(C)(iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to such holder at such
holder's last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier
than 20 days and not later than 60 days after such order or
request or in default of the calling of such meeting within 60
days after such order or request, and notwithstanding Article III
Section 2 of the Corporation's By-laws, such meeting may be
called on similar notice by any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual
meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) directors voting as a
class, after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining directors theretofore elected by the
holders of the class of stock which elected the director whose
office shall have become vacant. References in this paragraph (C)
to directors elected by the holders of a particular class of
stock shall include directors elected by such directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect directors shall cease, (y) the term of any
directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of directors shall be such
number as may be provided for in the Certificate of Incorporation
or By-laws irrespective of any increase made pursuant to the
provisions of paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner
provided by law or in the Certificate of Incorporation or
By-laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may
be filled by a majority of the remaining directors.
(D) Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
A-4
SECTION 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding-up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding-up)
with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding-up) to the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any
stock of the Corporation ranking junior (both as to dividends or
upon dissolution, liquidation or winding-up) to the Series A
Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock, or
any shares of stock ranking on a parity (either as to dividends,
or upon liquidation, dissolution or winding-up) with the Series A
Junior Participating Preferred Stock or redeem any shares of such
parity stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. Reacquired Shares.
Any shares of Series A Junior Participating Preferred
Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after
such purchase or acquisition. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new
A-5
series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
SECTION 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $10.00 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the
holders of shares of Series A Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the
Series A Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in subparagraph (C) below to reflect such
events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full
amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A
Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred
Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with
respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
of all other series of preferred stock, if any, which rank on a
parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time
after the Rights Declaration Date, other than in connection with
the Distribution, (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, or (iv) effect a reclassification of
its outstanding Common Stock, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
A-6
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed into an amount
per share (subject to the provision for adjustment hereinafter
set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall
at any time after the Rights Declaration Date, other than in
connection with the Distribution, (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, or (iv) effect a
reclassification of its outstanding Common Stock, then in each
such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Junior
Participating Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
SECTION 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
SECTION 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series
shall provide otherwise.
SECTION 10. Amendment. The Certificate of
Incorporation of the Corporation shall not be further amended in
any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds (2/3)
or more of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.
SECTION 11. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating
Preferred Stock.
A-7
Exhibit B
---------
Form of Rights Certificate
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER DECEMBER 31, 2007 OR EARLIER IF
REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]*
Rights Certificate
This certifies that , or registered assigns, is the
registered owner of the number of Rights Agreement set forth
above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights dated as November
19, 1997 (the "Rights Agreement"), between Corn Products
International, Inc., a
- -------------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Delaware corporation (the "Company") , and First
Chicago Trust Company of New York, a New York corporation (the
"Rights Agent"), to purchase from the Company at any time prior
to 5:00 P.M. (New York City time) on December 31, 2007 at the
office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-hundredth of
a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $120 per one one-hundredth of a
share (the "Purchase Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The Purchase Price shall be
paid, at the election of the holder, in cash or, subject to
applicable law, in shares of Common Stock of the Company having
an equivalent value. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and
Purchase Price as of _________, 19__ based on the Preferred Stock
as constituted at such date. The Company reserves the right to
require prior to the occurrence of a Triggering Event (as such
term is defined in the Rights Agreement) that a number of Rights
be exercised so that only whole shares of Preferred Stock will be
issued.
Upon the occurrence of a Section 11(a)(ii) Event (as
such term is defined in the Rights Agreement), if the Rights
evidenced by this Rights Certificate are beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an Affiliate
or Associate of an
B-2
Acquiring Person, or (iv) a subsequent transferee of
any of the foregoing, such Rights shall become null and void and
no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares of Preferred Stock or
other securities, which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
B-3
exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be (i) redeemed by the
Company at its option at a redemption price of $.01 per Right
(subject to adjustment as provided in the Rights Agreement) at
any time prior to the earlier of the Stock Acquisition Date (or,
if the Stock Acquisition Date shall have occurred prior to the
Record Date, the close of business on the Record Date) and (y)
the Final Expiration Date or (ii) exchanged, in whole or in part,
for Common Stock or Common Stock Equivalents.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate (and the Rights
Agreement itself) may be amended by action of the Company's Board
of Directors without the approval of the holders of any of the
Rights.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of shares of Preferred Stock or of any other securities of
the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or
B-4
withhold consent to any corporate action, or, to receive notice of
meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned
by the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal.
Dated as of______
ATTEST: CORN PRODUCTS INTERNATIONAL, INC.
____________________ By_____________________________
Secretary Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By_________________________
Authorized Signature
B-5
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED_______________________________________
hereby sells, assigns and transfers unto____________________________
____________________________________________________________________
(Please print name and address of transferee)
____________________________________________________________________
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint __________________ Attorney, to transfer the within
Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated:___________________________
__________________________________
Signature
Signature Guaranteed:
B-6
Certificate
-----------
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:______________________ __________________________
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
B-7
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise Rights represented by the Rights Certificate.)
To: CORN PRODUCTS INTERNATIONAL, INC.:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Rights Certificate to
purchase the shares of Preferred Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any
other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
- -----------------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
B-8
Please insert social security
or other identifying number
- -----------------------------------------------------------------
(Please print name and address)
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Dated:_____________________
_____________________________
Signature
Signature Guaranteed:
B-9
Certificate
-----------
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated:___________________ _____________________________
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
B-10
Exhibit 4.2
CERTIFICATE OF DESIGNATION
OF THE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
CORN PRODUCTS INTERNATIONAL, INC.
-----------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
-----------------------
The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors of Corn
Products International, Inc., a Delaware corporation, on
September 19, 1997:
RESOLVED, that pursuant to the authority vested in the
Board of Directors of Corn Products International, Inc. (the
"Corporation") in accordance with the provisions of its Amended
and Restated Certificate of Incorporation (the "Certificate of
Incorporation"), a series of the preferred stock, par value $0.01
per share, of the Corporation be, and it hereby is, created, and
that the designation and amount thereof and the preferences,
limitations and relative rights thereof are determined to be as
follows:
SECTION 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such
series shall initially be 600,000, par value $0.01 per share,
such number of shares to be subject to increase or decrease by
action of the Board of Directors as evidenced by a certificate of
designation; provided, however, that no such decrease shall
reduce the number of authorized shares of the Series A Junior
Participating Preferred Stock to a number less than the number of
shares of the Series A Junior Participating Preferred Stock then
outstanding plus the number of shares of the Series A Junior
Participating Preferred Stock then reserved for issuance upon the
exercise of any outstanding options, warrants or rights or the
exercise of any conversion or exchange privilege contained in any
outstanding securities issued by the Corporation.
SECTION 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series A Junior Participating
Preferred Stock with respect to dividends, the holders of shares
of Series A Junior Participating Preferred Stock, in preference
to the holders of the shares of Common Stock, par value $0.01 per
share, of the Corporation (the "Common Stock") and of any other
class of capital stock of the Corporation ranking junior to the
Series A Junior Participating Preferred Stock with respect to
dividends, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of
March, June, September and December in each year (each such date
being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $5.00 and (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Participating Preferred
Stock. In the event the Corporation shall at any time after
September 19, 1997 (the "Rights Declaration Date"), other than in
connection with the distribution (the "Distribution") of shares
of Common Stock to the holders of common stock, par value $0.25
per share, of CPC International, Inc., (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, or (iv) effect a
reclassification of its outstanding Common Stock, then in each
such case the amount to which holders of shares of Series A
Junior Participating Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare, out of funds
legally available therefor, a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in
paragraph (A) above immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $5.00 per share on the Series A Junior Participating
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Participating Preferred
Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series A Junior Participating
Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue and
be cumulative from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of
shares of Series A Junior Participating Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Junior
Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders
of
2
shares of Series A Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to
the date fixed for the payment thereof.
SECTION 3. Voting Rights. In addition to any other
voting rights required by applicable law, the holders of shares
of Series A Junior Participating Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior
Participating Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the stockholders
of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date, other than in connection
with the Distribution, (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, or (iv) effect a reclassification of
its outstanding Common Stock, then in each such case the number
of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred
Stock, the holders of shares of Common Stock and the holders of
any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in an
amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a
period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly
dividend period on all shares of Series A Junior Participating
Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A
Junior Participating Preferred Stock) with dividends in arrears
in an amount equal to six (6) quarterly dividends thereon, voting
as a class, irrespective of series, shall have the right to elect
two (2) directors.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock may
be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting
of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of
directors shall be exercised unless the holders of ten percent in
number of shares of Preferred Stock outstanding shall be present
in person or by proxy. The absence of a quorum of the holders of
Common Stock shall not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which the
holders of Preferred Stock shall exercise
3
such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect directors
to fill such vacancies, if any, in the Board of Directors as may
then exist up to two (2) directors or, if such right is exercised
at an annual meeting, to elect two (2) directors. If the number
which may be so elected at any special meeting does not amount to
the required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of directors
as shall be necessary to permit the election by them of the
required number. After the holders of the Preferred Stock shall
have exercised their right to elect directors in any default
period and during the continuance of such period, the number of
directors shall not be increased or decreased except by vote of
the holders of Preferred Stock as herein provided or pursuant to
the rights of any equity securities ranking senior to or pari
passu with the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect directors, the Board of Directors may order,
or any stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request,
the calling of a special meeting of the holders of Preferred
Stock, which meeting shall thereupon be called by the President,
a Vice-President or the Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this paragraph
(C)(iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to such holder at such
holder's last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier
than 20 days and not later than 60 days after such order or
request or in default of the calling of such meeting within 60
days after such order or request, and notwithstanding Article III
Section 2 of the Corporation's By-laws, such meeting may be
called on similar notice by any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual
meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) directors voting as a
class, after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining directors theretofore elected by the
holders of the class of stock which elected the director whose
office shall have become vacant. References in this paragraph (C)
to directors elected by the holders of a particular class of
stock shall include directors elected by such directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect directors shall cease, (y) the term of any
directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of directors shall be such
number as may be provided for in the Certificate of Incorporation
or By-
4
laws irrespective of any increase made pursuant to the provisions
of paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by
law or in the Certificate of Incorporation or By-laws). Any
vacancies in the Board of Directors effected by the provisions of
clauses (y) and (z) in the preceding sentence may be filled by a
majority of the remaining directors.
(D) Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
SECTION 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding-up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding-up)
with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding-up) to the
Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any
stock of the Corporation ranking junior (both as to dividends or
upon dissolution, liquidation or winding-up) to the Series A
Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock, or
any shares of stock ranking on a parity (either as to dividends,
or upon liquidation, dissolution or winding-up) with the Series A
Junior Participating Preferred Stock or redeem any shares of such
parity stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
5
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. Reacquired Shares.
Any shares of Series A Junior Participating Preferred
Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after
such purchase or acquisition. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance
set forth herein.
SECTION 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $10.00 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the
holders of shares of Series A Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the
Series A Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in subparagraph (C) below to reflect such
events as stock splits, stock dividends and recapitalizations
with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full
amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A
Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred
Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with
respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
of all other series of preferred stock, if any, which rank on a
parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
6
(C) In the event the Corporation shall at any time
after the Rights Declaration Date, other than in connection with
the Distribution, (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, or (iv) effect a reclassification of
its outstanding Common Stock, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed into an amount
per share (subject to the provision for adjustment hereinafter
set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall
at any time after the Rights Declaration Date, other than in
connection with the Distribution, (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, or (iv) effect a
reclassification of its outstanding Common Stock, then in each
such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Junior
Participating Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
SECTION 8. No Redemption. The shares of Series A
Junior Participating Preferred Stock shall not be redeemable.
SECTION 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series
shall provide otherwise.
SECTION 10. Amendment. The Certificate of
Incorporation of the Corporation shall not be further amended in
any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds (2/3)
or more of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.
SECTION 11. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating
Preferred Stock.
7
IN WITNESS WHEREOF, Corn Products International, Inc.
has caused this Certificate to be signed by Marcia E. Doane, its
Vice President, General Counsel and Corporate Secretary, this
21st day of November, 1997.
CORN PRODUCTS INTERNATIONAL, INC.
/s/ Marcia E. Doane
---------------------------------
Marcia E. Doane
Vice President, General Counsel
and Corporate Secretary
8
Exhibit 10.5
FORM OF TRANSITION SERVICES AGREEMENT
-------------------------------------
This TRANSITION SERVICES AGREEMENT, dated as of [ ], 1997,
is between CPC International Inc., a Delaware corporation
("CPC"), and Corn Products International, Inc., a Delaware
corporation ("Corn Products").
W I T N E S S E T H
WHEREAS, CPC and Corn Products have entered into a
Distribution Agreement dated as of the date hereof (the
"Distribution Agreement") pursuant to which, among other matters,
each party has agreed to provide, or cause one or more of its
subsidiaries to provide, to the other party, and its respective
subsidiaries certain transitional administrative and support
services on the terms set forth in this Agreement and the
appendices hereto; and
WHEREAS, CPC and Corn Products intend for this Agreement to
be an Ancillary Agreement pursuant to the terms of the
Distribution Agreement.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties
hereby agree as follows:
ARTICLE I
SERVICES PROVIDED
1.1 Transition Services. Upon the terms and subject to the
conditions set forth in an appendix hereto, each of which is made
a part of this Agreement, each party will provide to the other
the services indicated to be provided by such party in such
appendix (a "Transition Service" or "Transition Services") during
the time period set forth in such appendix (the "Time Periods").
1.2 Personnel. In providing the Transition Services, each
party, in its capacity as a provider and as it deems necessary or
appropriate in its sole discretion, shall, unless otherwise
agreed, use its own personnel. Unless otherwise agreed in
writing, none of the individuals providing Transition Services to
the recipient will be deemed to be employees of the recipient for
any purpose.
1.3 Level of Transition Services. (a) Each party providing
Transition Services shall use commercially reasonable efforts to
provide such services in a satisfactory and timely manner and
exercising the same degree of care as it exercises in performing
the same or similar services for its own account as of the date
of this Agreement, with priority equal to that provided to its
own businesses or those of any of its affiliates, subsidiaries or
divisions. Nothing in this Agreement shall require any
party to favor the businesses of the other over its own
businesses or those of any of its affiliates, subsidiaries or
divisions.
1.4 Force Majeure. Any failure or omission by a party
in the performance of any obligation under this Agreement shall
not be deemed a breach of this Agreement or create any liability,
if the same arises from any cause or causes beyond the control of
such party, including, but not limited to, the following, which,
for purposes of this Agreement shall be regarded as beyond the
control of each of the parties hereto: acts of God, fire, storm,
flood, earthquake, governmental regulation or direction, acts of
the public enemy, war, rebellion, insurrection, riot, invasion,
strike or lockout; provided, however, that such party shall
resume performance whenever such causes are removed if the
applicable Time Period has not expired.
1.5 Modification of Procedures. Each party may make changes
from time to time in its standards and procedures for providing
the Transition Services for which it is responsible hereunder to
the degree it changes such Services for its own use.
1.6 No Obligation to Continue to Use Services. Neither
party shall have any obligation to continue to use any Transition
Service. Either party may elect to stop receiving any Transition
Service from the other party at any time by giving the other
party not less than 30 days written notice.
1.7 Provider Access. To the extent reasonably required for
personnel to perform the Transition Services, the other party
shall provide reasonable access, on an as needed basis, to its
equipment, office space, plants, telecommunications and computer
equipment and systems, and any other areas and equipment.
1.8 Cooperation. Each party shall provide to the other on a
timely basis any and all information which is necessary to
provide the applicable Transition Services. The party shall be
solely responsible for the timely delivery of such information,
and the accuracy and completeness thereof.
1.9 Ancillary Agreement. This agreement is an Ancillary
Agreement to the Distribution Agreement and shall be governed by
the provisions set forth therein except as specifically otherwise
provided herein. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed thereto in the
Distribution Agreement.
ARTICLE II
COMPENSATION
2.1 Consideration. For each Transition Service provided
pursuant hereto, the receiving party shall pay the other the
amount specified in the appendix relating to such Transition
Service (with the understanding that there shall be no charge for
informal telephone consultation); provided, that, in the event
the appendix does not
describe such amount, the receiving party shall pay an amount
equal to 105% of the provider's fully allocated cost to provide
such Transition Service. Payment shall be made monthly based on
an invoice from the provider to the recipient.
ARTICLE III
TERM AND TERMINATION
3.1 Term. This Agreement shall become effective on the
Distribution Date and shall remain in force until the expiration
of the longest Time Period specified in any appendix hereto,
including any extension thereof, unless a recipient has elected
to stop receiving all of the Transition Services in accordance
with Section 1.6 above, or this Agreement is otherwise
terminated.
IN WITNESS WHEREOF, the parties hereto have caused this
Transition Services Agreement to be executed the day and year
first above written.
CPC INTERNATIONAL INC.
By: _____________________________
Name:
Title:
CORN PRODUCTS INTERNATIONAL, INC.
By: _____________________________
Name:
Title:
Exhibit 10.6
FORM OF MASTER LICENSE AGREEMENT
AGREEMENT made as of the ________ day of ____________, 1998
by and between each entity referred to as the Licensor on each
Schedule annexed hereto (each hereinafter referred to as
"Licensor"), and each entity referred to as the Licensee on such
Schedule (each hereinafter referred to as "Licensee"). References
to "Licensor" and "Licensee" are to each Licensor and Licensee
individually.
WITNESSETH:
WHEREAS, Licensor is the sole and exclusive proprietor of
certain trademarks as hereafter defined; and
WHEREAS, Licensor possesses and owns certain technology as
hereafter defined; and
WHEREAS, Licensee desires the right to use the trademarks
and the technology and Licensor is willing to grant such rights
on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the promises and
obligations set forth herein, it is hereby agreed as follows:
I. DEFINITIONS:
As hereinafter used,
1.1 The term "Affiliate" of a party shall be deemed to be
any entity which is controlled by, in control of, or under common
control with, the party to which the reference is made.
1.2 The term "Designee" shall mean such person or entity as
may be appointed by Licensor, upon notice to Licensee, to perform
any of Licensor's obligations or to exercise any of Licensor's
rights hereunder, including but not limited to, supervision of
quality control procedures and approval of Licensed Trademark
Products (as hereinafter defined) and Packaging Materials (as
hereinafter defined).
1.3 The term "Licensed Know-How" shall mean formulations,
recipes, manufacturing information and other technical
information.
1.4 The term "Licensed Patents" shall mean patents, patent
applications and idea disclosures which relate to Licensed
Technology Products (as hereinafter defined).
1.5 The term "Licensed Technology" shall include Licensed
Know-How and Licensed Patents owned by or available to Licensor
as of the date of this Agreement which Licensor has the right to
license under this Agreement without breaching any obligations to
a third party or the laws of any country having jurisdiction and
which relates to Licensed Technology Products (as hereinafter
defined).
1.6 The term "Licensed Technology Products" shall mean,
with respect to each Licensor and Licensee, the specific products
identified on each Technology Schedule for each Licensed
Technology.
1.7 The term "Licensed Trademarks" shall mean the
trademarks listed on the relevant Trademark Schedule annexed
hereto with respect to each Licensor and
2
Licensee for use in the Territory (as hereinafter defined) on the
Licensed Trademark Products (as hereinafter defined).
1.8 The term "Licensed Trademark Products" shall mean, with
respect to each Licensor and Licensee, the specific products
identified on each Trademark Schedule for each Licensed
Trademark.
1.9 The term "Packaging Materials" shall mean anything used
in connection with the packaging of Licensed Trademark Products,
including, but not limited to, labels, jars, bags, closures,
boxes, packages, cartons and containers, as approved by Licensor
for use only in connection with Licensed Trademark Products.
1.10 The term "Property" shall mean the Licensed Know-How,
the Licensed Patents, the Licensed Trademarks and the copyrights
and package trade dress associated with the Licensed Trademarks
which Licensor or any of its Affiliates owns and has used or may
in the future use in connection with the manufacture,
advertisement, and sale of Licensed Trademark Products and
Licensed Technology Products, and any trademarks, copyrights and
package trade dress developed by Licensee deriving from the
Licensed Trademarks or from related copyrights or trade dress.
The term "Property" shall not include any trademark, copyright or
package trade dress licensed by a third party to Licensor or
otherwise controlled by another party, which Licensor does not
have the right to sublicense to Licensee.
1.11 The term "Term" shall mean, with respect to each item
of Property, the time period set forth in the relevant Schedule
annexed hereto.
3
1.12 The term "Territory" shall mean, with respect to each
item of Property, the countries set forth in each relevant
Schedule annexed hereto, and any other countries as may from time
to time be added on mutual agreement of the parties.
II. TRADEMARK LICENSE:
2.1 Grant. Beginning with the date of this Agreement,
Licensor grants to Licensee upon the terms and conditions
specified herein, including all terms and conditions specified in
each relevant Trademark Schedule annexed hereto, an exclusive,
royalty-free license, except for third party licensees
existing as of the date of this Agreement, to use the Licensed
Trademarks on and in connection with the manufacturing,
packaging, advertising, promotion and sale of Licensed Trademark
Products only, offered for sale or sold within the Territory, but
only so long as Licensed Trademark Products conform to Licensor's
quality standards (as hereinafter set forth) and the other terms
and provisions of this Agreement. Unless otherwise set forth on
the relevant Schedule, Licensor retains the right to license
others to use the Licensed Trademarks on and in connection with
the manufacturing, packaging, advertising, promotion and sale of
any products other than Licensed Trademark Products.
2.2 Limitations on Use of Licensed Trademarks By Licensee.
Licensee shall not use any Licensed Trademark on or in connection
with any goods other than the specified Licensed Trademark
Products for which they are herein licensed for sale in the
Territory. Unless Licensor consents in writing to the contrary,
all products listed on the relevant Trademark Schedule which are
manufactured by or on behalf of Licensee
4
for sale as Licensed Trademark Products shall be sold only under
the corresponding Licensed Trademarks, and no trademark other
than the relevant Licensed Trademarks shall be used in connection
with such products or related Packaging Materials or advertising
and promotional materials.
2.3 Licensed Trademarks Owned by Licensor. Licensee
recognizes Licensor's ownership of and title to the Licensed
Trademarks and shall not do or suffer to be done any act or thing
which will in any way impair the rights of Licensor in and to the
Licensed Trademarks. Licensee shall not claim any right or
interest in and to the Licensed Trademarks, except such limited
rights of use as are expressly granted herein, and shall not
contest the validity of the Licensed Trademarks, or the right and
title of Licensor in and to the Licensed Trademarks, or do any
act or thing calculated or tending to aid others to infringe the
Licensed Trademarks or to challenge such right and title of
Licensor.
2.4 Use of Licensed Trademarks. Licensee shall use the
Licensed Trademarks in the Territory strictly in accordance with
the requirements of all laws and regulations thereof, and only in
connection with the manufacturing, packaging, sale, advertising
and promotion of Licensed Trademark Products. All uses of the
Licensed Trademarks by Licensee shall be in the manner and form
provided or approved in advance by Licensor or its Designee, and
shall inure solely to the benefit of Licensor. Upon Licensor's
request, Licensee will execute such documents as may be necessary
or advisable under the laws of the Territory in order to preserve
the rights of Licensor in and to the Licensed Trademarks.
5
2.5 Quality of Licensed Products and Packaging Materials.
All Licensed Trademark Products bearing the Licensed Trademarks
manufactured by Licensee hereunder and all Packaging Materials
used in connection therewith shall be of at least the same
quality as comparable products and materials currently
manufactured and used by Licensee, with which Licensor is
familiar. Licensor or its Designee may periodically, but no more
than three (3) times within any twelve (12) month period, request
samples of Licensed Trademark Products and Packaging Materials
for purposes of inspection as part of appropriate quality
control, and Licensee shall provide such requested items to
Licensor or its Designee.
2.6 Approvals. Any product or other item submitted to
Licensor or its Designee for approval pursuant to this Agreement
shall be deemed approved unless Licensor or its Designee notifies
Licensee of its disapproval of such product or other item within
twenty (20) business days of its submission by Licensee. No such
approval shall be deemed to be an admission by Licensor or its
Designee that the product or item approved complies with
applicable laws and regulations. In the event Licensee receives
notice of disapproval as provided herein with respect to any
product or other item, it shall not offer such product for sale
as a Licensed Trademark Product or use such other item until the
reason for disapproval has been remedied to the satisfaction of
Licensor or its Designee. Once a product or other item has been
approved by Licensor or its Designee, Licensee shall make no
material change in such product or other item without the prior
written approval of Licensor or its Designee.
6
2.7 Quality To Be Consistent with Samples. Once a sample of
a Licensed Trademark Product has been approved by Licensor or its
Designee, Licensee shall insure that the quality of all such
Licensed Trademark Products shall be consistent with the samples
approved.
2.8 Legends. In conjunction with the use of the Licensed
Trademarks by Licensee, Licensee shall employ on Packaging
Materials and on advertising and promotional materials and the
like, such legend or legends as Licensor may specify from time to
time, indicating that Licensor is the owner of the Licensed
Trademarks and/or that Licensee is the licensee thereof in the
Territory.
2.9 Licensor Not to License Others. Licensor will not,
during the Term of this Agreement, license anyone other than
Licensee to use the Licensed Trademarks in connection with
Licensed Trademark Products in the Territory or to manufacture
and sell Licensed Trademark Products bearing the Licensed
Trademarks within the Territory.
2.10 Licensed Trademarks and Products Widely Known. Licensee
acknowledges the fact that the Licensed Trademarks and the
Licensed Trademark Products are known and accepted in the
Territory, and Licensee covenants to acknowledge this fact in any
disputes between the parties and not to contest or challenge said
fact.
III. TECHNOLOGY LICENSE:
7
3.1. Grant. Beginning with the date of this Agreement,
Licensor grants to Licensee upon the terms and conditions
hereinafter specified, including all terms and conditions
specified in each relevant Technology Schedule annexed hereto, a
non-exclusive (except as otherwise indicated on the Schedules),
royalty-free license, except for third party licensees existing
as of the date of this Agreement, to use the Licensed Technology
to manufacture and sell Licensed Technology Products in the
Territory.
3.2. Transfer of Licensed Know-How. Licensor will provide
Licensee with any Licensed Know-How not in Licensee's possession
in a manner mutually agreed to by the parties.
3.3. Reservation of Rights. Licensor reserves the right to
use and license others to use the Licensed Technology in the
Territory in connection with products other than Licensed
Technology Products, and outside the Territory in connection with
any and all products, including Licensed Technology Products.
IV. MAINTENANCE OF LICENSED TRADEMARKS AND LICENSED PATENTS
During the Term, Licensor will have the sole right at
its discretion and expense to maintain the registration of any of
its Licensed Trademarks and Licensed Patents. Notwithstanding
this provision, prior to abandoning any Licensed Trademarks or
Licensed Patents, Licensor will give Licensee at least ninety
(90) days written notice. If Licensee wishes to maintain any such
Licensed Trademarks or Licensed Patents, within sixty (60) days
of such notice, Licensee will so advise Licensor and Licensee will
8
then be responsible for all costs associated with the Licensed
Trademarks or Licensed Patents.
V. CONFIDENTIALITY
5.1 Confidential Information. Licensee will keep secret and
confidential at all times and will not disclose, divulge, or
communicate the Licensed Technology received from Licensor to any
third parties, except where that information:
(a) is or later becomes publicly known under
circumstances involving no breach of this
Agreement by Licensee;
(b) was already known to Licensee at the time it
was received from Licensor;
(c) is made available to Licensee by a third party
without secrecy obligations and without breach
of an obligation to Licensor; or
(d) is contained in patents or published patent
applications.
5.2 Employees. Licensee may disclose the Licensed
Technology received from Licensor only to those of its directors,
officers, and employees who legitimately require it for the
purposes permitted by this Agreement.
5.3 Notwithstanding the termination of this Agreement, the
obligations of Licensee under this Article V shall continue in
force. In the event of such termination Licensee shall return to
Licensor all copies in its possession of any plans, drawings
specification sheets, reports, charts, manuals or other items of
Licensed Technology received from Licensor and shall destroy all
computer entries relating thereto.
9
VI. INFRINGEMENT
Infringement by Others. Licensee shall notify Licensor in
writing of any use or imitations in the Territory by others of
any element of the Property which may come to Licensee's
attention and Licensor shall have the initial right to determine
whether or not any action shall be taken on account of any such
use or imitations. In the event Licensor shall not have taken
steps to initiate action against the infringer or imitator within
forty-five (45) business days after such notice from Licensee
(during which period the parties shall consult as to appropriate
action to be taken), then, subject to Licensor's prior written
approval, which shall not be unreasonably withheld, Licensee may,
if it so desires, commence or prosecute any claims or suits in
its own name as exclusive Licensee hereunder, or join Licensor as
a party thereto. Licensor agrees to cooperate in any such suit
subject to being reimbursed for its out-of-pocket expenses and
being held harmless by Licensee from any claim, loss, suit or
damage arising out of said action. In the event suit is brought
under this paragraph, no settlement shall be entered without the
prior consent of Licensor and Licensee. All damages recovered
shall be retained by Licensor if it has initiated such lawsuit or
otherwise by Licensee. Unless otherwise agreed by the Parties,
all costs of any action taken under this paragraph by Licensee
shall be borne by such party.
VII. CLAIMS AGAINST LICENSOR OR LICENSEE
10
If claims are made against Licensor, Licensee or any of its
permitted sublicensees by a party asserting the infringement or
ownership of rights in any subject matter which is the same as or
similar to any element of the Property, or if the parties hereto
learn that another party has or claims rights in subject matter
which would or might conflict with the proposed or actual use of
any element of the Property by Licensee or its permitted
sublicensees, Licensor and Licensee agree in any such case to
consult with each other on a suitable course of action. In no
event shall Licensee or its permitted sublicensees have the
right, without the prior consent of Licensor, to acknowledge the
validity of the claim of such party, to obtain or seek a license
from such party or to take any other action which might impair
the ability of Licensor to contest the claim of such party if
Licensor so elects. Licensee agrees, at the request of Licensor,
to make and have made reasonable modifications in Licensee's and
its permitted sublicensees' use of any elements of the Property
in question or to discontinue their use in the Territory. If
Licensor, in its sole discretion, reasonably exercised,
determines that such action is necessary to resolve or settle a
claim or suit or to eliminate or reduce the threat of a claim or
suit. Licensor shall have the right to participate fully, at its
own expense, in the defense of any claim or suit instituted
against Licensee or its permitted sublicensees with respect to
the use by Licensee or its permitted sublicensees of any element
of the Property.
VIII. PRODUCT LIABILITY AND INDEMNIFICATION
Nothing contained in this Agreement may be construed as:
11
(a) a warranty or representation by Licensor to enable
Licensee to produce and manufacture Licensed
Technology Products or Licensed Trademark Products of
any particular quality, standard, specification or the
like;
(b) a warranty or representation by Licensor that any
manufacture, sale or use of the Licensed Technology
Products or Licensed Trademark Products under this
Agreement will be free from infringement of patents,
or other industrial and intellectual property rights
of any parties other than Licensor;
(c) conferring by implication, estoppel or otherwise upon
Licensee any license or other rights except the rights
expressly granted under this Agreement to License;
(d) a warranty or representation as to the validity of
any Licensed Trademark or Licensed Patent held by
Licensor; or
(e) a warranty or representation as to the right of the
Licensee to use Licensed Technology under this
Agreement without infringement of any patents held
by third parties.
Licensee agrees to indemnify Licensor and hold Licensor
free and harmless from and against any demand, claim, action,
suit or other proceedings which may be made or instituted by any
third party against Licensor and/or any parent, subsidiary or
associated person, firm or company thereof regarding the Licensed
Technology Products and Licensed Trademark Products manufactured
and sold by Licensee including any alleged infringement of any
intellectual property rights of any third party
12
and from and against any and all loss, damage, damages, costs,
charges and expenses arising, paid, incurred or suffered by
Licensor and/or any parent, subsidiary or associate person, firm
or company thereof arising out of this Agreement.
IX. TERM AND TERMINATION
9.1 Term. This Agreement shall, with respect to each item of
the Property, have a term as set forth on the relevant Schedule
annexed hereto (the "Term").
9.2 Termination for Default or Breach. If, during the Term
of this Agreement, either party shall default in the performance
of or breach any of its material obligations hereunder, and if
any such default or breach shall not be corrected within thirty
(30) business days after the same shall have been called to the
attention of the defaulting or breaching party by the other party
by notice, then the notifying party, at its option, may thereupon
terminate this Agreement by notice effective on the date given,
and/or avail itself of such rights or remedies as it may have
under the laws of the United States. Notwithstanding the
foregoing, if any breach or default by Licensee relates to any
violation of any of the provisions herein relating to quality
control, or to a health hazard or potential health hazard
resulting from the sale of Licensed Trademark Products, all
further distribution and sales of Licensed Trademark Products
shall cease immediately upon receipt of faxed or written notice
of such breach or default.
9.3 Other Termination. This Agreement may be terminated:
(a) automatically by Licensor on notice to Licensee if
corporate action for the voluntary liquidation of Licensee shall
be instituted, or a court order of dissolution
13
shall be made against Licensee, or a receiver of any of the
assets of Licensee shall be appointed and such appointment shall
not be vacated within sixty (60) business days, or Licensee shall
become insolvent or bankrupt or shall enter into an assignment
for the benefit of creditors, or shall make a composition with
its creditors; or
(b) automatically in whole or in part by Licensor in
the event of a change in control of Licensee. For purposes of
this Agreement, "change in control" shall mean: (i) in the case
of CPC International Inc. ("CPC") or Corn Products International,
Inc. ("CPI"), (A) the acquisition by any person (as such term is
defined in the Securities Act of 1933, as amended) (excluding the
party to which the change in control relates or any of its
Affiliates or a fiduciary holding its securities in any type of
benefit plan), directly or indirectly, of beneficial ownership of
15% or more of the combined voting power of the then outstanding
voting securities entitled to vote generally at the election of
directors, if such person is a competitor in the business to
which this Agreement relates, or (B) the merger, consolidation,
reorganization or liquidation involving the sale or transfer of
substantially all of the assets of the Licensee to a third party
who is a competitor in the business to which this Agreement
relates, or (ii) in the case of any Affiliate of CPC or CPI, any
change in ownership of such Affiliate, such that CPC or CPI
ceases to hold voting control of its respective Affiliate(s) and
the new owner is a competitor in the business to which this
Agreement relates; or
(c) at any time upon the mutual written agreement of
the parties.
9.4 Effect of Expiration or Termination. In the event this
Agreement expires, or is terminated, all rights, licenses and
privileges granted under this Agreement shall
14
immediately cease and Licensee shall immediately cease all use of
the Property, making and selling no additional Licensed Trademark
Products and Licensed Technology Products using the Property,
except for the disposition of finished Licensed Trademark
Products and Licensed Technology Products on hand as of the date
of expiration or termination. If, however, the reason for
termination or non-renewal relates to the quality of Licensed
Trademark Products or to a health hazard or potential health
hazard resulting from the sale of Licensed Trademark Products,
Licensee shall not sell, offer for sale or otherwise offer for
human consumption the finished Licensed Trademark Products on
hand as of the date of expiration or of receipt of notice of
termination, but shall either destroy such finished Licensed
Trademark Products or shall turn them over to Licensor or its
Designee for destruction. Licensee shall not thereafter adopt or
use any trademark or other material which is similar to or
otherwise infringes any of the Licensed Trademarks or other
Property. Licensee acknowledges that its failure (except as
otherwise specifically provided herein) to cease the manufacture,
sale or distribution of Licensed Trademark Products and Licensed
Technology Products or to cease utilizing the Property covered by
this Agreement on the expiration or termination of this Agreement
will result in immediate and irreparable harm to Licensor and to
the rights of any subsequent Licensee. Licensee acknowledges and
admits that there is no adequate remedy at law for such failure to
cease manufacture, sale or distribution, and Licensee agrees that in
the event of such failure, Licensor shall be entitled to equitable
relief by way of temporary and permanent injunctions and such
15
other and further relief as any arbitration panel or court with
jurisdiction may deem just and proper.
9.5 Licensee to furnish Inventory Upon Expiration or
Termination. In the event this Agreement expires or is terminated
by either party, Licensee shall furnish to Licensor or its
Designee an inventory of Licensed Trademark Products, Packaging
Materials and advertising and promotional materials bearing the
Licensed Trademarks or package trade dress in Licensee's
possession or control. Licensee shall permit Licensor or its
Designee to make an inspection of all such items during regular
business hours at the premises where they are located. Licensee
shall not sell or otherwise dispose of such items without
Licensor's prior written consent.
9.6 Cancellation of Recordation of Agreement. If this
Agreement or notification of its existence shall have been
recorded with any governmental agency in the Territory, Licensee
shall join with Licensor in arranging to cancel any such
recordation, supplying such help and materials as may be required
to achieve this purpose at the earliest possible time. It is
understood that if any such recordation shall have taken place,
the delay in canceling such recordation shall in no way affect
the fact of expiration or termination of this Agreement, and
shall not give Licensee any right to use the Property beyond that
set forth in Section 9.5 above.
X. MISCELLANEOUS PROVISIONS
16
10.1 Agreement Not Assignable by Licensee. Licensee may not
assign this Agreement or all or any part of its rights or
obligations hereunder without the prior written consent of
Licensor, but may sublicense such rights or obligations to any of
its Affiliates subject to a sublicensee agreement substantially
in the form of this Agreement and approved by Licensor, unless
otherwise stated on the relevant Schedule annexed hereto.
10.2 No Agency. It is the express intention and
understanding of the parties that the present Agreement does not
give rise to a commercial agency relationship. All purchases by
Licensee shall be in its own name and for its own account, and
neither Licensor nor its Affiliates or its Designee shall in any
way guarantee or be responsible for any such purchases.
10.3 Waiver. Waiver by Licensor or by Licensee of any
breach of, or failure to comply with, any provision of this
Agreement, shall not be construed as or constitute a continuing
waiver of said provision, or a waiver of any other breach of or
failure to comply with any provision (whether the same provision
or another) of this Agreement. No waiver or modification of any
provision of this Agreement shall be effective unless
specifically made in writing and signed by either Licensor or
Licensee, whichever shall be the party against whom the
enforcement of such waiver or modification is sought.
10.4 Delivery of Instruments Confirming Rights. When
requested in writing by Licensor or Licensee, the other party
shall promptly deliver or cause to be delivered to the requesting
party, any such instrument as the requesting party may reasonably
require confirming any rights under this Agreement.
17
10.5 Severability. If any covenant, obligation or
understanding of this Agreement or the application thereof to any
person or circumstances shall, to any extent, be held by any
competent authority to be invalid or unenforceable, the remainder
of this Agreement or the application of such covenant, obligation
or agreement to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected
thereby, and each covenant, obligation and agreement of this
Agreement shall be separately valid and enforceable to the
fullest extent permitted by law.
10.6 Essential Elements of Agreement. It is understood that
the essential elements of this Agreement with respect to Licensed
Trademarks consist of those provisions providing Licensor with
the power and ability to supervise quality control and appearance
standards of Licensed Trademark Products, Packaging Materials and
advertising and promotional materials and those provisions which
assure Licensor that all use of the Licensed Trademarks made by
Licensee hereunder shall result in goodwill solely in favor of
Licensor as owner of the Licensed Trademarks. In the event any
provision relating to the foregoing essential elements of this
Agreement shall be found to be illegal or unenforceable in law or
equity, this Agreement shall be invalid with respect to all
Licensed Trademarks and Licensee shall immediately cease all use
of the Licensed Trademarks and all sale of Licensed Trademark
Products. If, however, any part of this Agreement not relating to
the foregoing essential elements shall be found to be illegal or
unenforceable in law or in equity, such findings shall in no way
invalidate the validity and enforceability of the remaining parts
hereof.
18
10.7 Notice. Any notice, approvals or other communication
to any party to this Agreement required or permitted hereunder
shall be given as set forth on each relevant Schedule annexed
hereto. All written notices shall be by registered, certified or
comparable air mail, postage prepaid. Any such notice or
communication shall be deemed to have been served when delivered
or, if delivery is not accepted by reason of the fault of the
addressee, when tendered.
10.8 Force Majeure.
(a) No Liability. Neither party shall be liable for
failure to perform any of the terms of this Agreement during such
a time as it may be prevented from doing so by reason of any act
of force majeure or the after-effects thereof. Except where the
nature of the event shall prevent it from doing so, the party
prevented from performing by such act of force majeure shall
notify the other party in writing within five (5) business days
after the occurrence of such act of force majeure and shall in
every instance to the extent it is capable of doing so use its
best efforts to remove or remedy such cause with all reasonable
dispatch.
(b) Definition. As used herein, the term "force
majeure" means acts of God, strikes, lockouts, slowdowns or other
industrial disturbances, whether of the same or different kind,
riots, civil commotions, blockades, revolutions, insurrections,
mobilization, declared or undeclared war, earthquakes, floods,
fires, explosions, failure of transportation, United States or
other governmental action or inaction or controls, including any
security action or controls or refusal to issue import or export
licenses, or other occurrences or failures happening to the
parties or to others which are beyond the
19
control of the parties and which prevent the parties from
performing their obligations hereunder.
10.9 Dispute Resolution. The parties shall cooperate and
work together to effectuate this Agreement and its purposes. In
the event disputes should arise, they shall be resolved in
accordance with Article VI of the Distribution Agreement between
CPC and CPI dated as of December ____, 1997. This agreement shall
be governed and construed in accordance with the laws of the
State of New York, without regard to the choice of law principles
thereof.
10.10 Survival. The provisions of Sections II (2.3), II
(2.10), V, VII, VIII and IX shall survive the termination or
expiration of this Agreement.
10.11 Entire Agreement. No representation, verbal or
otherwise, not contained herein shall be binding on any party to
this Agreement. This Agreement contains the entire understanding
of the parties and supersedes all previous agreements between the
parties relating to the subject matter hereof, and may be
modified only by a written instrument signed by all parties.
10.12 Headings. The headings in this Agreement are solely
for convenience of reference and shall not affect the
interpretation of any provision hereof.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed as of the day and year first written
above by signing the relevant Schedules annexed hereto.
20
SCHEDULE
LICENSOR
LICENSEE
LICENSED TRADEMARK(S): LICENSED PRODUCTS
OR
KNOW-HOW AND PATENTS:
TERM
TERRITORY
21
NOTICE
(1) TO LICENSOR:
(2) TO LICENSEE:
IN WITNESS WHEREOF, the parties have caused the annexed
Agreement to be executed as of the day and year first set forth
therein.
[LICENSOR]
By_________________________
Name:______________________
Title:_____________________
[LICENSEE]
By_________________________
Name:______________________
Title:_____________________
22
Exhibit 10.10
FORM OF CORN PRODUCTS INTERNATIONAL, INC.
1998 STOCK INCENTIVE PLAN
I. INTRODUCTION
1.1 Purpose. The purpose of the Corn Products International, Inc.
1998 Stock Incentive Plan (the "Plan") of Corn Products
International, Inc. (the "Company") is to promote the long-term
financial success of the Company by (i) attracting and retaining
executive personnel of outstanding ability; (ii) strengthening
the Company's capability to develop, maintain and direct a
competent management team; (iii) motivating executive personnel
by means of performance-related incentives to achieve
longer-range performance goals; (iv) providing incentive
compensation opportunities which are competitive with those of
other major corporations and (v) enabling such executive
personnel to participate in the long-term growth and financial
success of the Company through increased stock ownership.
1.2 Certain Definitions. In addition to the defined terms set
forth elsewhere in this Plan, the terms set forth below, shall,
when capitalized, have the following respective meanings.
"Board" shall mean the Board of Directors of the Company.
"Bonus Stock" shall mean shares of Common Stock that are
not subject to a Restriction Period or Performance Measures.
"Cause" shall mean the willful and continued failure to
substantially perform the duties assigned by the Company (other
than a failure resulting from the optionee's Disability), the
willful engaging in conduct which is demonstrably injurious to
the Company or any Subsidiary, monetarily or otherwise, including
conduct that, in the reasonable judgment of the Committee, no
longer conforms to the standard of the Company's executives, any
act of dishonesty, commission of a felony, or a significant
violation of any statutory or common law duty of loyalty to the
Company.
"Change in Control" shall have the meaning set forth in Section 5.8(b).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Compensation and Nominating
Committee designated by the Board, consisting of two or more
members of the Board, each of whom shall be (i) a "Non-Employee
Director" within the meaning of Rule 16b-3 under the Exchange Act
and (ii) an "outside director" within the meaning of Section
162(m) of the Code.
"Common Stock" shall mean the common stock, $.01 par value,
of the Company.
"Disability Date" shall mean the date on which a
Participant becomes a "Disabled Member" under the Corn Products
International Cash Balance Pension Plan (the "Corn Products
Retirement Plan"), or a successor plan to said plan or any such
similar plan containing a disability provision applicable to the
Participant. If a Participant is not covered by the Corn Products
Retirement Plan or a similar pension plan containing a disability
provision, the determination of whether the Participant has a
"Disability Date" shall be made by the Committee by applying the
provisions of the Corn Products Retirement Plan as if the
Participant were a Member of such plan or any similar pension
plan that the Committee determines to be appropriate.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Fair Market Value" shall mean the average of the high
and low transaction prices of a share of Common Stock as reported
in the New York Stock Exchange Composite Transactions on the date
as of which such value is being determined or, if there shall be
no reported transactions for such date, on the next preceding
date for which transactions were reported; provided, however,
that Fair Market Value may be determined by the Committee by
whatever means or method as the Committee, in the good faith
exercise of its discretion, shall at such time deem appropriate.
"Incentive Stock Option" shall mean an option to purchase
shares of Common Stock which meets the requirements of Section
422 of the Code, or any successor provision, and which is
intended by the Committee to constitute an Incentive Stock
Option.
"Mature Shares" shall mean previously-acquired shares of
Common Stock for which the holder thereof has good title, free
and clear of all liens and encumbrances and which such holder
either (i) has held for at least six months or (ii) has purchased
on the open market.
"Non-Statutory Stock Option" shall mean a stock option that
is not an Incentive Stock Option.
"Participant" shall mean an individual who has been
granted an Incentive Stock Option, a Non-Statutory Stock Option,
a Bonus Stock Award, Performance Share Award or Restricted Stock
Award.
"Performance Measures" shall mean the criteria and
objectives, established by the Committee, which shall be
satisfied or met (i) as a condition to the exercisability of all
or a portion of an option, (ii) as a condition to the grant of a
Stock Award or (iii) during the applicable Restriction Period or
Performance Period as a condition to the holder's receipt of
Common Stock subject to a Restricted Stock Award or a Performance
Share Award and/or of payment with respect to such award. The
Committee may amend or adjust the Performance Measures or other
terms and conditions of an outstanding award in recognition of
unusual or nonrecurring events affecting the Company or its
financial statements or changes in law or accounting, but only to
the extent such adjustment would not cause any portion of the
award,
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upon payment, or the option, upon exercise, to be
nondeductible pursuant to Section 162(m) of the Code. Such
criteria and objectives may include one or more of the following:
total stockholder return (based on the change in the price of a
share of the Company's Common Stock and dividends paid); earnings
per share; operating income; net income; return on stockholder's
equity; return on assets; economic value added; and cash flows.
If the Committee desires that compensation payable pursuant to
any award subject to Performance Measures be "qualified
performance-based compensation" within the meaning of Section
162(m) of the Code, the Performance Measures (i) shall be
established by the Committee no later than the end of the first
quarter of the Performance Period or Restriction Period, as
applicable (or such other time designated by the Internal Revenue
Service) and (ii) shall satisfy all other applicable requirements
imposed under Treasury Regulations promulgated under Section
162(m) of the Code, including the requirement that such
Performance Measures be stated in terms of an objective formula
or standard.
"Performance Period" shall mean any period designated by
the Committee during which the Performance Measures applicable to
a Performance Share Award shall be measured.
"Performance Share" shall mean a right, contingent upon the
attainment of specified Performance Measures within a specified
Performance Period, to receive one share of Common Stock, which
may be Restricted Stock, or in lieu of all or a portion thereof,
at the Committee's discretion, the Fair Market Value of such
Performance Share in cash.
"Performance Share Award" shall mean an award of
Performance Shares under this Plan.
"Permanent and Total Disability" shall have the meaning set
forth in Section 22(e)(3) of the Code or any successor thereto.
"Restricted Stock" shall mean shares of Common Stock that
are subject to a Restriction Period.
"Restriction Period" shall mean any period designated by
the Committee during which the Common Stock subject to a
Restricted Stock Award may not be sold, transferred, assigned,
pledged, hypothecated or otherwise encumbered or disposed of,
except as provided in this Plan or the Agreement relating to such
award.
"Stock Award" shall mean a Restricted Stock Award or a
Bonus Stock Award.
1.3 Administration. This Plan shall be administered by the
Committee. The Committee shall have the authority to determine
eligibility for awards hereunder and to determine the form,
amount and timing of each award to such persons and, if
applicable, the number of shares of Common Stock, and the number
of Performance Shares subject to such an award, the exercise
price associated with the award, the time and conditions of
exercise or settlement of the award and all other terms and
conditions of the award, including, without limitation, the
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form of the Agreement evidencing the award. The Committee
may, in its sole discretion and for any reason at any
time, subject to the requirements imposed under Section 162(m) of
the Code and regulations promulgated thereunder in the case of an
award intended to be qualified performance-based compensation,
take action such that (i) any or all outstanding options shall
become exercisable in part or in full, (ii) all or a portion of
the Restriction Period applicable to any outstanding Restricted
Stock Award shall lapse, (iii) all or a portion of the
Performance Period applicable to any outstanding Performance
Share Award shall lapse, (iv) the Performance Measures applicable
to any outstanding Restricted Stock Award (if any) and to any
outstanding Performance Share Award shall be deemed to be
satisfied at the maximum or any other level.
The Committee shall, subject to the terms of this Plan,
interpret this Plan and the application thereof, establish rules
and regulations it deems necessary or desirable for the
administration of this Plan and may impose, incidental to the
grant of an award, conditions with respect to the award, such as
limiting competitive employment or other activities. All such
interpretations, rules, regulations and conditions shall be
final, binding and conclusive.
The Committee shall keep minutes of its meetings and of
action taken by it without a meeting. A majority of the Committee
shall constitute a quorum. The acts of the Committee shall be
either (i) acts of a majority of the members of the Committee
present at any meeting at which a quorum is present or (ii) acts
approved in writing by all of the members of the Committee
without a meeting.
1.4 Eligibility. Participants in this Plan shall consist of such
directors, officers, and other employees of the Company and its
Subsidiaries from time to time, and any other entity designated
by the Board or the Committee (individually a "Subsidiary" and
collectively the "Subsidiaries") as the Committee, in its sole
discretion, may select from time to time. For purposes of this
Plan, reference to employment by the Company shall also mean
employment by a Subsidiary.
1.5 Shares Available. Subject to adjustment as provided in
Section 5.7, 3,500,000 shares of Common Stock shall be available
under this Plan, reduced by the sum of the aggregate number of
shares of Common Stock (i) that are issued upon the grant of a
Stock Award and (ii) which become subject to outstanding options
and outstanding Performance Shares. To the extent that shares of
Common Stock subject to an outstanding option, Stock Award or
Performance Shares are not issued or delivered by reason of the
expiration, termination, cancellation or forfeiture of such award
or by reason of the delivery or withholding of shares of Common
Stock to pay all or a portion of the exercise price of an award,
if any, or to satisfy all or a portion of the tax withholding
obligations relating to an award, then such shares of Common
Stock shall again be available under this Plan. If an award is
made in the form of an option coupled with a Performance Share
Award such that the Participant can receive the designated number
of shares either upon exercise of the option or upon earning of
the Performance Share, but not both, such coupled award shall be
treated as a single award of the designated number of shares for
purposes of this Section 1.5.
-4-
Shares of Common Stock shall be made available from
authorized and unissued shares of Common Stock, or authorized and
issued shares of Common Stock reacquired and held as treasury
shares or otherwise or a combination thereof.
To the extent required by Section 162(m) of the Code
and the rules and regulations thereunder, the maximum number of
shares of Common Stock with respect to which options or Stock
Awards or Performance Share Awards or a combination thereof may
be granted during any calendar year to any person shall be
250,000, subject to adjustment as provided in Section 5.7.
II. STOCK OPTIONS
2.1 Stock Options. The Committee may, in its discretion, grant
Incentive Stock Options or Non-Statutory Stock Options to
purchase shares of Common Stock to such eligible persons under
Section 1.4 as may be selected by the Committee.
The Committee may in its sole discretion, either at the
time of grant of an option or thereafter, determine that a
Participant who exercises an option (the "Original Option") shall
receive a new option (a "Replacement Option") for up to the
number of shares acquired upon exercise of the Original Option
and with an option price and other terms determined pursuant to
Sections 2.2 and 2.3 hereof (treating the date of exercise of the
Original Option as the date of the grant of the Replacement
Option) and with the same expiration date as the expiration date
of the Original Option; and the Committee may in its sole
discretion impose conditions in connection with such issuance of
Replacement Options consistent with the goal of encouraging stock
ownership by employees, including without limitation, holding
period requirements for shares received upon exercise of the
Original Option or restrictions delaying the exercisability of
the Replacement Option. In no event shall any such Replacement
Option include a provision for an automatic grant of another
Replacement Option of the type described in the preceding
sentence.
Options shall be subject to the following terms and
conditions and shall contain such additional terms and
conditions, not inconsistent with the terms of this Plan, as the
Committee shall deem advisable:
(a) Number of Shares and Purchase Price. The number of
shares and the purchase price per share of Common Stock subject
to an option shall be determined by the Committee, provided,
however, that the purchase price per share of Common Stock shall
not be less than 100% of the Fair Market Value of a share of
Common Stock on the date of grant of such option and provided
further, that if an Incentive Stock Option shall be granted to
any person who, at the time such option is granted, owns capital
stock possessing more than ten percent of the total combined
voting power of all classes of capital stock of the Company (or
of any parent or subsidiary as defined in Section 424 of the
Code) (a "Ten Percent Holder"), the
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purchase price per share of Common Stock shall be the
price (currently 110% of Fair Market Value) required by the Code
in order to constitute an Incentive Stock Option.
(b) Option Period and Exercisability. Each option, by
its terms, shall require the Participant to remain in the
continuous employ of the Company for at least one year following
the date of grant of the option before any part of the option
shall be exercisable, except in the case of a Change in Control.
The period during which an option may be exercised shall be
determined by the Committee; provided, however, that no Incentive
Stock Option shall be exercised later than ten years after its
date of grant; provided further, that if an Incentive Stock
Option shall be granted to a Ten Percent Holder, such option
shall not be exercised later than five years after its date of
grant. Once determined and stated in an Agreement with respect to
an option, the period during which an option can be exercised
shall not be further extended. The Committee may, in its
discretion, establish Performance Measures which shall be
satisfied or met as a condition to the grant of an option or to
the exercisability of all or a portion of an option. The
Committee shall determine whether an option shall become
exercisable in cumulative or non-cumulative installments and in
part or in full at any time. An exercisable option, or portion
thereof, may be exercised only for whole shares of Common Stock.
(c) Method of Exercise. An option may be exercised (i) by
giving written notice to the Company specifying the number of
whole shares of Common Stock to be purchased and accompanied by
payment therefor in full (or arrangement made for such payment to
the Company's satisfaction) either (A) in cash, (B) by delivery
(either actual delivery or by attestation procedures established
by the Company) of Mature Shares having an aggregate Fair Market
Value, determined as of the date of exercise, equal to the
aggregate purchase price payable by reason of such exercise, (C)
in cash by a broker-dealer acceptable to the Company to whom the
optionee has submitted an irrevocable notice of exercise or (D) a
combination of (A) and (B), in each case to the extent set forth
in the Agreement relating to the option and (ii) by executing
such documents as the Company may reasonably request. Any
fraction of a share of Common Stock which would be required to
pay such purchase price shall be disregarded and the remaining
amount due shall be paid in cash by the optionee. No certificate
representing Common Stock shall be delivered until the full
purchase price therefor has been paid (or arrangement made for
such payment to the Company's satisfaction).
2.2 Termination of Employment or Service. (a) Non-Statutory Stock
Options. Unless otherwise specified in the Agreement evidencing
an option, but subject to Section 2.1(b), if the employment with
the Company of a holder of an option (other than an Incentive
Stock Option) terminates by reason of (i) death, or (ii)
retirement on or after age 55 with a minimum of 10 years of
employment with or service to the company, or (iii) the
occurrence of such individual's Disability Date, such option
shall be exercisable for a period of three years following the
date of such termination of employment, but only to the extent
that such option was exercisable at the date of such termination
of employment.
If an optionee's employment is terminated for any
other reason, his option shall remain exercisable to the extent
that such option was exercisable at the date of such
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termination of employment, for a period of 90 days
following such termination of employment. Notwithstanding
anything to the contrary contained in the preceding sentence, if
an optionee's employment is terminated by the Company for Cause,
his rights under all options shall terminate on the effective
date of such optionee's termination of employment.
(b) Termination of Employment - Incentive Stock
Options. Unless otherwise specified in the Agreement evidencing
an option, but subject to Section 2.1(b), if the employment with
the Company of a holder of an Incentive Stock Option terminates
by reason of permanent and total disability (as defined in
Section 22(e)(3) of the Code), each Incentive Stock Option held
by such optionee shall be exercisable only to the extent that
such option was exercisable on the effective date of such
optionee's termination of employment by reason of permanent and
total disability and may thereafter be exercised by such optionee
(or such optionee's legal representative or similar person) until
the date which is one year after the effective date of such
optionee's termination of employment by reason of permanent and
total disability.
Unless otherwise specified in the Agreement evidencing an
option but subject to Section 2.1(b), if the employment with the
Company of a holder of an Incentive Stock Option terminates by
reason of death, each Incentive Stock Option held by such
optionee shall be exercisable only to the extent that such option
was exercisable on the date of such optionee's death and may
thereafter be exercised by such optionee's executor,
administrator, legal representative, beneficiary or similar
person until the date which is three years after the date of
death.
If the employment of a holder of an Incentive Stock Option
is terminated by the Company for Cause, each Incentive Stock
Option held by such optionee shall terminate automatically on the
effective date of such optionee's termination of employment.
Unless otherwise specified in the Agreement evidencing an option,
but subject to Section 2.1(b), if the employment with the Company
of a holder of an Incentive Stock Option terminates for any
reason other than permanent and total disability or death or
Cause, each Incentive Stock Option held by such optionee shall be
excisable only to the extent such option was exercisable on the
effective date of such optionee's termination of employment, and
may thereafter be exercised by such holder (or such holder's
legal representative or similar person) until the date which is
90 days after the effective date of such optionee's termination
of employment.
If the holder of an Incentive Stock Option dies during the
period set forth in the first paragraph of this Subsection (b)
following termination of employment by reason of Permanent and
Total Disability, or if the holder of an Incentive Stock Option
dies during the period set forth in the third paragraph of this
Subsection (b) following termination of employment for any reason
other than Permanent and Total Disability for death or Cause,
each Incentive Stock Option held by such optionee shall be
exercisable only to the extent such option was exercisable on
the date of the optionee's death and may thereafter be exercised
by the optionee's executor, administrator, legal representative,
beneficiary or similar person until the date which is three years
after the date of death.
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III. STOCK AWARDS
3.1 Stock Awards. The Committee may, in its discretion, grant
Stock Awards to such eligible persons under Section 1.4 as may be
selected by the Committee. The Agreement relating to a Stock
Award shall specify whether the Stock Award is a Restricted Stock
Award or Bonus Stock Award.
3.2 Terms of Stock Awards. Stock Awards shall be subject to the
following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of this
Plan, as the Committee shall deem advisable.
(a) Number of Shares and Other Terms. The number of shares
of Common Stock subject to a Restricted Stock Award or Bonus
Stock Award and the Performance Measures (if any) and Restriction
Period applicable to a Restricted Stock Award shall be determined
by the Committee.
(b) Vesting and Forfeiture. The Agreement relating to a
Restricted Stock Award shall provide, in the manner determined by
the Committee, in its discretion, and subject to the provisions
of this Plan, for the vesting of the shares of Common Stock
subject to such award (i) if specified Performance Measures are
satisfied or met during the specified Restriction Period or (ii)
if the holder of such award remains continuously in the
employment of or service to the Company during the specified
Restriction Period and for the forfeiture of the shares of Common
Stock subject to such award (x) if specified Performance Measures
are not satisfied or met during the specified Restriction Period
or (y) if the holder of such award does not remain continuously
in the employment of or service to the Company during the
specified Restriction Period.
Bonus Stock Awards shall not be subject to any Performance
Measures or Restriction Periods.
(c) Share Certificates. During the Restriction Period, a
certificate or certificates representing a Restricted Stock Award
may be registered in the holder's name and may bear a legend, in
addition to any legend which may be required pursuant to Section
5.6, indicating that the ownership of the shares of Common Stock
represented by such certificate is subject to the restrictions,
terms and conditions of this Plan and the Agreement relating to
the Restricted Stock Award. All such certificates shall be
deposited with the Company, together with stock powers or other
instruments of assignment (including a power of attorney), each
endorsed in blank with a guarantee of signature if deemed
necessary or appropriate by the Company, which would permit
transfer to the Company of all or a portion of the shares of
Common Stock subject to the Restricted Stock Award in the event
such award is forfeited in whole or in part. Upon termination of
any applicable Restriction Period (and the satisfaction or
attainment of applicable Performance Measures), or upon the grant
of a Bonus Stock Award, in each case subject to the Company's
right to require payment of any taxes in accordance with Section
5.5,
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a certificate or certificates evidencing ownership of the
requisite number of shares of Common Stock shall be delivered to
the holder of such award.
(d) Rights with Respect to Restricted Stock Awards. Unless
otherwise set forth in the Agreement relating to a Restricted
Stock Award, and subject to the terms and conditions of a
Restricted Stock Award, the holder of such award shall have all
rights as a stockholder of the Company, including, but not
limited to, voting rights, the right to receive dividends and the
right to participate in any capital adjustment applicable to all
holders of Common Stock; provided, however, that a distribution
with respect to shares of Common Stock, other than a
regular cash dividend, shall be deposited with the Company and
shall be subject to the same restrictions as the shares of Common
Stock with respect to which such distribution was made.
3.3 Termination of Employment or Service. (a) Disability,
Retirement and Death. Unless otherwise set forth in the Agreement
relating to a Restricted Stock Award, if the employment with or
service to the Company of the holder of such award terminates by
reason of (i) death, or (ii) retirement on or after age 55 (with
a minimum of 10 years of employment with or service to the
Company), or (iii) the occurrence of such Participant's
Disability Date, or (iv) termination of employment under any
other circumstances that the Committee may determine shall
warrant the application of this provision, the restrictions
imposed hereunder shall lapse with respect to such number of
shares of Restricted Stock, if any, as shall be determined by the
Committee, and the balance of such shares of Restricted Stock
shall be forfeited to the Company.
(b) Other Termination. Unless otherwise set forth in the
Agreement relating to a Restricted Stock Award, if the employment
with or service to the Company of the holder of a Restricted
Stock Award terminates for any other reason during the
Restriction Period, then the portion of such award which is
subject to a Restriction Period on the effective date of such
holder's termination of employment or service shall be forfeited
by such holder and such portion shall be canceled by the Company.
IV. PERFORMANCE SHARE AWARDS
4.1 Performance Share Awards. The Committee may, in its
discretion, grant Performance Share Awards to such eligible
persons under Section 1.4 as may be selected by the Committee.
4.2 Terms of Performance Share Awards. Performance Share Awards
shall be subject to the following terms and conditions and shall
contain such additional terms and conditions, not inconsistent
with the terms of this Plan, as the Committee shall deem
advisable.
(a) Number of Performance Shares and Performance Measures.
The number of Performance Shares subject to any award and the
Performance Measures and Performance Period applicable to such
award shall be determined by the Committee.
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(b) Vesting and Forfeiture. The Agreement relating to a
Performance Share Award shall provide, in the manner determined
by the Committee, in its discretion, and subject to the
provisions of this Plan, for the vesting of such award, if
specified Performance Measures are satisfied or met during the
specified Performance Period, and for the forfeiture of such
award, if specified Performance Measures are not satisfied or met
during the specified Performance Period.
(c) Settlement of Vested Performance Share Awards. The
Agreement relating to a Performance Share Award (i) shall specify
whether such award may be settled in shares of Common Stock
(including shares of Restricted Stock) or cash or a combination
thereof and (ii) may specify whether the holder thereof shall be
entitled to receive, on a current or deferred basis, dividend
equivalents, and, if determined by the Committee, interest on or
the deemed reinvestment of any deferred dividend equivalents,
with respect to the number of shares of Common Stock subject to
such award. If a Performance Share Award is settled in shares of
Restricted Stock, a certificate or certificates representing such
Restricted Stock shall be issued in accordance with Section
3.2(c) and the holder of such Restricted Stock shall have such
rights of a stockholder of the Company as determined pursuant to
Section 3.2(d). Prior to the settlement of a Performance Share
Award in shares of Common Stock, including Restricted Stock, the
holder of such award shall have no rights as a stockholder of the
Company with respect to the shares of Common Stock subject to
such award and shall have rights as a stockholder of the Company
in accordance with Section 5.10. Notwithstanding any other
provision of the Plan to the contrary, payments of cash, shares
of Common Stock, or any combination thereof to any Participant in
respect of the settlement of a Performance Share Award for any
Performance Period shall not exceed $5,000,000, with respect to
the cash payment for such award, and shall not exceed 250,000
shares of Common Stock, with respect to the Common Stock payment
for such award.
4.3 Termination of Employment. (a) Disability, Retirement and
Death. Unless otherwise set forth in the Agreement relating to a
Performance Share Award, if the employment with the Company of
the holder of such award terminates prior to the end of the
Performance Period applicable to such award by reason of (i)
death, or (ii) retirement on or after age 55 (with a minimum of
10 years of employment or service with the Company, (iii) the
occurrence of such Participant's Disability Date or (iv)
termination of employment under any other circumstances that the
Committee may determine shall warrant the application of this
provision, the Committee, in its sole discretion and taking into
consideration the performance of such Participant and the
performance of the Company during the Performance Period, may
authorize the payment to such Participant (or his legal
representative) at the end of the Performance Period of all or
any portion of the Performance Award which would have been paid
to such Participant for such Performance Period.
(b) Other Termination. Unless otherwise set forth in the
Agreement relating to a Performance Share Award, if the
employment with the Company of the holder of a Performance Share
Award terminates for any other reason prior to the end of a
Performance Period, then the portion of such award which is
subject to such Performance Period on the
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effective date of such holder's termination of employment
shall be forfeited and such portion shall be canceled
by the Company.
V. GENERAL
5.1 Effective Date and Term of Plan. This Plan shall be submitted
to the sole stockholder of the Company for approval and, if
approved, shall become effective as of January 1, 1998. This Plan
shall terminate ten years after its effective date, unless
terminated earlier by the Board. Termination of this Plan shall
not affect the terms or conditions of any award granted prior to
termination.
In the event that this Plan is not approved by the
sole stockholder of the Company before the date on which the
Company has a class of common equity securities required to be
registered under Section 12 of the Exchange Act, this Plan and
any awards granted hereunder shall be null and void.
5.2 Amendments. The Board may amend this Plan as it shall deem
advisable, subject to any requirement of stockholder approval
required by applicable law, rule or regulation, including Section
162(m) and Section 422 of the Code; provided, however, that no
amendment shall be made without stockholder approval if such
amendment would (a) increase the maximum number of shares of
Common Stock available under this Plan (subject to Section 5.7),
(b) effect any change inconsistent with Section 422 of the Code
or (c) extend the term of this Plan. No amendment may impair the
rights of a holder of an outstanding award without the consent of
such holder.
5.3 Agreement. Each award under this Plan shall be evidenced by
an Agreement setting forth the terms and conditions applicable to
such award. No award shall be valid until an Agreement is
executed by the Company and the recipient of such award and, upon
execution by each party and delivery of the Agreement to the
Company, such award shall be effective as of the effective date
set forth in the Agreement.
5.4 Non-Transferability of Awards. Unless otherwise specified in
the Agreement relating to an award, no award shall be
transferable other than by will, the laws of descent and
distribution or pursuant to beneficiary designation procedures
approved by the Company. Except to the extent permitted by the
foregoing sentence or the Agreement relating to an award, each
award may be exercised or settled during the holder's lifetime
only by the holder or the holder's legal representative or
similar person. Except to the extent permitted by the second
preceding sentence or the Agreement relating to an award, no
award may be sold, transferred, assigned, pledged, hypothecated,
encumbered or otherwise disposed of (whether by operation of law
or otherwise) or be subject to execution, attachment or similar
process. Upon any attempt to so sell, transfer, assign, pledge,
hypothecate, encumber or otherwise dispose of any such award,
such award and all rights thereunder shall immediately become
null and void.
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5.5 Tax Withholding. The Company shall have the right to require,
prior to the issuance or delivery of any shares of Common Stock
or the payment of any cash pursuant to an award made hereunder,
payment by the holder of such award of any Federal, state, local
or other taxes which may be required to be withheld or paid in
connection with such award. An Agreement may provide that (i) the
Company shall withhold whole shares of Common Stock which would
otherwise be delivered to a holder, having an aggregate Fair
Market Value determined as of the date the obligation to withhold
or pay taxes arises in connection with an award (the "Tax Date"),
or withhold an amount of cash which would otherwise be payable to
a holder, in the amount necessary to satisfy any such obligation
or (ii) the holder may satisfy any such obligation by any of the
following means: (A) a cash payment to the Company, (B) delivery
(either actual delivery or by attestation procedures established
by the Company) to the Company of shares of Common Stock having
an aggregate Fair Market Value, determined as of the Tax Date,
equal to the amount necessary to satisfy any such obligation, (C)
authorizing the Company to withhold whole shares of Common Stock
which would otherwise be delivered having an aggregate Fair
Market Value, determined as of the Tax Date, or withhold an
amount of cash which would otherwise be payable to a holder,
equal to the amount necessary to satisfy any such obligation, (D)
in the case of the exercise of an option, a cash payment by a
broker-dealer acceptable to the Company to whom the optionee has
submitted an irrevocable notice of exercise or (E) any
combination of (A), (B) and (C), in each case to the extent set
forth in the Agreement relating to the award; provided, however,
that the Company shall have sole discretion to disapprove of an
election pursuant to any of clauses (B)-(E). Any fraction of a
share of Common Stock which would be required to satisfy such an
obligation shall be disregarded and the remaining amount due
shall be paid in cash by the holder.
5.6 Restrictions on Shares. Each award made hereunder shall be
subject to the requirement that if at any time the Company
determines that the listing, registration or qualification of the
shares of Common Stock subject to such award upon any securities
exchange or under any law, or the consent or approval of any
governmental body, or the taking of any other action is necessary
or desirable as a condition of, or in connection with, the
exercise or settlement of such award or the delivery of shares
thereunder, such award shall not be exercised or settled and such
shares shall not be delivered unless such listing, registration,
qualification, consent, approval or other action shall have been
effected or obtained, free of any conditions not acceptable to
the Company. The Company may require that certificates evidencing
shares of Common Stock delivered pursuant to any award made
hereunder bear a legend indicating that the sale, transfer or
other disposition thereof by the holder is prohibited except in
compliance with the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
5.7 Adjustment. In the event of any stock split, stock
dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation,
spin-off or other similar change in capitalization or event, or
any distribution to holders of Common Stock other than a regular
cash dividend, the number and class of securities available under
this Plan, the number and class of securities subject to each
outstanding option and the purchase price per security, the
number and class of securities subject to each outstanding
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Stock Award, and the terms of each outstanding
Performance Share shall be appropriately adjusted by the
Committee, such adjustments to be made in the case of outstanding
options without an increase in the aggregate purchase price. The
decision of the Committee regarding any such adjustment shall be
final, binding and conclusive. If any such adjustment would
result in a fractional security being (a) available under this
Plan, such fractional security shall be disregarded, or (b)
subject to an award under this Plan, the Company shall pay the
holder of such award, in connection with the first the vesting,
exercise or settlement of such award in whole or in part
occurring after such adjustment, an amount in cash determined by
multiplying (i) the fraction of such security (rounded to the
nearest hundredth) by (ii) the excess, if any, of (A) the Fair
Market Value on the vesting, exercise or settlement date over (B)
the exercise price, if any, of such award.
5.8 Change in Control.
(a) (1) Notwithstanding any provision in this Plan or any
Agreement, in the event of a Change in Control pursuant to
Section (b)(3) or (4) below in connection with which the holders
of Common Stock receive shares of common stock that are
registered under Section 12 of the Exchange Act, (i) all
outstanding options shall immediately become exercisable in full,
(ii) the Restriction Period applicable to any outstanding
Restricted Stock Award shall lapse, (iii) the Performance Period
applicable to any outstanding Performance Share shall lapse, (iv)
the Performance Measures applicable to any outstanding Restricted
Stock Award (if any) and to any outstanding Performance Share
shall be deemed to be satisfied at the maximum level and (v)
there shall be substituted for each share of Common Stock
available under this Plan, whether or not then subject to an
outstanding award, the number and class of shares into which each
outstanding share of Common Stock shall be converted pursuant to
such Change in Control. In the event of any such substitution,
the purchase price per share of an option shall be appropriately
adjusted by the Committee, such adjustments to be made in the
case of outstanding options without an increase in the aggregate
purchase price.
(2) Notwithstanding any provision in this Plan or any
Agreement, in the event of a Change in Control pursuant to
Section (b)(1) or (2) below, or in the event of a Change in
Control pursuant to Section (b)(3) or (4) below in connection
with which the holders of Common Stock receive consideration
other than shares of common stock that are registered under
Section 12 of the Exchange Act, each outstanding award shall be
surrendered to the Company by the holder thereof, and each such
award shall immediately be canceled by the Company, and the
holder shall receive, within ten days of the occurrence of a
Change in Control pursuant to Section (b)(1) or (2) below or
within ten days of the approval of the stockholders of the
Company contemplated by Section (b)(3) or (4) below, a cash
payment from the Company in an amount equal to (i) in the case of
an option, the number of shares of Common Stock then subject to
such option, multiplied by the excess, if any, of the greater of
(A) the highest per share price offered to stockholders of the
Company in any transaction whereby the Change in Control takes
place and (B) the Fair Market Value of a share of Common Stock on
the date of occurrence of the Change in Control, over the
purchase price per share of Common Stock subject to the option,
(ii) in the case of a Restricted Stock Award,
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the number of shares of Common Stock then subject to
such award, multiplied by the greater of (A) the highest per
share price offered to stockholders of the Company in any
transaction whereby the Change in Control takes place and (B) the
Fair Market Value of a share of Common Stock on the date of
occurrence of the Change in Control or (iii) in the case of a
Performance Share Award, the number of Performance Shares then
subject to such award, multiplied by the greater of (A) the
highest per share price offered to stockholders of the Company in
any transaction whereby the Change in Control takes place and (B)
the highest Fair Market Value of a share of Common Stock during
the 90-day period immediately preceding the date of the Change in
Control. The Company may, but is not required to, cooperate with
any person who is subject to Section 16 of the Exchange Act to
assure that any cash payment in accordance with the foregoing to
such person is made in compliance with Section 16 and the rules
and regulations thereunder.
(b) "Change in Control" shall mean:
(1) the acquisition by any individual, entity or group
(a "Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act, of
beneficial ownership within the meaning of Rule 13d-3 promulgated
under the Exchange Act, of 15% or more of either (i) the then
outstanding shares of common stock of the Company (the
"Outstanding Common Stock") or (ii) the combined voting power of
the then outstanding securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Voting
Securities"); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition
resulting from the exercise of an exercise, conversion or
exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company),
(B) any acquisition by the Company, (C) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company or
(D) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of Subsection (3)
of this Section 5.8(b); provided further, that for purposes of
clause (B), if any Person (other than the Company or any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company) shall
become the beneficial owner of 15% or more of the Outstanding
Common Stock or 15% or more of the Outstanding Voting Securities
by reason of an acquisition by the Company, and such Person
shall, after such acquisition by the Company, become the
beneficial owner of any additional shares of the Outstanding
Common Stock or any additional Outstanding Voting Securities and
such beneficial ownership is publicly announced, such additional
beneficial ownership shall constitute a Change in Control;
(2) individuals who, as of the beginning of any
consecutive two-year period constitute the Board of Directors
(the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided that any individual who
subsequently becomes a director of the Company and whose
election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of
the directors then comprising the Incumbent Board shall be deemed
a member of the Incumbent Board; and provided
-14-
further, that any individual who was initially elected
as a director of the Company as a result of an actual or
threatened election contest, as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act, or
any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall
not be deemed a member of the Incumbent Board;
(3) the consummation of a reorganization, merger or
consolidation of the Company or sale or other disposition of all
or substantially all of the assets of the Company (a "Corporate
Transaction"); excluding, however, a Corporate Transaction
pursuant to which (i) all or substantially all of the individuals
or entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and the Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than 60% of, respectively, the
outstanding shares of common stock, and the combined voting power
of the outstanding securities of such corporation entitled to
vote generally in the election of directors, as the case may be,
of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result
of such transaction owns the Company or all or substantially all
of the Company's assets either directly or indirectly) in
substantially the same proportions relative to each other as
their ownership, immediately prior to such Corporate Transaction,
of the Outstanding Common Stock and the Outstanding Voting
Securities, as the case may be, (ii) no Person (other than: the
Company; any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company; the corporation resulting from such Corporate
Transaction; and any Person which beneficially owned, immediately
prior to such Corporate Transaction, directly or indirectly, 15%
or more of the Outstanding Common Stock or the Outstanding Voting
Securities, as the case may be) will beneficially own, directly
or indirectly, 15% or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the
outstanding securities of such corporation entitled to vote
generally in the election of directors and (iii) individuals who
were members of the Incumbent Board will constitute at least a
majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or
(4) the consummation of a plan of complete liquidation
or dissolution of the Company.
5.9 No Right of Participation or Employment. No person shall have
any right to participate in this Plan. The Committee's selection
of a person to participate in this Plan at any time shall not
require the Committee to select such person to participate in
this Plan at any other time. Neither this Plan nor any award made
hereunder shall confer upon any person any right to continued
employment by the Company, any Subsidiary or any affiliate of the
Company or affect in any manner the right of the Company, any
Subsidiary or any affiliate of the Company to terminate the
employment of any person at any time without liability hereunder.
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5.10 Rights as Stockholder. No person shall have any right as a
stockholder of the Company with respect to any shares of Common
Stock or other equity security of the Company which is subject to
an award hereunder unless and until such person becomes a
stockholder of record with respect to such shares of Common Stock
or equity security.
5.11 Governing Law. This Plan, each award hereunder and the
related Agreement, and all determinations made and actions taken
pursuant thereto, to the extent not otherwise governed by the
Code or the laws of the United States, shall be governed by the
laws of the State of Delaware and construed in accordance
therewith without giving effect to principles of conflicts of
laws.
5.12 Foreign Employees. Without amending this Plan, the Committee
may grant awards to eligible persons who are foreign nationals on
such terms and conditions different from those specified in this
Plan as may in the judgment of the Committee be necessary or
desirable to foster and promote achievement of the purpose of
this Plan and, in furtherance of such purpose the Committee may
make such modifications, amendments, procedures, subplans and the
like as may be necessary or advisable to comply with provisions of
laws in other countries or jurisdictions in which the Company or
its Subsidiaries operates or has employees.
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Exhibit 10.11
FORM OF CORN PRODUCTS INTERNATIONAL
EXECUTIVE SEVERANCE AGREEMENT
Agreement, made this ___ day of ____________, 19__, by
and between CORN PRODUCTS INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and ______________________ (the
"Executive").
WHEREAS, the Executive is a key employee of the Company
or a subsidiary of the Company as defined in Section 1(ii) hereof
("Subsidiary"), and
WHEREAS, the Board of Directors of the Company (the
"Board") considers the maintenance of a sound management to be
essential to protecting and enhancing the best interests of the
Company and its stockholders and recognizes that the possibility
of a change in control raises uncertainty and questions among key
employees and may result in the departure or distraction of such
key employees to the detriment of the Company and its
stockholders; and
WHEREAS, the Board wishes to assure that it will have
the continued dedication of the Executive and the availability of
the Executive's advice and counsel notwithstanding the
possibility, threat or occurrence of a bid to take over control
of the Company, and to induce the Executive to remain in the
employ of the Company or a Subsidiary; and
WHEREAS, the Executive is willing to continue to serve
the Company and its Subsidiaries taking into account the
provisions of this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and
the respective covenants and agreements of the parties herein
contained, the parties agree as follows:
1. Change in Control. Benefits shall be provided under
Section 3 hereof only in the event there shall have occurred a
"Change in Control", as such term is defined below, and the
Executive's employment by the Company and its Subsidiaries shall
thereafter have terminated in accordance with Section 2 below
within the period beginning on the date of the "Change in
Control" and ending on the second anniversary of the date of the
"Change in Control" (the "Protection Period"). If any Protection
Period terminates without the Executive's employment having
terminated, any subsequent "Change in Control" shall give rise to
a new Protection Period. No benefits shall be paid under Section
3 of this Agreement if the Executive's employment terminates
outside of a Protection Period.
(i) For purposes of this Agreement, a "Change in
Control" shall mean the occurrence of any of the following
events:
(A) any person (within the meaning of Sections
13(d) and 14(d) of the Securities Exchange Act of
1934, as amended) ("Person") (but excluding the
Company, a Subsidiary, or a trustee or other fiduciary
holding securities under any
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employee benefit plan or employee stock plan of the
Company or a Subsidiary) becomes, directly or indirectly,
the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) of 15% or
more of the combined voting power of the then outstanding
voting securities entitled to vote generally in the
election of directors ("Voting Securities") of the
Company, provided, however, that there shall be
excluded, for this purpose, any acquisition of Voting
Securities either from the Company or pursuant to a
Stock Combination (as defined hereinafter); or
(B) any Person commences a tender offer or
exchange offer which, if successful, would result in
such Person becoming the "beneficial owner" of at
least 15% of the outstanding Voting Securities of the
Company; provided, however, that the Board shall have
the right to delay the date on which a Change in
Control shall be deemed to occur pursuant to this
clause (B), but in no event beyond the earlier of (a)
the date of the public announcement that the Board has
determined to recommend, or remain neutral toward,
such offer, or (b) the earliest date on which there is
a purchase of any Voting Securities of the Company
pursuant to such offer; or
(C) during any period of two consecutive years
individuals who at the beginning of such period
constitute the Board (including for this purpose any
new director whose election by the Board or nomination
for election by the Company's
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stockholders was approved by a vote of at least two-
thirds of the directors then still in office who either
were directors at the beginning of the period or whose
election or nomination for election was previously so
approved (such individuals and such new directors
being "Continuing Directors")) cease for any reason to
constitute a majority of the Board; or
(D) the stockholders of the Company approve a
merger, consolidation, reorganization or sale of
substantially all of the assets of the Company
("Combination") with any other corporation or legal
person, other than a Combination which (a) is approved
by a majority of the directors of the Company who are
Continuing Directors at the time of such approval, and
(b) would result in the Common Stock of the Company
outstanding immediately prior thereto remaining
outstanding or being converted into voting common
stock, or its equivalent, of either the surviving
entity or the Person owning directly or indirectly
all the common stock, or its equivalent, of the
surviving entity which voting common stock, or its
equivalent, is listed on a registered United States
national securities exchange or is approved for
quotation and trading on the National Association of
Securities Dealers Automated Quotation National Market
System ("Stock Combination"); or
(E) the stockholders of the Company approve a
plan of complete liquidation of the Company, but only
if a substantial portion of the assets of the
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Company continue to be used in a business after such
liquidation, or an agreement for the sale or
disposition by the Company of all or substantially all
the Company's assets.
(ii) For purposes of this Agreement, the term
"Subsidiary" shall mean any corporation in which the
Company possesses directly or indirectly fifty percent
(50%) or more of the total combined voting power of all
classes of stock.
2. Termination Following Change in Control. The
Executive shall be entitled to the benefits provided in Section 3
hereof upon any termination of his or her employment with the
Company and its Subsidiaries within a Protection Period, except a
termination of employment (a) because of his or her death, (b)
because of a "Disability", (c) by the Company for "Cause", or (d)
by the Executive other than for "Good Reason".
(i) Disability. The Executive's employment shall be
deemed to have terminated because of a "Disability" on the
date on which the Executive becomes eligible to receive
long-term disability benefits under the Company's Master
Welfare and Cafeteria Plan (the "Cafeteria Plan") (or any
other plan), or a similar long-term disability plan of a
Subsidiary, or a successor to the Cafeteria Plan or to any
such similar plan which is applicable to the Executive. If
the Executive is not covered for long-term disability benefits
by the Cafeteria Plan or a similar or successor long-term
disability plan, the Executive shall be deemed to have
terminated because of a "Disability" on the date on
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which he or she would have become eligible to receive long-term
disability benefits if he or she were covered for long-term
disability benefits by the Company's Cafeteria Plan.
(ii) Cause. Termination of the Executive's employment
by the Company or a Subsidiary for "Cause" shall mean
termination by reason of (A) the Executive's willful
engagement in conduct which involves dishonesty or moral
turpitude which either (1) results in substantial personal
enrichment of the Executive at the expense of the Company
or any of its Subsidiaries, or (2) is demonstrably and
materially injurious to the financial condition or
reputation of the Company or any of its Subsidiaries, (B)
the Executive's willful violation of the provisions of the
confidentiality or non-competition agreement entered into
between the Company or any of its Subsidiaries and the
Executive or (C) the commission by the Executive of a
felony. An act or omission shall be deemed "willful" only
if done, or omitted to be done, in bad faith and without
reasonable belief that it was in the best interest of the
Company and its Subsidiaries. Notwithstanding the
foregoing, the Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been
delivered to the Executive a written notice of termination
from the Compensation and Nominating Committee of the Board
or any successor thereto (the "Committee") after reasonable
notice to the Executive and an opportunity for the
Executive, together with his or her counsel, to be heard
before the Committee, finding that, in the good faith
opinion of such Committee, the Executive was guilty of
conduct set forth above in clause (A) or (B) of the first
sentence of this subsection (ii) and specifying the
particulars in detail.
-6-
(iii) Without Cause. The Company or a Subsidiary may
terminate the employment of the Executive without Cause
during a Protection Period only by giving the Executive
written notice of termination to that effect. In that
event, the Executive's employment shall terminate on the
last day of the month in which such notice is given (or
such later date as may be specified in such notice).
(iv) Good Reason. Termination of employment by the
Executive for "Good Reason" shall mean termination within
a Protection Period:
(A) if there has occurred a reduction by the
Company or a Subsidiary in the Executive's base salary
in effect immediately before the beginning of the
Protection Period or as increased from time to time
thereafter;
(B) if the Company or a Subsidiary, without the
Executive's written consent, has required the
Executive to be relocated anywhere in excess of
thirty-five (35) miles from his or her office location
immediately before the beginning of the Protection
Period, except for required travel on the business of
the Company or a Subsidiary to an extent substantially
consistent with the Executive's business travel
obligations immediately before the beginning of the
Protection Period;
(C) if there has occurred a failure by the
Company or a Subsidiary to maintain plans providing
benefits substantially the same as those provided by any
-7-
benefit or compensation plan, retirement or pension
plan, stock option plan, life insurance plan,
health and accident plan or disability plan in which
the Executive is participating immediately before the
beginning of the Protection Period, or if the Company
or a Subsidiary has taken any action which would
adversely affect the Executive's participation in or
materially reduce the Executive's benefits under
any of such plans or deprive the Executive of any
material fringe benefit enjoyed by the Executive
immediately before the beginning of the Protection
Period, or if the Company or a Subsidiary has failed
to provide the Executive with the number of paid
vacation days to which he or she would be entitled in
accordance with the applicable vacation policy of the
Company or Subsidiary as in effect immediately before
the beginning of the Protection Period;
(D) if the Company or a Subsidiary has reduced in
any manner which the Executive reasonably considers
important the Executive's title, job authorities or
responsibilities immediately before the beginning of
the Protection Period;
(E) if the Company has failed to obtain the
assumption of the obligations contained in this
Agreement by any successor as contemplated in Section
7(ii) hereof; or
(F) if there occurs any purported termination of
the Executive's employment by the Company or a
Subsidiary which is not effected pursuant to a
-8-
written notice of termination as described in subsection
(ii) or (iii) above; and for purposes of this Agreement,
no such purported termination shall be effective.
The Executive shall exercise his or her right to
terminate his or her employment for Good Reason by giving
the Company a written notice of termination specifying in
reasonable detail the circumstances constituting such Good
Reason. However, the Company shall have 30 days to "cure"
such that the circumstances constituting such Good Reason
are eliminated. The Executive's employment shall terminate
at the end of such 30-day period only if the Company has
failed to cure such circumstances constituting the Good
Reason.
A termination of employment by the Executive within a
Protection Period shall be for Good Reason if one of the
occurrences specified in this subsection (iv) shall have
occurred (and subject to the cure provision of the
immediately preceding paragraph), notwithstanding that the
Executive may have other reasons for terminating
employment, including employment by another employer which
the Executive desires to accept.
(v) Transfers; Sale of Subsidiary. A transfer of
employment from the Company to a Subsidiary, from a
Subsidiary to the Company, or between Subsidiaries shall
not be considered a termination of employment for purposes
of this Agreement. If the Company's ownership of a
corporation is reduced so as to cause such corporation to
cease to be a "Subsidiary" as defined in Section 1(ii) of
this Agreement and the Executive
-9-
continues in employment with such corporation, the Executive
shall not be considered to have terminated employment for
purposes of this Agreement and the Executive shall have no right
to any benefits pursuant to this Section 3 unless (a) a Change
in Control occurred prior to such reduction in ownership and
(b) the Executive's employment terminates within the
Protection Period beginning on the date of such Change in
Control under circumstances that would have entitled the
Executive to benefits if such corporation were still a
Subsidiary.
3. Benefits Upon Termination Within Protection Period.
If, within a Protection Period, the Executive's employment by the
Company or a Subsidiary shall terminate other than (a) because of
his or her death, (b) because of a Disability, (c) by the Company
for Cause, or (d) by the Executive other than for Good Reason,
the Executive shall be entitled to the benefits provided for
below:
(i) The Company or a Subsidiary shall pay to the
Executive through the date of the Executive's termination
of employment salary at the rate then in effect, together
with salary in lieu of vacation accrued to the date on
which his or her employment terminates, in accordance with
the standard payroll practices of the Company or
Subsidiary. The Company or Subsidiary shall also pay to the
Executive any bonus relating to the year or portion thereof
ending on the date of his or her termination, calculated
based on the assumption that the highest possible target
was achieved, prorated for such year or portion thereof.
-10-
(ii) The Company shall pay the Executive as a
severance payment an amount equal to three times the sum of
(A) his or her highest annual salary in effect during any
period of 12 consecutive months within the 36 months
immediately preceding his or her date of termination of
employment, and (B) the highest annual bonus awarded to the
Executive under the Company's Annual Incentive Program or a
similar bonus plan of a Subsidiary (or a successor to any
such bonus plan) in respect of any of 3 calendar years
immediately preceding the calendar year in which his or her
date of termination of employment falls. Such severance
payment shall be paid in a lump sum within 10 business days
after the date of such termination of employment.
(iii) During the period of 36 months beginning on the
date of the Executive's termination of employment (the
"Benefit Period"), the Executive shall be deemed to remain
an employee of the Company or the applicable Subsidiary for
purposes of the applicable medical and insurance plans of
the Company (including any life insurance plan) and its
Subsidiaries (but excluding any disability, business
travel, or spending account plans), and shall be entitled
to receive the benefits available to employees thereunder,
provided that continued participation is possible under
applicable law and the terms of such plan or program, and
provided, further, that if the Executive would qualify for
retiree benefits during the Benefit Period under the
applicable medical or insurance plan without regard to this
Agreement, the Executive shall instead be entitled to receive
the benefits available to retirees in accordance with the terms
of such plan. In the event that the Executive's participation
in any such benefit plan or program is barred, the Company shall
-11-
arrange to provide the Executive with substantially similar
benefits or the after-tax cash equivalent. However, to the
extent the Executive receives substantially the same
benefit as one or more of the benefits described above in
this subsection (iii) pursuant to other employment, the
Company's obligation to provide such benefit (or after-tax
cash equivalent) shall cease during the time that the
Executive is receiving such benefit from other employment.
(iv) The Company shall supplement the benefits payable
under the Company's Cash Balance Plan for Salaried
Employees or any successor plan and the Company's
Supplemental Executive Retirement Plan or any successor
plan (each determined without regard to this Section 3) by
providing to the Executive the additional benefits that the
Executive would have been entitled to receive if he or she
had remained in the employment of the Company during the
Benefit Period earning compensation at the rate in effect
on the date his or her employment terminates. The
supplemental benefits pursuant to this subsection (iv)
shall be paid in a lump sum within 10 business days after
the date of such termination of employment.
(v) Any restricted stock or other stock-based awards
granted to the Executive pursuant to the Company's 1998
Stock Incentive Plan (the "Incentive Plan") that are not
vested shall vest on the date of his or her termination.
The Executive's beneficiary with respect to such benefits
shall be the same person or persons as determined under the
respective plan.
-12-
(vi) During the period of one year beginning on the
date of the Executive's termination of employment, the
Company shall provide the Executive with executive-level
out placement services.
(vii) During the period of three months beginning on
the date of the Executive's termination of employment, the
Company shall pay the Executive the same level of personal
allowances (such as club dues and automobile expenses) as
the Executive received immediately prior to his or her
termination of employment.
(viii) The Executive shall be entitled to all payments
and benefits provided for by or pursuant to this Section 3
whether or not he or she seeks or obtains other employment,
except as provided in subsection (iii).
4. Parachute Payments.
If any payment or benefit received by or in respect of
the Executive under this Agreement or any other plan, arrangement
or agreement with the Company or any of its Subsidiaries,
including without limitation any payment or benefit under the
Incentive Plan and any predecessor or successor thereto
(determined without regard to any additional payments required
under this Section 4 and Appendix A) (a "Payment") would be
subject to the tax (the "Excise Tax") imposed by Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code") (or
any similar tax that may hereafter be imposed), the Company shall
pay to the Executive with
-13-
respect to such Payment at the time specified in Appendix A an
additional amount (the "Gross-up Payment") such that the net
amount retained by the Executive from the Payment and the
Gross-up Payment, after reduction for any Excise Tax upon the
Payment and any Federal, state and local income tax and Excise
Tax upon the Gross-up Payment, shall be equal to the Payment. The
calculation and payment of the Gross-up Payment shall be subject
to the provisions of Appendix A. The Executive shall be entitled
to Gross-up Payments pursuant to this Section 4 irrespective of
whether the Executive has satisfied the conditions for receiving
benefits pursuant to Section 3 of this Agreement.
5. No Other Severance Benefits;
Right to Other Plan Benefits
In the event of termination of the Executive's
employment within a Protection Period under circumstances
entitling the Executive to benefits hereunder, the Executive
shall not be entitled to any other severance benefits except
those provided by or pursuant to this Agreement, and the
Executive hereby waives any claim against the Company or any of
its Subsidiaries or affiliates for any additional severance
benefits to which he or she might otherwise be entitled. Except
as provided in the preceding sentence, nothing in this Agreement
shall be construed as limiting in any way any rights or benefits
that the Executive may have pursuant to the terms of any other
plan, program or arrangement maintained by the Company or any of
its Subsidiaries or affiliates.
6. Termination of Employment Agreements.
-14-
Any and all Employment Agreements entered into between
the Company or any of its Subsidiaries and the Executive prior to
the date of this Agreement are hereby terminated.
7. Termination and Amendment; Successors;
Binding Agreement.
(i) This Agreement shall terminate on the close of
business on the date preceding the third anniversary of the
date of this Agreement; provided, however, that commencing
on the third anniversary of the date of this Agreement and
each anniversary of the date of this Agreement thereafter,
the term of this Agreement shall automatically be
extended for one additional year unless at least 60 days
prior to such anniversary date, the Company or the
Executive shall have given notice to the other party, in
accordance with Section 8, that this Agreement shall not be
extended. This Agreement may be amended only by an
instrument in writing signed by the Company and the
Executive. The Company expressly acknowledges that, during
the term of this Agreement, the Executive shall have a
binding and irrevocable right to the benefits set forth
hereunder in the event of his or her termination of
employment during a Protection Period to the extent
provided in Section 2. Any purported amendment or
termination of this Agreement by the Company, other than
pursuant to the terms of this Section 7(i), shall be
ineffective, and the Executive shall not lose any right
hereunder by failing to contest such a purported amendment
or termination.
(ii) The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business
-15-
and/or assets of the Company, to expressly assume and agree
to honor this Agreement in the same manner and to the same
extent that the Company would be required to so honor if no
such succession had taken place. Failure of the Company to
obtain such agreement prior to the effectiveness of any such
succession shall be a violation of this Agreement and shall
entitle the Executive to benefits from the Company or such
successor in the same amount and on the same terms as the
Executive would be entitled hereunder if he or she
terminated his or her employment for Good Reason, except
that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed
the date of termination of employment. As used in this
subsection (ii), "Company" shall mean the Company
hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the
agreement provided for in this subsection (ii) or which
otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law. The Company shall
promptly notify the Executive of any succession by purchase,
merger, consolidation or otherwise to all or substantially
all the business and/or assets of the Company and shall
state whether or not the successor has executed the
agreement required by this subsection (ii) and, if so, shall
make a copy of such agreement available to the Executive.
(iii) This Agreement and all rights of the Executive
hereunder shall inure to the benefit of, and shall be
enforceable by, the Executive and the Executive's legal
representatives. If the Executive should die while any
amounts remain payable to him or her
-16-
hereunder, all such amounts shall be paid to his or her
designated beneficiary or, if there be no such beneficiary,
to his or her estate.
(iv) The Company expressly acknowledges and agrees
that the Executive shall have a contractual right to the
benefits provided hereunder, and the Company expressly
waives any ability, if possible, to deny liability for any
breach of its contractual commitment hereunder upon the
grounds of lack of consideration, accord and satisfaction
or any other defense. If any dispute arises after a Change
in Control as to whether the Executive is entitled to
benefits under this Agreement, there shall be a presumption
that the Executive is entitled to such benefits and the
burden of proving otherwise shall be on the Company.
(v) The Company's obligation to provide the benefits
set forth in this Agreement shall be absolute and
unconditional and shall not be affected by any
circumstances, including, without limitation, any set-off,
counterclaim, recoupment, or other right which the Company
or any Subsidiary may have against the Executive or anyone
else. All amounts payable by the Company hereunder shall be
paid without notice or demand. Each and every payment made
hereunder by the Company or any Subsidiary shall be final,
and neither the Company nor any Subsidiary will seek to
recover all or any portion of such payment from the
Executive or from whomsoever may be entitled thereto, for
any reason whatsoever.
-17-
8. Notice. All notices of termination and other
communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered by
hand or mailed by United States registered mail, return receipt
requested, addressed as follows:
If to the Executive:
_________________________
_________________________
_________________________
If to the Company:
Corn Products International, Inc.
Moffett Technical Center
6500 Archer Road/ Box 345
Summit-Argo, Illinois 60501-0345
Attention: Vice President - Human Resources
or to such other address as either party may have furnished to
the other in writing in accordance herewith.
9. Miscellaneous. No provision of this Agreement may
be waived or modified unless such waiver or modification is in
writing and signed by the Executive and the Company's Chief
Executive Officer or such other officer as may be designated by
the Board. No waiver by either party of any breach by the other
party of, or compliance with, any provision of this Agreement
shall be deemed a waiver of similar or dissimilar provisions at
the same or any prior or subsequent time. The validity,
interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Illinois, without
regard to its principles of conflict of laws, and by applicable
laws of the United States.
-18-
10. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision, which shall remain in full
force and effect.
11. Legal Expenses; Dispute Resolution; Arbitration;
Pre-Judgment Interest.
(i) The Company shall promptly pay all legal fees and
related expenses incurred by the Executive in seeking to
obtain or enforce any right or benefit under this Agreement
(including all fees and expenses, if any, incurred in
seeking advice in connection therewith).
(ii) If any dispute or controversy arises under or in
connection with this Agreement, including without
limitation any claim under any Federal, state or local law,
rule, decision or order relating to employment or the fact
or manner of its termination, the Company and the Executive
shall attempt to resolve such dispute or controversy
through good faith negotiations.
(iii) If such parties fail to resolve such dispute or
controversy within ninety days, such dispute or controversy
shall, if the Executive so elects, be settled by
arbitration, conducted before a panel of three arbitrators
in Chicago, Illinois in accordance with the applicable
rules and procedures of the Center for Public Resources
then in effect. Judgment upon the award rendered by the
arbitrators may be entered in any court having
-19-
jurisdiction. Such arbitration shall be final and binding
on the parties. Costs of any arbitration, including,
without limitation, reasonable attorneys' fees of both
parties, shall be borne by the Company.
(iv) If such parties fail to resolve such dispute or
controversy within ninety days and the Executive does not
elect arbitration, legal proceedings may be instituted, in
which event the Company shall be required to pay the
Executive's legal fees and related expenses to the extent
set forth in subsection (i) above.
(v) Pending the resolution of any arbitration or court
proceeding, the Company shall continue payment of all
amounts due the Executive under this Agreement and all
benefits to which the Executive is entitled, including
medical and life insurance benefits, other than those
specifically at issue in the arbitration or court
proceeding and excluding long term disability benefits.
(vi) If the Executive is awarded amounts pursuant to
arbitration or court proceeding, the Company shall also pay
pre-judgment interest on such amounts calculated at the
Prime Rate (as defined below) in effect on the date of such
payment. For purposes of this Agreement, the term "Prime
Rate" shall mean the prime rate as published in the Wall
Street Journal Midwest edition showing such rate in effect
as of the first business day of each calendar quarter.
-20-
* * * * *
IN WITNESS WHEREOF, the parties have executed this
Agreement on the day and year first above written.
CORN PRODUCTS INTERNATIONAL, INC.
By:____________________________
EXECUTIVE
_______________________________
-21-
Appendix A
Gross-up Payments
The following provisions shall be applicable with
respect to the Gross-up Payments described in Section 4:
(a) For purposes of determining whether any of the
Payments will be subject to the Excise Tax and the amount
of such Excise Tax, (a) all of the Payments received or to
be received shall be treated as "parachute payments" within
the meaning of Section 280G(b)(2) of the Code, and all
"excess parachute payments" within the meaning of Section
280G(b)(1) of the Code shall be treated as subject to the
Excise Tax unless, in the opinion of tax counsel selected
by the Executive and reasonably acceptable to the Company,
the Payments (in whole or in part) do not constitute
parachute payments, including by reason of Section
280G(b)(4)(A) of the Code, or excess parachute payments (as
determined after application of Section 280G(b)(4)(B) of
the Code), and (b) the value of any non-cash benefits or
any deferred payment or benefit shall be determined by
independent auditors selected by the Executive and
reasonably acceptable to the Company in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-up Payment
the Executive shall be deemed to pay Federal income taxes
at the highest marginal rate of Federal income taxation in
the calendar year in which the Gross-up Payment is to be
made and state and local income taxes at the highest
marginal rate of taxation to which such payment could be
subject based upon the state and locality of the Executive's
residence or employment, net of the maximum reduction
in Federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that
the Excise Tax is subsequently determined to be less than
the amount taken into account hereunder at the time the
Gross-up Payment is made, the Executive shall repay to
Company, at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the
Gross-up Payment attributable to such reduction (plus the
portion of the Gross-up Payment attributable to the Excise
Tax and Federal and state and local income tax imposed on
the portion of the Gross-up Payment being repaid by the
Executive if such repayment results in a reduction in Excise
Tax and/or a Federal and state and local income tax
deduction), plus interest on the amount of such repayment at
the Federal short-term rate as defined in Section
1274(d)(1)(C)(i) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account
hereunder at the time the Gross-up Payment is made
(including by reason of any payments the existence or amount
of which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional gross-up
payment in respect of such excess (plus any interest,
penalties or additions payable with respect to such excess)
at the time that the amount of such excess is finally
determined. Notwithstanding the foregoing, the Company shall
withhold from any payment due to the Executive the amount
required by law to be so withheld under Federal, state or
local wage withholding requirements or otherwise, and shall
pay over to the appropriate government authorities the
amount so withheld.
(b) The Gross-up Payment with respect to a Payment
shall be paid not later than the thirtieth day following
the date of the Payment; provided, however, that if the
amount of such Gross-up Payment or portion thereof cannot
be finally determined on or
before such day, the Company shall pay to the Executive on
such date an estimate, as determined in good faith by the
Company, of the amount of such payments and shall pay the
remainder of such payments (together with interest at the
Federal short-term rate provided in Section 1274(d)(1)(C)(i)
of the Code) as soon as the amount thereof can be
determined. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have
been due, such excess shall constitute a loan by the Company
to the Executive, payable on the fifth day after demand by
the Company (together with interest at the Federal
short-term rate provided in Section 1274(d)(1)(C)(i) of the
Code). At the time that payments are made under Section 4
and this Appendix A, the Company shall provide the Executive
with a written statement setting forth the manner in which
such payments were calculated and the basis for such
calculations, including, without limitation, any opinions or
other advice the Company has received from outside counsel,
auditors or consultants (and any such opinions or advice
which are in writing shall be attached to the statement).
(c) The Company shall promptly pay the fees and related
expenses of any tax counsel and auditors selected by the
Executive to provide services in connection with this
Appendix A.