EXHIBIT (1)
THIRD AMENDED AND RESTATED
RIGHTS AGREEMENT
dated as of December 16, 1996
by and between
AMERON INTERNATIONAL CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
as Rights Agent
TABLE OF CONTENTS
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Page
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Section 1. Certain Definitions............................................. 1
Section 2. Appointment of Rights Agent..................................... 6
Section 3. Issuance of Right Certificates.................................. 6
Section 4. Form of Right Certificates...................................... 7
Section 5. Countersignature and Registration............................... 8
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates: Mutilated, Destroyed, Lost
or Stolen Right Certificates.................................... 8
Section 7. Exercise of Rights.............................................. 9
Section 8. Cancellation and Destruction of Right Certificates.............. 11
Section 9. Reservation and Availability of Capital Stock................... 11
Section 10. Securities Record Date......................................... 12
Section 11. Adjustment of Exercise Price, Number of Shares
Issuable Upon Exercise of Rights or Number of Rights........... 12
Section 12. Certificate of Adjusted Exercise Price or Number of
Shares Issuable Upon Exercise of Rights........................ 17
Section 13. Consolidation, Merger, or Sale or Transfer of Assets
or Earning Power............................................... 17
Section 14. Fractional Rights and Fractional Shares........................ 20
Section 15. Rights of Action............................................... 20
Section 16. Agreement of Right Holders..................................... 21
Section 17. Right Holder and Right Certificate Holder Not Deemed
a Stockholder.................................................. 21
Section 18. Concerning the Rights Agent.................................... 21
Section 19. Merger or Consolidation or Change of Name of Rights Agent...... 22
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Page
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Section 20. Duties of Rights Agent......................................... 22
Section 21. Change of Rights Agent......................................... 24
Section 22. Issuance of New Right Certificates............................. 25
Section 23. Redemption of Rights........................................... 25
Section 24. Exchange of Rights............................................. 26
Section 25. Notice of Certain Events....................................... 27
Section 26. Notices........................................................ 27
Section 27. Supplements and Amendments..................................... 28
Section 28. Certain Covenants.............................................. 28
Section 29. Successors..................................................... 29
Section 30. Benefits of this Agreement..................................... 29
Section 31. Severability................................................... 29
Section 32. Governing Law.................................................. 29
Section 33. Counterparts................................................... 29
Section 34. Descriptive Headings........................................... 29
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TABLE OF EXHIBITS
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Exhibit A -- Form of Right Certificate
iii
TABLE OF DEFINED TERMS
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Term Defined Page Section
------------ ---- ---------------
Adjustment Shares 13 11(a)(ii)
Affiliate 1 1
Agreement 1 Introduction
Associate 1 1
Beneficial Owner 1 1
Beneficially Own 1 1
Business Day 2 1
Close of Business 3 1
Closing Price 3 1
Common Share 1 1
Common Share Equivalent 3 11(a)(iii)
Company (Ameron International Company) 1 Introduction
Company (following a Section 13(a) Event) 18 13(a)(iii)
Current Market Price 3 1
Distribution Date 4 3(a)
Exchange Act 4 1
Exchange Ratio 25 24(a)
Exempt Person 4 1
Exercise Price 4 7(c)
Expiration Date 4 1
15% Ownership Date 4 1
15% Stockholder 4 1
iv
Term Defined Page Section
------------ ---- ---------------
NASDAQ 3 1
Person 5 1
Preferred Share 5 1
Preferred Share Equivalent 5 11(b)
Record Date 5 Recital
Redemption Date 5 1
Redemption Price 5 23(a)
Right 1 Recital
Right Certificate 5 1
Rights Expiration Date 5 Introduction
Rights Agent 1 Introduction
Section 11(a)(ii) Event 5 11(a)(ii)
Section 13(a) Event 5 13(a)
Securities Act 5 1
Subsidiary 5 1
Surviving Person 17 13(a)
Trading Day 5 1
Unavailable Adjustment Shares 13 11(a)(iii)
Unavailable Exchange Shares 26 24(c)
Voting Share 5 1
v
TABLE OF DEFINED TERMS
----------------------
(continued)
Term Defined Page Section
------------ ---- -------
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THIRD
AMENDED AND RESTATED
RIGHTS AGREEMENT
This Third Amended and Restated Rights Agreement ("Agreement") is made and
entered into as of the 16th day of December, 1996 by and between AMERON
INTERNATIONAL CORPORATION, a Delaware corporation (the "Company"), and FIRST
CHICAGO TRUST COMPANY OF NEW YORK, a New York corporation (the "Rights Agent").
WHEREAS, on April 15, 1987, the Company distributed one stock purchase
right (a "Right") for each Common Share (as hereinafter defined) of the Company
outstanding on April 15, 1987 (the "Record Date") upon the terms and conditions
set forth in that Rights Agreement (the "Prior Agreement"), dated as of April 3,
1987, between the Company and the Rights Agent;
WHEREAS, the Prior Agreement was amended pursuant to an Amended and
Restated Rights Agreement (the "First Amended Agreement") dated as of January
26, 1988; and
WHEREAS, the First Amended Agreement was amended pursuant to a Second
Amended and Restated Rights Agreement (the "Second Amended Agreement") dated as
of March 1, 1991;
WHEREAS, on November 20, 1996, the Board of directors approved an amendment
to the Second Amended Agreement (a) to set the Exercise Price of the Rights at
$175, and (b) to extend the Expiration Date of the Rights to the later of
December 16, 2006 or the tenth anniversary of the Distribution Date;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
agreements set forth herein, and for the benefit of the holders of Rights, the
parties hereto hereby amend and restate the Second Amended Agreement to read as
follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act, as in effect on the
date hereof.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
"Beneficially Own":
(i) any securities that such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly, for
purposes of Section 13(d) of the Exchange Act and Rule 13d-3 promulgated
under the Exchange Act, in each case as in effect on the date hereof;
(ii) any securities that such Person or any of such Person's
Affiliates or Associates has the right to acquire (whether such right is
exercisable immediately, or only
after the passage of time, compliance with regulatory requirements, the
fulfillment of a condition, or otherwise) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise, provided that a
Person shall not be deemed the Beneficial Owner of, or to Beneficially Own,
securities tendered pursuant to a tender offer or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange;
(iii) any securities that such Person or any such Person's Affiliates
or Associates has the right to vote, alone or in concert with others,
pursuant to any agreement, arrangement or understanding, provided that a
Person shall not be deemed the Beneficial Owner of, or to Beneficially own,
any security if the agreement, arrangement or understanding to vote such
security (A) arises solely from a revocable proxy given to such Person or
any of such Person's Affiliates or Associates in response to a public proxy
solicitation made pursuant to and in accordance with the applicable rules
and regulations of the Exchange Act, and (B) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report);
(iv) any securities that are Beneficially Owned, directly or
indirectly, by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (other than
voting pursuant to a revocable proxy as described in the proviso to clause
(iii) of this definition of -Beneficial Owner") or disposing of any
securities of the Company; and
(v) on any day on or after the Distribution Date, all Rights that
prior to such date were represented by certificates for Common Shares that
such Person Beneficially Owns on such day.
Notwithstanding anything to the contrary in this Section l(b), a Person engaged
in business as an underwriter of securities shall not be deemed 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 40 days after the date of such acquisition.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in the States of New York and California are
authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 o'clock p.m., Los
Angeles time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 o'clock p.m., Los Angeles time, on the next
succeeding Business Day.
"Closing Price" of a stock or other security on any day shall be the last
sale price, regular way, per share of such stock or unit of such other security
on such day 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
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securities listed or admitted to trading on the New York Stock Exchange or, if
such stock or other security is 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 such stock or other security is listed or admitted
to trading or, if such stock or other security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in use or, if
on any such date such stock or other security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker that makes a market in such stock or other security
and that is selected by the Board of Directors of the Company.
"Common Share" shall mean one share of the Common Stock, par value $2.50
per share, of the Company, unless used with reference to a Person other than the
Company, in which case it shall mean one share of each class of stock of such
Person having the right to vote generally in the election of directors or, if
such Person is a Subsidiary of another Person, one Common Share of the Person
that ultimately controls such Person.
"Common Share Equivalent" shall have the meaning Ascribed to it in Section
11(a)(iii) hereof.
"Current Market Price" per share of a stock or unit of any other security
on any date shall mean the average of the daily Closing Prices of such stock or
other security for the 30 consecutive Trading Days through and including the
Trading Day immediately preceding the date in question; provided, however, that
if any event shall have caused the Closing Price on any Trading Day during such
30-day period not to be fully comparable with the Closing Price on the date in
question (or, if no Closing Price is available on the date in question, on the
Trading Day immediately preceding the date in question), then each such
noncomparable Closing Price so used shall be appropriately adjusted by the Board
of Directors in order to make the Closing Price on each Trading Day during the
period used for the determination of the Current Market Price fully comparable
with the Closing Price on such date in question (or, if applicable, the
immediately preceding Trading Day). "Current Market Price" per share of any
stock or unit of such other security that is not publicly held or so listed or
traded, and "Current Market Price" of any other property, shall mean the fair
value per share of such stock or unit of such other security, or the fair value
of such other property, respectively, as determined in good faith by the Board
of Directors of the Company based upon such appraisals or valuation reports of
such independent experts as the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a statement filed by the
Company with the Rights Agent.
"Distribution Date" shall have the meaning ascribed to it in Section 3
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
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"Exempt Person" shall mean the Company, any wholly-owned Subsidiary of the
Company, any employee benefit plan of the Company or of a Subsidiary of the
Company, and any Person holding Voting Shares for or pursuant to the terms of
any such employee benefit plan.
"Exercise Price" shall have the meaning ascribed to it in Section 7(c)
hereof.
"Expiration Date" shall mean December 16, 2006.
"15% Ownership Date" shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act) by the Company or a
15% Stockholder containing the facts by virtue of which a Person has become a
15% Stockholder.
"15% Stockholder" shall mean any Person that, together with all Affiliates
and Associates of such Person, hereafter acquires Beneficial Ownership of, in
the aggregate, a number of Voting Shares of the Company equal to 1% or more of
the Voting Shares then outstanding and thereupon or thereafter Beneficially Owns
15% or more of the Voting Shares of the Company then outstanding; provided,
however, that the term "15% Stockholder" shall not include: (i) an Exempt
Person; (ii) any Person that would not otherwise be a 15% Stockholder but for a
reduction in the number of outstanding Voting Shares resulting from a stock
repurchase program or other similar plan of the Company or from a self tender
offer of the Company, which plan or tender offer commenced on or after the date
hereof; provided, however, that the term "15% Stockholder" shall include such
Person from and after the first date upon which (A) such Person, since the date
of the commencement of such plan or tender offer, shall have acquired Beneficial
ownership of, in the aggregate, a number of Voting Shares of the Company equal
to 1% or more of the Voting Shares of the Company then outstanding and (B) such
Person, together with all Affiliates and Associates of such Person, shall
Beneficially Own 15% or more of the Voting Shares of the Company then
outstanding; or (iii) any Person that would not otherwise be a 15% Stockholder
but for its Beneficial Ownership of Rights. In calculating the percentage of
the outstanding Voting Shares that are Beneficially Owned by a Person for
purposes of this definition, Voting Shares that are Beneficially Owned by such
Person shall be deemed outstanding, and Voting Shares that are not Beneficially
Owned by such Person and that are subject to issuance upon the exercise or
conversion of outstanding conversion rights, exchange rights, rights, warrants
or options shall not be deemed outstanding. Any determination made by the Board
of Directors of the Company as to whether any Person is or is not a 15%
Stockholder shall be conclusive and binding upon all holders of Rights.
"Person" shall mean any individual, firm, partnership, corporation,
association, group (as such term is used in Rule 13d-5 promulgated under the
Exchange Act as in effect on the date hereof) or other entity, and shall include
any successor (by merger or otherwise) of such entity.
"Preferred Share" shall mean one share of the Series A Junior Participating
Cumulative Preferred Stock, par value $1.00 per share, of the Company, which
shall have the rights and preferences set forth in the form of Amended
Certificate of Designations attached to the Second Amended Agreement.
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"Preferred Share Equivalent" shall have the meaning ascribed to it in
Section 11(b) hereof.
"Record Date" shall have the meaning ascribed to it in the recitals hereto.
"Redemption Date" shall mean the date of the action of the Board of
Directors of the Company authorizing and directing the redemption of the Rights
pursuant to Section 23(a) hereof or the exchange of the Rights pursuant to
Section 24(a) hereof.
"Redemption Price" shall have the meaning ascribed to it in Section 23(a)
hereof.
"Right Certificate" as that term is used with respect to any period prior
to the Distribution Date, shall have the meaning ascribed to it in Section 3(b)
hereof, and, as that term is used with respect to any period on or after the
Distribution Date, shall have the meaning ascribed to it in Section 3(c) hereof.
"Rights Expiration Date" shall mean the Expiration Date, except if there
has been a Distribution Date, then it shall mean the tenth anniversary of the
Distribution Date.
"Section 11(a)(ii) Event" shall have the meaning ascribed to it in Section
11(a)(ii) hereof.
"Section 13(a) Event" shall have the meaning ascribed to it in Section
13(a) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Subsidiary" of any Person shall mean any corporation or other Person of
which equity securities or equity interests representing a majority of the
voting power are owned, directly or indirectly, or which is effectively
controlled, by such Person.
"Trading Day" shall mean, as to any stock or other security, a day on which
the principal national securities exchange on which such stock or other security
is listed or admitted to trading is open for the transaction of business or, if
such stock or other security is not listed or admitted to trading on any
national securities exchange, a Business Day.
"Voting Share" shall mean (i) a Common Share of the Company and (ii) any
other share of capital stock of the Company entitled to vote generally in the
election of directors or entitled to vote together with the Common Shares in
respect of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up. References in this
Agreement to a percentage or portion of the outstanding Voting Shares shall be
deemed a reference to the percentage or portion of the total votes entitled to
be cast by the holders of the outstanding Voting Shares.
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Section 2. Appointment of Rights Agent.
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The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of Rights 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.
Section 3. Issuance of Right Certificates.
------------------------------
(a) "Distribution Date" shall mean the date, after the date hereof, that is
the earliest of (i) the tenth Business Day (or such later day as shall be
designated by the Board of Directors of the Company) following the date of the
commencement of, or the first public announcement of the intent of any Person,
other than an Exempt Person, to commence a tender offer or exchange offer, the
consummation of which would cause any Person to become a 15% Stockholder, (ii)
the date of the first Section 11(a)(ii) Event or (iii) the date of the first
Section 13(a) Event.
(b) Until the Distribution Date, (i) the Rights shall be represented by
certificates for Common Shares (all of which certificates for Common Shares
shall be deemed to be Right Certificates) and not by separate Right
Certificates, (ii) the record holder of the Common Shares represented by each of
such certificates shall be the record holder of the Rights represented thereby
and (iii) the Rights shall be transferable only in connection with the transfer
of Common Shares. Until the earliest of the Distribution Date, the Redemption
Date or the Expiration Date, the surrender for transfer of such certificates for
Common Shares shall also Constitute the surrender for transfer of the Rights
represented thereby.
(c) As soon as practicable after the Distribution Date, and after
notification by the Company, the Rights Agent shall send by first-class,
postage-prepaid mail to each record holder of Common Shares, as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate substantially in the form of Exhibit
A hereto representing one Right for each Common Share so held. From and after
the Distribution Date, the Rights shall be represented solely by such Right
Certificates and may only be transferred by the transfer of such Right
Certificates, and the holders of such Right Certificates, as listed in the
records of the Company or any transfer agent or registrar for such Rights, shall
be the record holders of such Rights.
(d) Certificates for Common Shares issued at any time after the Record Date
and prior to the earliest of the Distribution Date, the Redemption Date or the
Expiration Date, shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also represents Rights that entitle the holder hereof to
certain rights as set forth in a Third Amended and Restated Rights
Agreement dated as of December 16, 1996 by and between the Corporation and
First Chicago Trust Company of New York, as Rights Agent (the "Rights
Agreement"), as amended to date, the terms and conditions of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Corporation. Under certain
circumstances specified in the Rights Agreement, such Rights will be
represented by separate certificates and will no longer be represented by
this certificate. Under certain circumstances specified in the Rights
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Agreement, Rights beneficially owned by certain persons may become null and
void. The Corporation will mail to the record holder of this certificate a
copy of the Rights Agreement without charge promptly following receipt of a
written request therefor.
(e) Certificates for Common Shares issued at any time on or after the
Distribution Date and prior to the earlier of the Redemption Date or the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate does not represent any Right issued pursuant to the terms
of a Third Amended and Restated Rights Agreement dated as of December 16,
1996 by and between the Corporation and First Chicago Trust Company of New
York, as Rights Agent.
(f) In the event that at any time on or after the earlier of the date of
the first Section 11(a)(ii) Event or the date of the first Section 13(a) Event
and prior to the earlier of the Redemption Date or the Expiration Date, the
Company shall issue any Common Shares pursuant to the exercise of conversion
rights, exchange rights, rights (other than Rights), warrants or options that
shall have been issued or granted prior to the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a) Event, then,
unless the Board of Directors of the Company shall have provided otherwise at
the time of the issuance or grant of such conversion rights, exchange rights,
rights (other than Rights), warrants or options, the Rights Agent shall, as soon
as practicable after the date of such event, send by first-class, postage-
prepaid mail to the record holder of such Common Shares, at the address of such
holder as shown on the records of the Company, a Right Certificate substantially
in the form of Exhibit A hereto representing one Right for each Common Share so
issued.
(h) Notwithstanding the foregoing provisions of this Section 3, the Rights
Agent shall not send any Right Certificate to any 15% Stockholder or any of its
Affiliates or Associates or to any Person if the Rights held by such Person are
Beneficially owned by a 15% Stockholder or any of its Affiliates or Associates.
Any determination made by the Board of Directors of the Company as to whether
any Common Shares are or were Beneficially Owned at any time by a 15%
Stockholder or an Affiliate or Associate of a 15% Stockholder shall be
conclusive and binding upon all holders of Rights.
Section 4. Form of Right Certificates. The Right Certificates and the
--------------------------
form of assignment, including certificate, and the form of election to purchase,
including certificate, printed on the reverse thereof, when, as and if issued,
shall be substantially the same as Exhibit A 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 upon which the Rights or the securities
of the Company issuable upon exercise of the Rights may from time to time be
listed, or to conform to usage. Subject to Section 22 hereof, Right
Certificates, whenever issued, that are issued in respect of Common Shares that
were issued
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and outstanding as of the Close of Business on the Distribution Date, shall be
dated as of the Distribution Date.
Section 5. Countersignature and Registration.
---------------------------------
(a) The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President or any
Vice President, either manually or by facsimile signature, and may have affixed
thereto the Company's seal or a facsimile thereof attested by its Secretary or
any Assistant Secretary, either manually or by facsimile signature. The Right
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 Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may nevertheless
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company. Any Right
Certificate may be signed on behalf of the Company by any person who at the
actual date of such execution shall be a proper officer of the Company to sign
such Right Certificate, even though such person was not such an officer at the
date of the execution of this Agreement.
(b) Following the Distribution Date, the Rights Agent shall keep or cause
to be kept at its principal offices books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of Right Certificates, the number of Rights
represented on its face by each Right Certificate and the date of each Right
Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
---------------------------------------------------------------------
(a) Subject to the provisions of Sections 6(c), 7(d) and 14 hereof, at any
time after the Close of Business on the Distribution Date, and so long as the
Rights represented thereby remain outstanding, any one or more Right
Certificates may be transferred, split-up, combined or exchanged for one or more
Right Certificates representing the same aggregate number of Rights as the Right
Certificates surrendered. Any registered holder desiring to transfer, split up,
combine or exchange one or more Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent with the form of assignment, including certificate, on the
reverse side thereof completed and duly executed, with signature guaranteed.
Thereupon, the Rights Agent shall countersign and deliver to the person entitled
thereto one or more Right Certificates, 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 Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, at the
8
Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of such Right Certificate if mutilated, the Company shall issue
and deliver to the Rights Agent for delivery to the record holder of such Right
Certificate a new Right Certificate of like tenor in lieu of such lost, stolen,
destroyed or mutilated Right Certificate.
(c) Notwithstanding anything to the contrary in this Section 6, the Rights
Agent shall not countersign and deliver a Right Certificate to any Person if
such Right Certificate represents, or would represent when held by such Person,
Rights that had become or would become null and void pursuant to Section 7(d)
hereof.
Section 7. Exercise of Rights.
------------------
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Section 7(d) and (g) hereof and the other provisions of this
Agreement, at any time after the Close of Business on the Distribution Date and
prior to the Close of Business on the earlier of the Redemption Date or the
Rights Expiration Date, the registered holder of any Right Certificate may
exercise the Rights represented thereby in whole or in part upon surrender of
such Right Certificate, with the form of election to purchase, including
certificate, on the reverse side thereof completed and duly executed, with
signature guaranteed, to the Rights Agent at the office of the Rights Agent at
First Chicago Trust Company of New York, Mail Suite 4660, 525 Washington
Boulevard, Jersey City, New Jersey 07310-252532, together with payment of the
Exercise Price for each Right exercised. Upon the exercise of an exercisable
Right and payment of the Exercise Price in accordance with the provisions of
this Agreement, the holder of such Right shall be entitled to receive, subject
to adjustment as provided herein, one one-hundredth of a Preferred Share (or,
following the occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event,
Common Shares and/or other securities).
(c) The Exercise Price for the exercise of each Right shall initially be
$175.00 and shall be payable in lawful money of the United States of America in
accordance with Section 7(f) hereof. The Exercise Price and the number of
Preferred Shares (or, following the occurrence of a Section 11(a)(ii) Event or a
Section 13(a) Event, Common Shares and/or other securities) to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 7(e), 11 and 13 hereof and the other provisions of this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary, from and
after the earlier of the date of the first Section 11(a)(ii) Event or the date
of the first Section 13(a) Event, any Rights that are or were Beneficially Owned
by a 15% Stockholder or any Affiliate or Associate of a 15% Stockholder at any
time on or after the Distribution Date shall be null and void, and for all
purposes of this Agreement such Rights shall thereafter be deemed not to be
outstanding, and any holder of such Rights (whether or not such holder is a 15%
Stockholder or an Affiliate or Associate of a 15% Stockholder) shall thereafter
have no right to exercise such Rights.
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(e) Prior to the Distribution Date, if the Board of Directors of the
Company shall have determined that such action adequately protects the interests
of the holders of Rights, the Company may, in its discretion, substitute for all
or any portion of the Preferred Shares that would otherwise be issuable (after
the Close of Business on the Distribution Date) upon the exercise of each Right
and payment of the Exercise Price, (i) cash, (ii) other equity securities of the
Company, (iii) debt securities of the Company, (iv) other property or (v) any
combination of the foregoing, in each case having an aggregate Current Market
Price equal to the aggregate Current Market Price of the Preferred Shares for
which substitution is made. Subject to Section 7(d) hereof, in the event that
the Company takes any action pursuant to this Section 7(e), such action shall
apply uniformly to all outstanding Rights.
(f) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase, including certificate, completed and duly
executed, with signature guaranteed, accompanied by payment of the Exercise
Price for each Right to be exercised and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check or cashier's check payable
to the order of the Company, the Rights Agent shall thereupon promptly (i)
requisition from the transfer agent of the Preferred Shares (or, following the
occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares
and/or securities), certificates for the number of Preferred Shares (or such
other securities) to be purchased, and the Company hereby irrevocably authorizes
such transfer agent to comply with all such requests, and/or, as provided in
Section 14 hereof, requisition from the depositary agent described therein
depositary receipts representing such number of one-hundredths of a Preferred
Share (or such other securities) as are to be purchased (in which case
certificates for the Preferred Shares (or such other securities) represented by
such receipts shall be deposited by the transfer agent with such depositary
agent) and the Company hereby directs such depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of cash
to be paid in lieu of issuance of fractional Preferred Shares (or such other
securities) in accordance with Section 14 hereof, (iii) after receipt of such
certificates, depositary receipts or cash, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when
appropriate, after receipt thereof, deliver such cash to or upon the order of
the registered holder of such Right Certificate.
(g) Notwithstanding the foregoing provisions of this Section 7, the
exercisability of the Rights shall be suspended for such period as shall
reasonably be necessary for the Company to register and qualify under the
Securities Act and any applicable securities law of any jurisdiction the
Preferred Shares to be issued pursuant to the exercise of the Rights; provided,
however, that nothing contained in this Section 7 shall relieve the Company of
its obligations under Section 9(c) hereof.
(h) In case the registered holder of any Right Certificate shall exercise
less than all of the Rights represented thereby, a new Right Certificate
representing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate or
to such holder's duly authorized assigns, subject to the provisions of Section
14 hereof.
10
Section 8. Cancellation and Destruction of Right Certificates. All Right
--------------------------------------------------
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right Certificates
to the Company or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
---------------------------------------------
(a) Subject to Sections 7(e) and 9(f) hereof, the Company shall cause to be
reserved and kept available out of its authorized and unissued equity securities
(or out of its authorized and issued equity securities held in its treasury),
the number of such equity securities that will from time to time be sufficient
to permit the exercise in full of all outstanding Rights.
(b) In the event that any securities issuable upon exercise of the Rights
are listed on any national securities exchange, the Company shall use its best
efforts, from and after such time as the Rights become exercisable, to cause all
such securities issued or reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) If necessary to permit the issuance of securities upon exercise of the
Rights, the Company shall use its best efforts, from and after the Distribution
Date, to register and qualify such securities under the Securities Act, the
Exchange Act and any other applicable securities laws and to keep such
registration effective until the earlier of the Redemption Date or the
Expiration Date.
(d) The Company shall take all such action as may be necessary to ensure
that all securities delivered upon exercise of the Rights shall, at the time of
delivery of the certificates for such securities (subject to payment of the
Exercise Price), be duly and validly authorized and issued and fully paid and
nonassessable securities.
(e) The Company shall pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates or of any securities upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax that
may be payable in respect of any transfer or delivery of a Right Certificate to
a Person other than, or the issuance or delivery of a certificate for securities
in respect of a name other than that of, the registered holder of the Right
Certificate representing Rights surrendered for exercise, or to issue or deliver
any certificate for securities upon the exercise of any Right until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
11
(f) With respect to the Common Shares and/or other securities issuable
pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing covenants shall be
applicable only upon and following the occurrence of a Section 11(a)(ii) Event.
Section 10. Securities Record Date. Each Person in whose name any
----------------------
certificate for securities of the Company is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
securities represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate representing such Rights was duly surrendered
and payment of the Exercise Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the securities transfer books of the Company are closed, such person shall
be deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the
securities transfer books of the Company are open.
Section 11. Adjustment of Exercise Price, Number of Shares Issuable Upon
------------------------------------------------------------
Exercise of Rights or Number of Rights. The Exercise Price, the number and kind
--------------------------------------
of securities that may be purchased upon exercise of a 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 that the Company shall at any time after the
Close of Business on the Record Date and prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date (A) declare or
pay any dividend on the Preferred Shares payable in Preferred Shares or
Voting Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares
or (D) issue Preferred Shares or other securities of the Company (other
than those for which an adjustment is required under Section 11(b) hereof)
in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) or in a reorganization
of the Company, then, and upon each such event, the number and kind of
Preferred Shares or other securities issuable upon the exercise of a Right
on the date of such event shall be proportionately adjusted so that the
holder of any Right exercised on or after such date shall be entitled to
receive, upon the exercise thereof and payment of the Exercise Price, the
aggregate number and kind of Preferred Shares or other securities or other
property, as the case may be, that, if such Right had been exercised
immediately prior to such date and at a time when such Right was
exercisable and the transfer books of the Company were open, such holder
would have owned upon such exercise and would have been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs that 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) In the event that a 15% ownership Date shall have occurred and
neither the Redemption Date nor the Expiration Date shall have occurred
prior to the tenth Business Day following such 15% Ownership Date (a
"Section 11(a)(ii) Event"), then, and upon each such Section 11(a)(ii)
Event, proper provision shall be made so that, except as
12
provided in Section 7(d) hereof, each holder of a Right shall thereafter
have the right to receive, upon the exercise thereof in accordance with the
terms of this Agreement and payment of the then current Exercise Price, as
an alternative to the securities or other property otherwise purchasable
upon such exercise, such number of Common Shares of the Company as shall
equal the result obtained by (A) multiplying the then current Exercise
Price by the then number of one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to such Section 11(a)(ii) Event
(or, if the Distribution Date shall not have occurred prior to the date of
such Section 11(a)(ii) Event, the number of one-hundredths of a Preferred
Share for which a Right would have been exercisable if the Distribution
Date had occurred on the Business Day immediately preceding the date of
such Section 11(a)(ii) Event), and (B) dividing that product by 50% of the
Current Market Price of a Common Share on the date of occurrence of the
relevant Section 11(a)(ii) Event (such number of shares being hereinafter
referred to as the "Adjustment Shares"). Successive adjustments shall be
made pursuant to this paragraph each time a Section 11(a)(ii) Event occurs.
(iii) In the event that on the date of a Section 11(a)(ii) Event the
aggregate number of Common Shares that are authorized by the Company's
Certificate of Incorporation, as amended from time to time, but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is less than the aggregate number of Adjustment Shares
thereafter issuable upon the exercise in full of the Rights in accordance
with Section 11(a)(ii) hereof (the excess of such number of Adjustment
Shares over and above such number of Common Shares being hereinafter
referred to as the "Unavailable Adjustment Shares"), then, and upon each
such event, the Company shall substitute for the pro rata portion of the
Unavailable Adjustment Shares that would otherwise be issuable thereafter
upon the exercise of each Right and payment of the Exercise Price (A) cash,
(B) other equity securities of the Company (including, without limitation,
shares of preferred stock of the Company or units of such shares having the
same Current Market Price as one Common Share (a "Common Share
Equivalent")), (C) debt securities of the Company, (D) other property or
(E) any combination of the foregoing, in each case having an aggregate
Current Market Price equal to the aggregate Current Market Price of the
Unavailable Adjustment Shares for which substitution is made. Subject to
Section 7(d) hereof, in the event that the Company takes any action
pursuant to this Section 11(a)(iii), such action shall apply uniformly to
all outstanding Rights.
(b) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earlier of
the Redemption Date or the Expiration Date, fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling them
initially to subscribe for or purchase Preferred Shares (or shares having the
same rights, privileges and preferences as the Preferred Shares ("Preferred
Share Equivalents")) or securities convertible into Preferred Shares or
Preferred Share Equivalents, at a price per Preferred Share or Preferred Share
Equivalent (or having a conversion price per share, if a security convertible
into Preferred Shares or Preferred Share Equivalents) less than the Current
Market Price per Preferred Share on such record date, then, and upon each such
event, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of
13
which shall be equal to the sum of the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares that the aggregate offering
price of the total number of Preferred Shares and/or Preferred Share Equivalents
to be so offered (and/or the aggregate initial conversion price of the
convertible securities to be so offered) would purchase at such Current Market
Price, and the denominator of which shall be equal to the number of Preferred
Shares outstanding on such record date plus the number of additional Preferred
Shares and/or Preferred Share Equivalents to be offered for subscription or
purchase (or into which the convertible securities to be so offered are
initially convertible); provided, however, that if such rights, options or
warrants are not exercisable immediately upon issuance but become exercisable
only upon the occurrence of a specified event or the passage of a specified
period of time, then the adjustment to the Exercise Price shall be made and
become effective only upon the occurrence of such event or such passage of time,
and such adjustment shall be made as if the record date for the issuance of such
rights, options or warrants had been the business day immediately preceding the
date upon which such rights, options or warrants became exercisable. Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment to the
Exercise Price 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 Exercise
Price shall be adjusted to be the Exercise Price that would then be in effect if
such record date had not been fixed.
(c) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earlier of
the Redemption Date or the Expiration Date, fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the surviving corporation) of assets (other than a distribution for
which an adjustment is required under Section 11(a)(i) or (b) hereof or a
regular quarterly cash dividend), then the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be equal to the excess of the Current Market Price per Preferred Share on
such record date over and above the fair market value of the portion of the
securities or assets to be so distributed with respect to one Preferred Share,
and the denominator of which shall be equal to such Current Market Price per
Preferred Share. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such a distribution is not so made,
the Exercise Price shall be adjusted to be the Exercise Price that would then be
in effect if such record date had not been fixed.
(d) For the purpose of any computation under this Section 11, if the
Preferred Shares are not publicly held or traded, the "Current Market Price" per
Preferred Share shall be conclusively deemed to be the Current Market Price per
Common Share multiplied by 100.
(e) No adjustment in the Exercise Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the then
current Exercise Price; provided, however, that any adjustments that by reason
of this Section 11(e) are not required to be made shall be cumulated 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 one-thousandth of a
Common Share or other share or one-millionth of a Preferred Share, as the case
may be.
14
(f) If, as a result of an adjustment made pursuant to Section 11(a) hereof,
the holder of any Right shall, upon exercise thereof, be entitled to receive any
securities of the Company other than Preferred Shares, and if an event occurs in
respect of such securities that, if it were to occur in respect of Preferred
Shares, would require an adjustment under this Section 11 in respect of
Preferred Shares, then the number of such other securities so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to Preferred Shares contained in this Section 11, and the other
provisions of this Agreement with respect to Preferred Shares shall apply on
like terms to any such other securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall represent the right to
purchase, at the adjusted Exercise Price, the number of one-hundredths of a
Preferred Share 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) below, upon each adjustment of the Exercise Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter represent
the right to purchase, at the adjusted Exercise Price, that number of one-
hundredths of a Preferred Share (calculated to the nearest one-millionth of a
Preferred Share) obtained by multiplying (i) the number of one-hundredths of a
Preferred Share purchasable upon the exercise of one Right immediately prior to
such adjustment of the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product so obtained by
the Exercise Price in effect immediately after such adjustment.
(i) The Company may elect, on or after the date of any adjustment of the
Exercise Price, to adjust the number of Rights instead of making any adjustment
in the number of Preferred Shares purchasable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one-hundredths of a Preferred Share 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 one-thousandth of a Right)
obtained by dividing the Exercise Price in effect immediately prior to the
adjustment of the Exercise Price by the Exercise Price in effect immediately
after such adjustment of the Exercise Price. The Company shall make a public
announcement of its election to adjust the number of Rights pursuant to this
Section 11(i), indicating the record date for the adjustment and, if known at
the time, the amount of the adjustment to be made. Such record date may be the
date on which the Exercise Price is adjusted or any day thereafter, but, if
separate Right Certificates have been issued, it shall be at least 10 days after
the date of such public announcement. If separate Right 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 Right Certificates on such record date Right Certificates
representing, 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, cause to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such holders prior to the
date of such adjustment, and upon surrender thereof if required by the Company,
new Right Certificates representing all the Rights
15
to which such holders shall be entitled after such adjustment. Right
Certificates to be so distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the Company, the
adjusted Exercise Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Exercise Price or the
number of one-hundredths of a Preferred Share issuable upon the exercise of one
Right, the Right Certificates theretofore and thereafter issued may continue to
express the Exercise Price per one one-hundredth of a Preferred Share and the
number of Preferred Shares issuable upon the exercise of one Right that were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Exercise Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the advice or opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of a Preferred Share at such adjusted Exercise
Price.
(1) In any case in which this Section 11 shall require that an adjustment
in the Exercise 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 of the
number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of one-hundredths of a Preferred Share and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due ββββ or other appropriate
instrument representing such holder's right to receive such additional shares
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 further adjustments in the number of one-
hundredths of a Preferred Share that may be purchased upon exercise of one
Right, and such further adjustments in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of any Preferred Shares at less than the Current Market Price thereof,
(iii) issuance wholly for cash of Preferred Shares or securities that by their
terms are convertible into or exchangeable for Preferred Shares, (iv) dividends
on Preferred Shares payable in Preferred Shares or (v) issuance of rights,
options or warrants referred to Section 11(b) hereof, hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that the Company shall, at any time after the Close of
Business on the Record Date and prior to the Close of Business on the earliest
of the date of the first Section 11(a)(ii) Event, the date of the first Section
13(a) Event, the Redemption Date or the Expiration Date, (i) pay any dividend on
the Common Shares payable in Common Shares, (ii) subdivide the outstanding
Common Shares, (iii) combine the outstanding Common Shares into a smaller number
16
of Common Shares or (iv) issue Common Shares in a reclassification of the Common
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
then, and upon each such event, the Exercise Price to be in effect after such
event shall be determined by multiplying the Exercise Price in effect
immediately prior to such event by a fraction, the numerator of which shall be
equal to the number of Common Shares outstanding immediately prior to such event
and the denominator of which shall be equal to the number of Common Shares
outstanding immediately after such event. Successive adjustments shall be made
pursuant to this Section 11(n) each time such a dividend is paid or such a
subdivision, combination or reclassification is effected. If an event occurs
that would require an adjustment under both this Section 11(n) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(n) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
Section 12. Certificate of Adjusted Exercise Price or Number of Shares
----------------------------------------------------------
Issuable Upon Exercise of Rights. Whenever an adjustment is made as provided
---------------------------------
in Section 11 hereof, the Company shall promptly (a) prepare a certificate
setting forth such adjustment and a brief statement of the facts giving rise to
such adjustment, (b) file with the Rights Agent and with each transfer agent for
the securities issuable upon exercise of the Rights a copy of such certificate
and (c) mail a brief summary thereof to each holder of Rights in accordance with
Section 25 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to make such certification or to give such notice shall not affect the
validity or the force and effect of such adjustment. Any adjustment to be made
pursuant to Sections 11 or 13 hereof shall be effective as of the date of the
event giving rise to such adjustment.
Section 13. Consolidation, Merger, or Sale or Transfer of Assets or
-------------------------------------------------------
Earning Power.
--------------
(a) In the event (a "Section 13(a) Event") that, at any time on or after
the 15% Ownership Date and prior to the earlier of the Redemption Date or the
Expiration Date, (1) the Company shall, directly or indirectly, consolidate with
or merge with and into any other Person and the Company shall not be the
continuing or surviving corporation in such consolidation or merger, (2) any
Person shall, directly or indirectly, consolidate with or merge with and into
the Company and the Company shall be the continuing or surviving corporation in
such merger and, in connection with such merger, all or part of the Common
Shares shall be changed into or exchanged for stock or other securities of any
Person or cash or any other property, or (3) the Company and/or any one or more
of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer,
in one or more transactions (other than transactions in the ordinary course of
business), 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 one or more of its wholly-owned
Subsidiaries (such Persons, together with the Persons described in clauses (1)
and (2) above shall be collectively referred to in this Section 13 as the
"Surviving Person"), then, and in each such case, proper provision shall be made
so that:
(i) except as provided in Section 7(d) hereof, each holder of a Right
shall thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement and payment of the then current
Exercise Price, in lieu of the securities or other property otherwise
purchasable upon such exercise, such number of validly
17
authorized and issued, fully paid and nonassessable Common Shares of the
Surviving Person (and if such Surviving Person has more than one class or
series of Common Shares, such number of validly authorized and issued,
fully paid and nonassessable Common Shares of each series or class) as
shall be equal to a fraction, the numerator of which is the product of the
then current Exercise Price multiplied by the number of one-hundredths of a
Preferred Share purchasable upon the exercise of one Right immediately
prior to the first Section 13(a) Event (or, if the Distribution Date shall
not have occurred prior to the date of such Section 13(a) Event, the number
of one-hundredths of a Preferred Share that would have been so purchasable
if the Distribution Date had occurred on the Business Day immediately
preceding the date of such Section 13(a) Event, or, if a Section 11(a)(ii)
Event has occurred prior to such Section 13(a) Event, the product of the
number of one-hundredths of a Preferred Share purchasable upon the exercise
of a Right (or, if the Distribution Date shall not have occurred prior to
the date of such Section 11(a)(ii) Event, the number of one-hundredths of a
Preferred Share that would have been so purchasable if the Distribution
Date had occurred on the Business Day immediately preceding the date of
such Section 11(a)(ii) Event) immediately prior to such Section 11(a)(ii)
Event, multiplied by the Exercise Price in effect immediately prior to such
Section 11(a)(ii) Event), and the denominator of which is 50% of the
Current Market Price per Common Share of the Surviving Person on the date
of consummation of such Section 13(a) Event;
(ii) the Surviving Person shall thereafter be liable for and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term, "Company," shall thereafter be deemed to refer to the
Surviving Person; and
(iv) the Surviving Person shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such consummation as
may be necessary to ensure that the provisions hereof shall thereafter be
applicable to its Common Shares thereafter deliverable upon the exercise of
Rights.
(b) Notwithstanding the foregoing, if the Section 13(a) Event is the sale
or transfer in one or more transactions of assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole), but less than 100% thereof, then each Person acquiring all
or a portion thereof shall assume the obligations of the Company as to a
fraction of each of the Rights equal to the fraction of the assets of the
Company and its Subsidiaries (taken as a whole) acquired by such Person, and the
obligations of the Company as to the remaining fraction of each of the Rights
shall continue to be the obligations of the Company.
(c) The Company shall not consummate a Section 13(a) Event unless prior
thereto the Company and the Surviving Person shall have executed and delivered
to the Rights Agent a supplemental agreement confirming that such Surviving
Person shall, upon consummation of such
18
Section 13(a) Event, assume this Agreement in accordance with Section 13 hereof,
that all rights of first refusal or preemptive rights in respect of the issuance
of Common Shares of such Surviving Person upon exercise of outstanding Rights
have been waived and that such Section 13(a) Event shall not result in a default
by such Surviving Person under this Agreement, and further providing that, as
soon as practicable after the date of consummation of such Section 13(a) Event,
such Surviving Person shall:
(i) prepare and file a registration statement under the Securities
Act with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as practicable after
such filing, use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the Expiration Date, and similarly comply with
all applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the
Rights and the Common Shares of the Surviving Person purchasable upon
exercise of the Rights on a national securities exchange, or use its best
efforts to cause the Rights and such Common Shares to meet the eligibility
requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial statements
for such Surviving Person that comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act.
(d) In the event that at any time after the occurrence of a Section
11(a)(ii) Event some or all of the Rights shall not have been exercised pursuant
to Section 11 hereof prior to the date of a Section 13(a) Event, such Rights
shall thereafter be exercisable only in the manner described in Section 13(a)
hereof. In the event that a Section 11(a)(ii) Event occurs on or after the date
of a Section 13(a) Event, Rights shall not be exercisable pursuant to Section 11
hereof but shall instead be exercisable pursuant to, and only pursuant to, this
Section 13.
(e) The provisions of this Section 13 shall apply to each successive
merger, consolidation, sale or other transfer constituting a Section 13(a)
Event.
Section 14. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates that represent fractional Rights. If the Company
shall determine not to issue such fractional Rights, the Company shall pay to
the registered holders of the Right Certificates with respect to which such
fractional Rights would otherwise be issuable, at the time such fractional
Rights would otherwise have been issued as provided herein, an amount in cash
equal to the same fraction of the Current Market Price of a whole Right on the
Business Day immediately prior to the date upon which such fractional Rights
would otherwise have been issuable.
(b) The Company shall not be required to issue fractions of Common Shares
or Preferred Shares (other than fractions that are integral multiples of one
one-hundredth of a
19
Preferred Share) upon exercise of Rights, or to distribute certificates that
represent fractional Common Shares or Preferred Shares (other than fractions
that are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be represented by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of Preferred
Shares. If the Company shall determine not to issue fractional Common Shares or
Preferred Shares (or depositary receipts in lieu of Preferred Shares), the
Company shall pay to the registered holders of Right Certificates with respect
to which such fractional Common Shares or Preferred Shares would otherwise be
issuable, at the time such Rights are exercised as provided herein, an amount in
cash equal to the same fraction of the Current Market Price of a whole Common
Share or Preferred Share, as the case may be. For purposes of this Section
14(b), the Current Market Price of a whole Common Share or Preferred Share shall
be the Closing Price per share for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right, by the acceptance of such Right, expressly
waives such holder's right to receive any fractional Rights or any fractional
Common Shares or Preferred Shares upon exercise of such Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
-----------------
Agreement, except the rights of action given to the Rights Agent under Section
18 hereof, are vested in the respective registered holders of the Right
Certificates and certificates for Common Shares representing Rights, and any
registered holder of any Right Certificate or of such certificate for Common
Shares, without the consent of the Rights Agent or of the holder of any other
Right Certificate or any other certificate for Common Shares may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights represented by such Right Certificate or by such certificate for Common
Shares in the manner provided in such 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, and injunctive relief against actual or threatened violations, of
the obligations of any Person under this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
---------------------------
accepting the same, consents and agrees with the Company and the Rights Agent
and every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be represented by
certificates for Common Shares registered in the name of the holders of such
Common Shares (which certificates for Common Shares shall also constitute Right
Certificates), and each such Right shall be transferable only in connection with
the transfer of such Common Shares;
20
(b) after the Distribution Date, the Right Certificates shall only be
transferable on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in whose
name the Right Certificate is registered as the absolute owner thereof and of
the Rights represented thereby (notwithstanding any notations of ownership or
writing on the Right Certificate by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Holder and Right Certificate Holder Not Deemed a
------------------------------------------------------
Stockholder. No holder, as such, of any Right or Right Certificate shall be
-----------
entitled to vote, receive dividends or be deemed for any purpose the holder of
the securities of the Company that may at any time be issuable upon the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right or Right
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, to give or withhold consent to any
corporate action, to 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, in each case until such Right or the
Rights represented by such Right 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 as compensation for all
services rendered by it hereunder reasonable and customary fees and expenses.
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 Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its 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
21
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 that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. If, at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in such Right
Certificate and in this Agreement.
(b) If at any time the name of the Rights Agent shall be changed, and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in such Right 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 Right Certificates,
by their acceptance of the Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or 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 advice
or 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 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 any one of the Chairman of the Board, the
Vice Chairman of the Board, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person 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 Right
Certificates (except its
22
countersignature thereof), or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including any Rights becoming null and void pursuant to Section 7(d)
hereof) or any adjustment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Sections 7, 11, 13 and 23 hereof, or
the ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights represented by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares or other securities to be issued pursuant to this Agreement or any
Right Certificate, or as to whether any Preferred Shares or Common Shares or
other securities will, when 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 any
one of the Chairman of the Board, the Vice Chairman, the President, any Vice
President, the Secretary, any Assistant Secretary or the 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 the 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 that reasonable care was exercised in the
selection and continued employment thereof.
23
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 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares and Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting as such, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit such holder's Right Certificate for
inspection by the Company), then the Company shall become the Rights Agent and
the registered holder of any Right 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 States of New York or California (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 States of New York or California), in good standing, having a
principal office in New York or California, that 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 that 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 of this
Agreement and so that the successor Rights Agent may appropriately act as Rights
Agent hereunder. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right 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 Right Certificates. Notwithstanding any of the
----------------------------------
provisions of this Agreement or of the Right Certificates to the contrary, the
Company may, at its option, issue new Right Certificates in such form as may be
approved by the Board of Directors in order to reflect any adjustment or change
in the Exercise Price and the number or kind or class of shares or other
securities or property purchasable upon exercise of the Rights in accordance
with the provisions of this Agreement.
Section 23. Redemption of Rights.
--------------------
(a) Until the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of
24
the first Section 13(a) Event or (iii) the Expiration Date, the Board of
Directors of the Company may, at its option, authorize and direct the redemption
of all, but not less than all, of the then outstanding Rights at a redemption
price of $.10 per Right, as such redemption price shall be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the "Redemption Price"), and the Company shall
so redeem the Rights.
(b) Immediately upon the action of the Board of Directors of the Company
authorizing and directing the redemption of the Rights pursuant to subsection
(a) of this Section 23, or at such time and date thereafter as it may specify,
and without any further action and without any notice, the right to exercise
Rights shall terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Within 10 Business Days after the
date of such action, the Company shall give notice of such redemption to the
holders of Rights by mailing such notice to all holders of Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, if
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares. Any notice that is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives such notice, but
neither the failure to give any such notice nor any defect therein shall affect
the legality or validity of such redemption. Each such notice of redemption
shall 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, directly
or indirectly, redeem, acquire or purchase for value any Rights in any manner
other than that specifically set forth in Section 24 hereof or in this Section
23, or in connection with the purchase of Common Shares prior to the earlier of
the date of the first Section 11(a)(ii) Event or the date of the first Section
13(a) Event.
(c) The Company may, at its option, pay the Redemption Price in cash,
Common Shares, Preferred Shares, other equity securities of the Company, debt
securities of the Company, other property or any combination of the foregoing,
in each case having an aggregate Current Market Price on the Redemption Date
equal to the Redemption Price.
Section 24. Exchange of Rights.
------------------
(a) At any time from and after a Section 11(a)(ii) Event, the Board of
Directors of the Company may, at its option, authorize and direct the exchange
of all, but not less than all, of the then outstanding Rights for Common Shares
at an exchange ratio of one Right for such number of Common Shares of the
Company as shall equal the result obtained by (i) multiplying the Current Market
Price per Common Share on the record date for such exchange by the number of
Common Shares for which a Right is exercisable on such record date, (ii)
subtracting from such product the Exercise Price on such Record Date, and (iii)
dividing such difference by the Current Market Price per Common Share on such
record date (the "Exchange Ratio"), and the Company shall so exchange the
Rights.
(b) Immediately upon the action of the Board of Directors of the Company
authorizing and directing the exchange of the Rights pursuant to subsection (a)
of this Section 24, or at such time and date thereafter as it may specify, and
without any further action and without any notice, the right to exercise Rights
shall terminate and the only right thereafter of the holders of Rights shall be
to receive a number of Common Shares in accordance with the Exchange Ratio.
Within
25
10 Business Days after the date of such action, the Company shall give notice of
such exchange to the holders of Rights by mailing such notice to all holders of
Rights at their last addresses as they appear upon the registry books of the
Rights Agent or, if prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives such
notice, but neither the failure to give any such notice nor any defect therein
shall affect the legality or validity of such exchange. Each such notice of
exchange shall state the method by which the Rights will be exchanged for Common
Shares.
(c) Notwithstanding the foregoing, in the event that the aggregate number
of Common Shares that are authorized by the Company's Certificate of
Incorporation, as amended from time to time, but not outstanding or reserved for
issuance for purposes other than upon exercise or exchange of the Rights is less
than the aggregate number of Common Shares issuable upon the exchange of the
Rights in accordance with this Section 24 (the excess of such number of
authorized Common Shares over and above such number of issuable Common Shares
being hereinafter referred to as the "Unavailable Exchange Shares"), then the
Company shall substitute for the pro rata portion of the Unavailable Exchange
Shares that would otherwise be issuable upon the exchange of the Rights in
accordance with this Section 24, (i) cash, (ii) other equity securities of the
Company (including, without limitation, Common Share Equivalents), (iii) debt
securities of the Company, (iv) other property or (v) any combination of the
foregoing, in each case having an aggregate Current Market Price equal to the
aggregate Current Market Price of the Unavailable Exchange Shares for which
substitution is made. Subject to Section 7(d) hereof, in the event that the
Company takes any action pursuant to this Section 24, such action shall apply
uniformly to all outstanding Rights.
Section 25. Notice of Certain Events.
------------------------
(a) In the event that the Company shall propose (i) to declare or pay any
dividend on or make any distribution with respect to its Common Shares or
Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer
to the holders of its Common Shares or Preferred Shares options, rights or
warrants to subscribe for or to purchase any additional shares thereof or shares
of stock of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Common Shares or Preferred Shares (other than
a reclassification involving only the subdivision of outstanding shares), (iv)
to effect any consolidation or merger with or into, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then and in each such case, the Company shall give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action that shall specify the record date for the
purpose of such dividend or distribution, or the date upon 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 record of the Common Shares or Preferred Shares, 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 20 days prior to the record date
for determining holders of the Common Shares or Preferred Shares for purposes of
such action, and in the case of any such other action, at least 20
26
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares or Preferred Shares,
whichever date shall be the earlier. The failure to give the notice required by
this Section 25 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action.
(b) Upon the occurrence of each Section 11(a)(ii) Event and each Section
13(a) Event, the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, specifying the event and the consequences of the
event to holders of Rights under Sections 11 and 13 hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Right 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:
Ameron International Corporation
ββββ ββββββ βββββββββ
ββββββββ ββββ, ββββββββββ βββββ
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right 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) to the principal office of the Rights
Agent as follows:
First Chicago Trust Company of New York
Mail Suite 4660
βββ ββββββββββ βββββββββ
ββββββ ββββ, βββ ββββββ βββββ-ββββ
Attention: Tenders Exchange 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 Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments.
--------------------------
(a) The Board of Directors of the Company may, from time to time, without
the approval of any holders of Rights, supplement or amend any provision of this
Agreement in any manner, whether or not such supplement or amendment is adverse
to any holder of Rights, and direct the Rights Agent so to supplement or amend
such provision, and the Rights Agent shall so supplement or amend such
provision; provided, however, that from and after the earliest of (i) the date
of the first Section 11(a)(ii) Event, (ii) the date of the first Section 13(a)
Event, (iii) the
27
Redemption Date or (iv) the Expiration Date, this Agreement shall not be
supplemented or amended in any manner that would materially and adversely affect
any holder of outstanding Rights other than a 15% Stockholder or a Surviving
Person.
(b) From and after the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event and prior to the Rights
Expiration Date, the Company shall not effect any amendment to the Restated
Certificate of Designations for the Preferred Shares that would materially and
adversely affect the rights, privileges or preferences of the Preferred Shares
without the prior approval of the holders of two-thirds or more of the then
outstanding Rights.
Section 28. Certain Covenants. Subject to Section 27 hereof and the other
-----------------
provisions of this Agreement, from and after the earlier of the date of the
first Section 11(a)(ii) Event or the date of the first Section 13(a) Event and
prior to the earlier of the Redemption Date or the Expiration Date, the Company
shall not (a) issue or sell, or permit any Subsidiary to issue or sell, to a 15%
Stockholder or a Surviving Person, or any Affiliate or Associate of a 15%
Stockholder or a Surviving Person, or any Person holding Voting Shares of the
Company that are Beneficially owned by a 15% Stockholder or a Surviving Person,
(i) any rights, options, warrants or convertible securities on terms similar to,
or that materially adversely affect the value of, the Rights or (ii) Preferred
Shares, Common Shares or shares of any other class of capital stock, if such
sale is intended to or would materially adversely affect the value of the
Rights, or (b) take any other action that is intended to or would materially
adversely affect the value of the Rights.
Section 29. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent, the
registered holders of the Right Certificates (other than those representing
Rights that have become null and void) and the certificates for Common Shares
representing Rights (other than those Rights that have become null and void) any
legal or equitable right, remedy or claim under this Agreement, and this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent, such registered holders of Right Certificates and such certificates for
Common Shares representing Rights.
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.
28
Section 32. Governing Law. This Agreement and each Right 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
performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each such counterpart 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Attest: AMERON INTERNATIONAL CORPORATION
By By
------------------------- ---------------------------
ββββββ βββββ,
Senior Vice President,
Secretary and
General Counsel
Attest: FIRST CHICAGO TRUST COMPANY OF NEW YORK
By By
------------------------- ---------------------------
Name: Name:
Title: Title:
Exhibit A
29
EXHIBIT A
---------
Form of Right Certificate
Certificate No. R __________ Rights
NOT EXERCISABLE AFTER THE LATER OF DECEMBER 16, 2006 OR THE TENTH
ANNIVERSARY OF THE DISTRIBUTION DATE (AS THAT TERM IS DEFINED IN THE RIGHTS
AGREEMENT) OR EARLIER IF REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.10 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS
THAT TERM IS DEFINED IN SECTION 1(a) OF THE RIGHTS AGREEMENT AND AS THOSE
CIRCUMSTANCES ARE SPECIFIED IN SECTION 7(f) OF THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON.
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(f) OF THE RIGHTS AGREEMENT.]*
Right Certificate
AMERON INTERNATIONAL CORPORATION
This certificate that _______________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the third Amended and Restated Rights Agreement dated as of December 16, 1997
(the "Rights Agreement") between Ameron International Corporation, a Delaware
corporation (the "Company"), and First Chicago Trust Company of New York, a New
York banking corporation (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (New York time) on the later of December 16,
2007 or the tenth anniversary of the
--------------------
* That portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Distribution Date at the office or agency of the Rights Agent at First Chicago
Trust Company of New York, Mail Suite 4660, βββ ββββββββββ βββββββββ, ββββββ
ββββ, βββ ββββββ βββββ-ββββ, or at the office of its successors as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series A Junior
Participating Cumulative Preferred Stock, $1.00 par value (the "Preferred
Shares"), of the Company, at a purchase price of $___ per one one-hundredth of a
Preferred Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of
Preferred 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 Shares as constituted
at such date.
As provided in the Rights Agreement, the Purchase Price and the number of
Preferred Shares which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events. This Right Certificate is subject to all
of the terms, provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference and made a
part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of Ameron International Corporation and the above-
mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent at First Chicago Trust
Company of New York, Mail Suite 4660, βββ ββββββββββ βββββββββ, ββββββ ββββ, βββ
ββββββ βββββ-ββββ, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may, but are not required to, be redeemed by the Company at a
redemption price of $.10 per Right.
No fractional Preferred Shares 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 Preferred Share, 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 Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of meetings or
other actions affecting shareholders
2
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Rights Agreement.
This Right 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: AMERON INTERNATIONAL CORPORATION
------------------------ -----------------------------
Secretary President
Countersigned:
------------------------
By:
-----------------------
Title:
-----------------
3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED _______________________________________ hereby sells,
assigns and transfers unto ___________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Dated: ____________________, 19__
_____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
-------------------------------------------------------------------------------
(To be completed if applicable)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
________________________________
Signature
-------------------------------------------------------------------------------
4
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificates.)
TO AMERON INTERNATIONAL CORPORATION
The undersigned hereby irrevocably elects to exercise ___________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
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 Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________________________
(Please print name and address
Dated: ___________________, 19__
________________________________
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Right
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
5
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
6
Form of Reverse Side of Right Certificate -- continued
-------------------------------------------------------------------------------
(To be completed if applicable)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
________________________________
Signature
-------------------------------------------------------------------------------
NOTICE
------
The signatures in the foregoing Forms of Assignment and Election must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Forms of Assignment
and Election is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Right
Certificates issued in exchange for this Right Certificate.
7
