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RIGHTS AGREEMENT
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XXXXX GROUP, INC.
and
BOATMEN'S TRUST COMPANY
Rights Agent
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Dated as of March 7, 1996
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INDEX
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Page
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . .
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . . .
Section 3. Issue of Right Certificates. . . . . . . . . . . . . . . . . . .
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . .
Section 5. Countersignature and Registration. . . . . . . . . . . . . . . .
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. .
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. .
Section 8. Cancellation and Destruction of Right Certificates . . . . . . .
Section 9. Reservation and Availability of Shares of Common Stock . . . . .
Section 10. Common Stock Record Date. . . . . . . . . . . . . . . . . . . .
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. . .
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . . . .
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . .
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . .
Section 17. Right Certificate Holder Not Deemed a Stockholder . . . . . . .
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . .
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . .
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . .
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . .
Section 22. Issuance of New Right Certificates. . . . . . . . . . . . . . .
Section 23. Redemption and Termination. . . . . . . . . . . . . . . . . . .
Section 24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 25. Notice of Proposed Actions. . . . . . . . . . . . . . . . . . .
Section 26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 27. Supplements and Amendments. . . . . . . . . . . . . . . . . . .
Section 28. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 29. Benefits of This Agreement. . . . . . . . . . . . . . . . . . .
Section 30. Severability. . . . . . . . . . . . . . . . . . . . . . . . . .
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .
Section 32. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . .
Section 33. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . .
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Common Stock Purchase Rights
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RIGHTS AGREEMENT
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This Agreement, dated as of March 7, 1996 is entered into between
Xxxxx Group, Inc., a New York corporation (the "Company") and Boatmen's Trust
Company (the "Rights Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, on March 7, 1996 the Board of Directors of the Company
authorized and declared a dividend distribution of one right (hereinafter
referred to as a "Right") for each share of Common Stock, par value $3.75 per
share, of the Company outstanding at the close of business on March 18, 1996
(the "Record Date"), (other than shares of such Common Stock held in the
Company's treasury on such date) and has authorized the issuance of one Right
in respect of each share of Common Stock of the Company issued between the
Record Date (whether originally issued or issued from the Company's treasury)
and the Distribution Date (as such term is defined in Section 3 hereof), each
Right representing the right to purchase Common Stock of the Company upon the
terms and subject to the conditions hereinafter set forth (the "Rights"); and
WHEREAS, the Company desires to appoint the Rights Agent to act as
provided herein, and the Rights Agent is willing to so act;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter defined)
who or which, together with all Affiliates (as hereinafter defined) and
Associates (as hereinafter defined) of such Person, without the Prior Written
Approval of the Company (as hereinafter defined), shall be the Beneficial Owner
(as hereinafter defined) of securities of the Company constituting 20% or
more of the Voting Power (as hereinafter defined) of the Company or was such a
Beneficial Owner at any time after the date hereof, whether or not such Person
continues to be the Beneficial Owner of securities representing 20% or more of
the Voting Power of the Company, but shall not include (i) the Company, any
Subsidiary of the Company, any employee benefit plan or compensation
arrangement of the Company or any Subsidiary of the Company, or any entity
holding securities of the Company to the extent organized, appointed or
established by the Company or any Subsidiary of the Company for or pursuant to
the terms of any such employee benefit plan or compensation arrangement or (ii)
any Person who or which, together with all Affiliates and Associates of such
Person, inadvertently may become the Beneficial Owner of securities of the
Company representing 20% or more of the Voting Power of the Company or
otherwise becomes such a Beneficial Owner without a plan or intention to
acquire control of the Company, so long as such Person, individually or
together with the Affiliates and Associates of such Person, promptly enters
into an irrevocable commitment promptly to divest, and thereafter promptly
divests (without exercising or retaining any power, including voting, with
respect to such securities), sufficient securities of the Company so that such
Person, together with all Affiliates and Associates of such Person, ceases to
be the Beneficial Owner of 20% or more of the Voting Power of the Company.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person" as
the result of an acquisition of voting securities of the Company by the Company
which, by reducing the amount of such securities outstanding, increases the
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proportionate voting power of such securities beneficially owned by such Person
to 20% or more of the Voting Power; provided, however, that if a Person becomes
the Beneficial Owner of securities constituting 20% or more of the Voting Power
by reason of purchases by the Company and shall, after such purchases by the
Company, become the Beneficial Owner of any additional voting securities of the
Company without the Prior Written Approval of the Company, then such Person
shall be deemed to be an Acquiring Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date hereof;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options, or otherwise,
provided, however, that a Person shall not be deemed the "Beneficial Owner" of
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for payment or exchange; or (B) the right to
vote pursuant to any agreement, arrangement or understanding, provided,
however, that a Person shall not be deemed the "Beneficial Owner" of any
security under this clause (B) if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy or consent given
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under the Exchange Act
and (2) is not also then reportable by such person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy or consent as
described in clause (B) of subparagraph (ii) of this paragraph (c)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding", when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
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(d) "Board of Directors" shall mean the Board of Directors of the
Company as constituted from time to time.
(e) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of Missouri are authorized
or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M., St.
Louis, Missouri time, on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., St. Louis, Missouri time, on the next
succeeding Business Day.
(g) "Common Stock" shall mean the Common Stock, par value $3.75 per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock with the
greatest Voting Power of such Person or the equity securities or other equity
interest having power to control or direct the management of such Person or, if
such Person is a Subsidiary (as hereinafter defined) of another Person, of the
Person which ultimately controls such first-mentioned Person and which has
issued and outstanding such capital stock, equity securities or equity
interests.
(h) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(i) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(k) "Person" shall mean any individual, firm, corporation, partnership
or other entity, and shall include any successor (by merger or otherwise) of
any such entity.
(l) "Prior Written Approval of the Company" shall mean prior express
written consent of the Company to the actions in question, executed on behalf
of the Company by a duly authorized officer of the Company following express
approval by action of at least a majority of the members of the Board of
Directors then in office.
(m) "Purchase Price" shall have the meaning set forth in Section 4
hereof.
(n) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(o) "Section 11(b) Event" shall have the meaning set forth in Section
11(b) hereof.
(p) "Section 13 Event" shall mean an event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(q) "Stock Acquisition Date" shall mean the earlier of (i) the first
date of public announcement by the Company or an Acquiring Person that an
Acquiring Person has become an Acquiring Person, or (ii) the date on which the
Company first has notice, direct or indirect, or otherwise determines that a
Person has become an Acquiring Person.
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(r) "Subsidiary" shall mean, with respect to any Person, any other
Person of which securities or other ownership interests having ordinary Voting
Power, in the absence of contingencies, to elect a majority of the board of
directors (or other persons performing similar functions) of such other Person
are at the time directly or indirectly owned by such Person or one or more of
such Person's Subsidiaries, except that "Subsidiary" when used with reference
to the Company shall mean any Person of which either a majority of the Voting
Power of the voting equity securities or a majority of the equity interests is
owned, directly or indirectly, by the Company.
(s) "Voting Power" shall mean the voting power of all securities of a
Person then outstanding generally entitled to vote for the election of
directors of the Person (or, where appropriate, for the election of persons
performing similar functions).
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agents and any Co-Rights
Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the tenth
Business Day after the Stock Acquisition Date or (ii) the close of business on
the tenth Business Day (or such later date as may be determined by action of
the Board of Directors but in no event later than the tenth Business Day after
such time as any Person becomes an Acquiring Person) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan or compensation arrangement of the
Company or of any Subsidiary of the Company, or any entity holding securities
of the Company to the extent organized, appointed or established by the Company
or any Subsidiary of the Company for or pursuant to the terms of any such
employee benefit plan or compensation arrangement) is first published or sent
or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, without the Prior Written Approval of the
Company, which tender or exchange offer would result in any Person becoming the
Beneficial Owner of Voting Power aggregating 20% or more of the outstanding
Voting Power (including any such date which is after the date of this Agreement
and prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (y) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
Right Certificates) and not by separate Right Certificates, as more fully set
forth below, and (z) the Rights (and the right to receive certificates
therefor) will be transferable only in connection with the transfer of the
underlying shares of Common Stock, as more fully set forth below. As soon as
practicable after the Company has notified the Rights Agent of the occurrence
of the Distribution Date, the Company shall prepare and execute, and the Rights
Agent shall countersign and send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown on the records of
the Company, a right certificate, in substantially the form of Exhibit A hereto
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(the "Right Certificate"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided herein. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common Stock, in
substantially the form of Exhibit B hereto (the "Summary of Rights"), by first-
class, postage prepaid mail, to each record holder of the Common Stock as of
the close of business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution Date (or the
earlier redemption, expiration or termination of the Rights), the Rights will
be evidenced by such certificates for the Common Stock registered in the names
of the holders of the Common Stock and the registered holders of the Common
Stock shall also be registered holders of the associated Rights. Until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), the surrender for transfer of any of the certificates for the Common
Stock outstanding in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
(c) Certificates for the Common Stock issued after the Record Date but
prior to the earlier of the Distribution Date or the redemption, expiration or
termination of the Rights shall be deemed also to be certificates for Rights
and shall have impressed, printed or written on, or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Xxxxx Group,
Inc. (the "Company") and Boatmen's Trust Company (the "Rights
Agreement"), as it may from time to time be supplemented or amended,
the terms of which are incorporated herein by reference and a copy of
which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, expire, exchanged or be evidenced by
separate certificates and no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate a copy of the
Rights Agreement without charge promptly after receipt of a written
request therefor. Under certain circumstances, Rights issued to or
held by Acquiring Persons or their Affiliates or Associates (as
defined in the Rights Agreement) and any subsequent holder of such
Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificates.
In the event that the Company purchases or acquires any Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated
with such Common Stock shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with shares of
Common Stock which are no longer outstanding.
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Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall be in
substantially the same form 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, rule or regulation or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
customary usage. Subject to the provisions of Section 11 and Section 22
hereof, the Right Certificates, whenever issued, shall be dated as of the
Record Date, and on their face shall entitle the holders thereof to purchase
such number of shares of Common Stock as shall be set forth therein at the
price per share as set forth therein (the "Purchase Price"), but the number
and identity of such shares and the Purchase Price shall be and remain subject
to adjustment as provided in Sections 11, 13 and 22 hereof.
(b) Any Right Certificate issued pursuant to Section 3(a) hereof that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Right Certificate issued at any time upon the
transfer of any Rights to an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and
any Right Certificate issued pursuant to Section 6 hereof, Section 11 hereof or
Section 22 hereof upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
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 are void in the circumstances specified in Section
7(e) of the Rights Agreement.
The failure to print the foregoing legend on any such Right Certificate or any
defect therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned manually or by
facsimile signature by the Rights Agent or the registrar or co-registrar for
the Common Stock (the "Registrar") and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company whose manual or
facsimile signature is affixed to the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent or the
Registrar and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent or the Registrar, issued
and delivered 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 the execution of such Right Certificate, shall be a proper
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officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its stockholder services office or such other office
designated for such purpose, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates, the certificate number
of each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date (as such term is defined in Section 7(a) hereof), any Right
Certificate or Right Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of shares of Common Stock as the
Right Certificate or Right Certificates surrendered then entitled such holder
to purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
stockholder services office of the Rights Agent or such office designated for
such purpose. Thereupon, the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right Certificates.
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 reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the stockholder services office of the
Rights Agent or such office designated for such purpose, together with payment
of the Purchase Price for each share of Common Stock as to which the Rights are
exercised, at or prior to the close of business on the Expiration Date. The
"Expiration Date", as used in this Agreement, shall be the earliest of (i) the
Final Expiration Date (as defined below), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, or (iii) the time at which the
Rights are exchanged as provided in Section 24 hereof. The "Final Expiration
Date", as used in this Agreement, shall be March 18, 2006.
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(b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $55.00, shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof and shall be payable
in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for each
share of Common Stock to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of the Rights pursuant hereto in
accordance with Section 9 hereof by certified check, bank draft or money order
payable to the order of the Company or the Rights Agent, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i) requisition from
any transfer agent of the shares of Common Stock (or make available, if the
Rights Agent is the transfer agent) certificates for the number of shares of
Common Stock to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) promptly after receipt of
such certificates 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, (iii) when appropriate, requisition from
the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iv) after receipt of any such
cash, promptly deliver such cash to or upon the order of the registered holder
of such Right Certificate, (v) when appropriate, requisition from the Company
the amount of cash or securities issuable upon exercise of a Right pursuant to
the adjustment provisions of Section 11 or the exchange provisions of Section
24, and (vi) after receipt of any such cash or securities, promptly deliver
such cash or securities to or upon the order of the registered holder of such
Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary, upon
the first occurrence of a Section 11(b) Event or a Section 13 Event, any Rights
that are or were at any time on or after the earlier of the Stock Acquisition
Date or the Distribution Date beneficially owned by an Acquiring Person or any
Associate or Affiliate of an Acquiring Person shall become void with respect to
the rights provided under Section 11(b), Section 13(a) and Section 24 hereof
and any holder of such Rights shall thereafter have no right to exercise such
Rights under the provisions of Section 11(b) and Section 13(a) hereof, or to
receive any Common Stock in exchange therefor pursuant to the provisions of
Section 24 hereof.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless the certificate contained in the
appropriate form of election to purchase set forth on the reverse side of the
Right Certificate surrendered for such exercise shall have been properly
completed and duly executed by the registered holder thereof and the Company
shall have been provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
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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 cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights 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 cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Common Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Common Stock or
its authorized and issued shares of Common Stock held in its treasury, the
number of shares of Common Stock that will be sufficient to permit the exercise
in full of all outstanding Rights and, after the occurrence of a Section 11(b)
Event or a Section 13 Event, shall so reserve and keep available a sufficient
number of shares of Common Stock and/or other securities which may be required
to permit the exercise in full of the Rights pursuant to this Agreement.
(b) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Common Stock and/or other
securities delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares or securities.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of an event which would establish
the Distribution Date, a registration statement under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the Expiration Date. The Company will also take such action as may be
appropriate under the "blue sky laws" of the various states.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares of Common Stock and/or other securities upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer involved in the transfer or
delivery of Right Certificates or the issuance or delivery of certificates for
Common Stock and/or other securities in a name other than that of the
registered holder of the Right Certificate evidencing Rights surrendered for
exercise, nor shall the Company be required to issue or deliver any
certificates for shares of Common Stock and/or other securities upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that no such tax
is due.
12
Section 10. Common Stock Record Date. Each person (other than the
Company) in whose name any certificate for shares of Common Stock (or other
securities) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Common Stock (or other
securities) represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock (or other securities) transfer
books of the Company are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Stock (or other securities)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and identity of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) In the event the Company shall at any time after the date of this
Agreement (i) declare a dividend on the Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, (iii) combine the
outstanding Common Stock into a smaller number of shares or (iv) issue any
shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11, the Purchase Price in effect at the
time of the record date for such dividend or the time of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock, including Common Stock, issuable upon exercise of a
Right, shall be proportionately adjusted so that the holder of any Right
exercised after such time, upon payment of the aggregate consideration such
holder would have had to pay to exercise such Right prior to such time, shall
be entitled to receive the aggregate number and kind of shares of capital
stock, including Common Stock, which, if such Right had been exercised
immediately prior to such date and at a time when the Common Stock transfer
books of the Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification.
(b) In the event any Person shall become an Acquiring Person ("Section
11(b) Event"), then proper provision shall be made so that each holder of a
Right, subject to Section 7(e) and Section 24 hereof and except as provided
below, shall after the later of the occurrence of such event and the effective
date of an appropriate registration statement pursuant to Section 9 hereof,
have a right to receive, upon exercise thereof at the then current Purchase
Price multiplied by the then number of shares of Common Stock for which a Right
is then exercisable in accordance with the terms of this Agreement such number
of shares of Common Stock of the Company as shall equal the result obtained by
(y) multiplying the then current Purchase Price by the then number of shares of
Common Stock for which a Right is then exercisable and dividing that product by
(z) 50% of the current market price per one share of Common Stock (determined
13
pursuant to Section 11(f) hereof on the date of the occurrence of the Section
11(b) Event) (such number of shares being referred to as the "number of
Adjustment Shares").
(c) In the event that there shall not be sufficient Treasury shares or
authorized but unissued shares of Common Stock to permit the exercise in full
of the Rights in accordance with the foregoing Section 11(b), and the Rights
become so exercisable, notwithstanding any other provision of this Agreement,
to the extent necessary and permitted by applicable law and any agreements in
effect on the date hereof to which the Company is a party, each Right shall
thereafter represent the right to receive, upon exercise thereof at the then
current Purchase Price, multiplied by the then number of shares of Common Stock
for which a Right is then exercisable, in accordance with the terms of this
Agreement, a number of shares, or units of shares, of (y) Common Stock, and (z)
preferred stock (or other equity securities) of the Company equal in the
aggregate to the number of Adjustment Shares where the Board of Directors shall
have in good faith deemed such shares or units, other than the shares of Common
Stock, to have at least the same value and voting rights as the Common Stock (a
"common stock equivalent"); provided, however, if there are unavailable
sufficient shares (or fractions of shares) of Common Stock and/or common stock
equivalents, then the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock or common stock equivalents for
issuance upon exercise of the Rights, including the calling of a meeting of
stockholders; and provided, further, that if the Company is unable to cause
sufficient shares of Common Stock and/or common stock equivalents to be
available for issuance upon exercise in full of the Rights, then the Company,
to the extent necessary and permitted by applicable law and any agreements or
instruments in effect on the date thereof to which it is a party, shall make
provision to pay an amount in cash equal to twice the Purchase Price (as
adjusted pursuant to this Section 11), in lieu of issuing shares of Common
Stock and/or common stock equivalents. To the extent that the Company
determines that some action needs to be taken pursuant to this Section 11(c),
the Board of Directors by action of at least a majority of its members then in
office may suspend the exercisability of the Rights for a period of up to sixty
(60) days following the date on which the Section 11(b) Event shall have
occurred, in order to decide the appropriate form of distribution to be made
pursuant to this Section 11(c) and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended.
The Board of Directors may, but shall not be required to, establish procedures
to allocate the right to receive Common Stock and common stock equivalents upon
exercise of the Rights among holders of Rights, which such allocation may be,
but is not required to be, pro-rata.
(d) If the Company shall fix a record date for the issuance of rights
or warrants to all holders of Common Stock entitling them (for a period
expiring within 90 calendar days after such record date) to subscribe for or
purchase Common Stock (or securities having the same or more favorable rights,
privileges and preferences as the Common Stock ("equivalent common stock")) or
securities convertible into Common Stock or equivalent common stock, at a price
per share of Common Stock or per share of equivalent common stock or having a
conversion or exercise price per share, as the case may be, less than the
current market price per share of Common Stock (as defined in Section 11(f)
hereof) on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such date by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding on such record date plus the
number of shares of Common Stock which the aggregate offering price of the
14
total number of shares of Common Stock or equivalent common stock to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock and/or
equivalent common stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible).
In case such subscription price may be paid in a consideration, part or all of
which shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent.
Shares of Common Stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(e) If the Company shall fix a record date for the making of a
distribution to all holders of Common Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of earnings or retained earnings of
the Company), assets (other than a dividend payable in Common Stock, but
including any dividend payable in stock other than Common Stock) or convertible
securities, subscription rights or warrants (excluding those referred to in
Section 11(d) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current market price for one share of Common Stock (as defined in
Section 11(f) hereof) on such record date less the fair market value (as
determined in good faith by a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such convertible securities, subscription rights or warrants applicable to
one share of Common Stock, and the denominator of which shall be such current
market price for one share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(f) For the purpose of any computation hereunder, the "current market
price" of any security (a "Security" for purposes of this Section 11(f)), on
any date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as hereinafter
defined) immediately prior to such date; provided, however, that in the event
that the current market price per share of such Security is determined during a
period following the announcement by the issuer of such Security of (i) a
dividend or distribution on such Security payable in shares of such Security or
securities convertible into shares of such Security or (ii) any subdivision,
combination or reclassification of such Security, and prior to the expiration
of 30 Trading Days after the ex-dividend date for such dividend or distribution
or the record date for such subdivision, combination or reclassification, then,
and in each such case, the "current market price" shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
15
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
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 or admitted to trading on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") National Market System, or if the
Security is not listed or admitted to trading on any national securities
exchange or included in the NASDAQ National Market System, the average of the
high bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use, or, if on any such date the Security
is not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Security selected by a majority of the Board of Directors. If on any such date
no market maker is making a market in the Security, the fair value of such
Security on such date as determined in good faith by a majority of the Board of
Directors shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange a day
on which the NASDAQ National Market System is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange or included in the NASDAQ National Market System,
a Business Day. If the Security is not publicly held or not so listed or
traded, "current market price" shall mean the fair value as determined in good
faith by a majority of the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent.
(g) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(g) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share,
as the case may be. Notwithstanding the first sentence of this Section 11(g),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(h) In the event that at any time, as a result of an adjustment made
pursuant to Section 11(a) or (b) hereof, the holder of any Right shall be
entitled to receive upon exercise of such Right any shares of capital stock of
the Company other than shares of Common Stock, thereafter the number of such
other shares 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 the shares contained in Section
11(a) through (e) hereof, inclusive, and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the shares of Common Stock shall apply on like
terms to any such other shares.
(i) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
or other capital stock of the Company purchasable from time to time hereunder
16
upon exercise of the Rights, all subject to further adjustment of the Purchase
Price.
(j) Unless the Company shall have exercised its election as provided
in Section 11(k) hereof, upon each adjustment of the Purchase Price as a result
of the calculations made in Section 11(d) and (e) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest ten-thousandth) obtained by
(i) multiplying (A) the number of shares of Common Stock covered by a Right
immediately prior to the adjustment by (B) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(k) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock 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 shares of Common
Stock for which such 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
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(k), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(l) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(m) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of Common
Stock or other securities issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
17
and nonassessable shares of such Common Stock or other securities at such
adjusted Purchase Price. If upon any exercise of the Rights, a holder is to
receive a combination of Common Stock and common stock equivalents, a portion
of the consideration paid upon such exercise, equal to at least the then par
value of a share of Common Stock of the Company, shall be allocated as the
payment for each share of Common Stock of the Company so received.
(n) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(o) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment a majority of the Board of
Directors shall determine to be advisable in order that any (i) consolidation
or subdivision of the Common Stock, (ii) issuance wholly for cash of any Common
Stock at less than the then current market price, (iii) issuance wholly for
cash of Common Stock or securities which by their terms are convertible into or
exchangeable for Common Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to the holders of its Common Stock, shall not be taxable to such
stockholders.
(p) The Company covenants and agrees that it shall not, at any time
after the Distribution Date and so long as the Rights have not been redeemed
pursuant to Section 23 hereof or exchanged pursuant to Section 24 hereof, (i)
consolidate with, (ii) merge with or into, or (iii) sell or transfer, in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person, if at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(q) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Sections 23 and 24 hereof, take any
action the purpose or effect of which is to diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate and (c) include a brief summary thereof
in a mailing to each holder of a Right Certificate in accordance with
Section 26 hereof, or prior to the Distribution Date, disclose a brief summary
18
in a filing under the Securities Exchange Act of 1934, as amended. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustments therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, directly or indirectly, following the
Distribution Date, (x) the Company shall consolidate with, or merge with and
into, any other Person, (y) any Person shall consolidate with or merge with and
into the Company, and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) the
Company shall sell, or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person other than
to the Company or one or more of its wholly-owned Subsidiaries, then, and in
each such case, proper provision shall be made so that (i) each holder of a
Right, subject to Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price
multiplied by the then number of shares of Common Stock for which a Right is
then exercisable (or if a Section 11(b) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such shares for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(b) Event by the Purchase Price in effect immediately prior to such
first occurrence) in accordance with the terms of this Agreement, such number
of shares of freely tradeable Common Stock of the Principal Party (as
hereinafter defined), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result obtained
by (A) multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right is then exercisable (or if a Section 11(b) Event
has occurred prior to the first occurrence of a Section 13 Event, multiplying
the number of such shares of Common Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(b) Event by the
Purchase Price in effect immediately prior to such first occurrence), and
dividing that product by (B) 50% of the current market price per share of the
Common Stock of such Principal Party (determined in the manner described in
Section 11(f) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) the Principal Party 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 such
Principal Party, it being specifically intended that the provisions of Section
11 hereof, except for the provisions of 11(b), shall apply to such Principal
Party; and (iv) such Principal Party shall take such steps (including, but not
limited to, the authorization and reservation of a sufficient number of shares
of its Common Stock to permit exercise of all outstanding Rights in accordance
with this Section 13(a)) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a) hereof, the Person that is the issuer of
19
any securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person, including the Company, that is the other party to the merger or
consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions; provided, however, that in any
case described in clause (i) or (ii) in this Section 13(b), (x) if the Common
Stock of such Person is not at such time and has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary or Affiliate of another Person,
"Principal Party" shall refer to such other Person; (y) in case such Person is
a Subsidiary, directly or indirectly, or Affiliate of more than one Person, the
Common Stocks of all of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value, and (z) in case such Person
is, or is owned directly or indirectly by, a partnership or joint venture
formed by two or more Persons that are not owned, directly or indirectly, by
the same Person, the rules set forth in (x) and (y) above shall apply to each
of the chains of ownership having an interest in such joint venture as if such
party were a "Subsidiary" of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set forth in
this Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
shares of its authorized Common Stock which have not been issued or reserved
for issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and each Principal Party
and each other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon
as practicable after the date of any consolidation, merger, sale or transfer of
assets mentioned in paragraph (a) of this Section 13, the Principal Party will:
(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, will use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing and will 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;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the "blue sky
laws" of such jurisdictions as may be necessary or appropriate; and
(iii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
20
Section 13 Event shall occur at any time after the occurrence of a
Section 11(b) Event, the Rights which have not theretofore been exercised shall
thereafter also become exercisable in the manner described in Section 13(a)
hereof.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price for any day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, as reported by the NASDAQ National Market
System or, if the Rights are not listed or admitted to trading on any national
securities exchange or included in the NASDAQ National Market System, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by a
majority of the Board of Directors. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by a majority of the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock the Company may pay to the registered holders of Right
Certificates at the time such Right Certificates are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of a share of Common Stock. For purposes of this Section 14(b), the
current market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to Section 11(f) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 hereof giving rise to the right to receive common stock
equivalents (other than Common Stock) or other securities upon the exercise of
a Right, the Company shall not be required to issue fractions of shares or
units of such common stock equivalents or other securities upon exercise of the
Rights or to distribute certificates which evidence fractional shares of such
common stock equivalents or other securities. In lieu of fractional shares or
units of such common stock equivalents or other securities, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
21
the current market value of a share or unit of such common stock equivalent or
other securities. For purposes of this Section 14(c), the current market value
shall be determined in the manner set forth in Section 11(f) hereof for the
Trading Day immediately prior to the date of such exercise and, if such common
stock equivalent is not traded, each such common stock equivalent shall have
the value of one share of Common Stock.
(d) Except as otherwise expressly provided in this Section 14, the
holder of a Right by the acceptance of the Right expressly waives his right to
receive any fractional Rights or any fractional share upon exercise of Rights.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, except for rights of action given to the Rights Agent under
Section 18 or Section 20 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Stock), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right 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
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations
of any Person subject to this Agreement. Holders of Rights shall be entitled
to recover the reasonable costs and expenses, including attorneys' fees,
incurred by them in any action to enforce the provisions of 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 with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the stockholder services office of the Rights Agent or such office designated
for such purpose, 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 (or, prior to the Distribution Date, the
associated Common Stock Certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Stock
Certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise of
22
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability.
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 Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business 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. In case 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 in case 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
the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
23
Agent may countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this 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 thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President
or any Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any adjustment required under the provisions of Sections 11
or 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice to the Rights Agent of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or other securities to be issued pursuant to this Agreement or
any Right Certificate or as to whether any shares of Common Stock 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.
24
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer, employee,
agent or representative 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 reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1, clause 2
and/or, in the case of the certificate attached to the form of election to
purchase, clause 3 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first consulting
with the Company.
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 Stock 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 Stock by registered or certified mail, and
to the holders of the Right Certificates by first-class mail or, prior to the
Distribution Date, through any filing made by the Company pursuant to the
Securities Exchange Act of 1934, as amended. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after 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 his Right Certificate for inspection by the Company),
25
then 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) a corporation organized and doing business under the laws of the
United States or of any state, in good standing, having an office in the States
of New York or Missouri, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$25,000,000, or (b) an affiliate of a corporation described in clause (a) of
this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates or, prior to the Distribution
Date, through any filing made by the Company pursuant to the Securities
Exchange Act of 1934, as amended. Failure to give any notice provided for
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 Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by a majority of the Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or class
of shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the redemption, exchange or
expiration of the Rights, the Company (a) shall with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee benefit plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Right Certificates shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificates would be issued, and (ii) no Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) A majority of the Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of business on the
tenth Business Day following the Stock Acquisition Date or (ii) the Final
Expiration Date, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, as appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
26
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(b) Event until such time as the Company's
right of redemption hereunder has expired. The redemption of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of a majority of the Board of
Directors electing to redeem the Rights, evidence of which shall be promptly
filed with the Rights Agent, or, when appropriate, immediately upon the time or
satisfaction of such conditions as the Board of Directors may have established,
and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. The Company shall promptly
give public disclosure of any such redemption; provided, however, that the
failure to give, or any defect in, any such disclosure shall not affect the
validity of such redemption. Within 10 days after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing
such notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
(c) Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23, Section 24 hereof
and other than in connection with the purchase of Common Stock prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for Common
Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan or compensation arrangement of the
Company or any such Subsidiary, or any entity holding securities of the Company
to the extent organized, appointed or established by the Company or any such
Subsidiary for or pursuant to the terms of any such employee benefit plan or
compensation arrangement), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Voting Power of the
Company.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
27
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company promptly shall give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of Common Stock for
Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of Common
Stock or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, the Company shall
pay to the registered holders of the Right Certificates with regard to which
such fractional shares of Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of
Common Stock (as determined pursuant to the second sentence of Section 11(f)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.
Section 25. Notice of Proposed Actions. In case the Company shall
propose at any time after the Distribution Date (a) to pay any dividend payable
in stock of any class to the holders of its Common Stock or to make any other
distribution to the holders of its Common Stock (other than a regular periodic
cash dividend out of earnings or retained earnings of the Company), or (b) to
offer to the holders of its Common Stock rights or warrants to subscribe for or
to purchase any additional shares of Common Stock or shares of stock of any
other class or any other securities, rights or options, or (c) to effect any
reclassification of its Common Stock (other than a reclassification involving
only the subdivision of outstanding shares of Common Stock), or (d) to effect
any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sales or
other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, or (e) to effect the liquidation, dissolution or winding up of
the Company, or (f) to declare or pay any dividend on the Common Stock payable
in Common Stock or to effect a subdivision, combination or consolidation of the
Common Stock (by reclassification or otherwise than by payment of dividends in
Common Stock), then, in each such case, the Company shall give to each holder
of a Right, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Stock, if any such date is to be fixed.
28
Such notice shall be so given in the case of any action covered by clauses (a)
or (b) above at least ten days prior to the record date for determining holders
of the Common Stock for purposes of such action, and in the case of any such
other action, at least ten days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of Common
Stock, whichever shall be the earlier. The failure to give 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.
In case a Section 11(b) Event shall occur, then 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,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(b) 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:
Xxxxx Group, Inc.
0000 Xxxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
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) as follows:
Boatmen's Trust Company
000 Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Stock Transfer Department
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. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order (a) to cure any ambiguity, (b) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (c) to shorten or lengthen any
time period hereunder (including without limitation to extend the Final
Expiration Date), (d) increase or decrease the Purchase Price, or (e) to change
or supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, however, that from and after
such time as any Person becomes an Acquiring Person, this Agreement shall not
be amended in any manner which would adversely affect the interests of the
holders of Rights; provided further that this Agreement may not be supplemented
or amended to lengthen pursuant to clause (c) of this sentence, (A) the time
29
period relating to the when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of the Rights; provided further
that the Company shall have the right to make any changes unilaterally
necessary to facilitate the appointment of a successor Rights Agent, which such
changes shall be set forth in a writing by the Company or by the Company and
such successor Rights Agent. Without limiting the foregoing, the Company may
at any time prior to such time as any Person becomes an Acquiring Person amend
this Agreement to lower the thresholds set forth in Sections 1(a) and 3(a)
hereof from 20% to not less than the greater of (i) any percentage greater than
the largest percentage of the Voting Power of the Company then known by the
Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, or any employee benefit plan or compensation
arrangement of the Company or any Subsidiary of the Company, and any entity
holding securities of the Company to the extent organized, appointed or
established by the Company or any such Subsidiary for or pursuant to the terms
of any such employee benefit plan or compensation arrangement) together with
all Affiliates or Associates of such Person and (ii) 10%. Upon the delivery of
a certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Stock).
Section 30. 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.
It is the intent of the parties hereto to enforce the remainder of the terms,
provisions, covenants and restrictions of this Agreement to the maximum extent
permitted by law.
Section 31. 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 New York and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
30
Section 33. 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, all as of the day and year first above written.
Attest: XXXXX GROUP, INC.
By /S/ XXXXXX X. XXXXXX By /S/ H. E. RICH
--------------------------------- --------------------------------------
Name: Xxxxxx X. Xxxxxx Name: H. E. Rich
Title: Secretary Title: Executive Vice President and
Chief Executive Officer
Attest: BOATMEN'S TRUST COMPANY
By /S/ XXXXX X. XXXXXX By /S/ H. E. BRADFORD
--------------------------------- --------------------------------------
Name: Xxxxx X. Xxxxxx Name: H. E. Bradford
Title: Vice President Title: Senior Vice President
31
Exhibit A
[Form of Right Certificate]
Certificate No. R- Rights
--------------------
NOT EXERCISABLE AFTER THE EXPIRATION DATE.
AT THE OPTION OF THE COMPANY, THE RIGHTS ARE SUBJECT
TO REDEMPTION AT $.01 PER RIGHT OR EXCHANGE FOR
COMMON STOCK, UNDER THE CIRCUMSTANCES AND
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
[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 ARE VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE RIGHTS AGREEMENT.]*
Right Certificate
XXXXX GROUP, INC.
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of March 7, 1996 (the "Rights Agreement") between
Xxxxx Group, Inc., a New York corporation (the "Company"), and Boatmen's Trust
Company, a Missouri 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. St. Louis, Missouri time on the
Expiration Date, as that term is defined in the Rights Agreement, at the
stockholder services office (or such office designated for such purpose) of the
Rights Agent, or its successor as Rights Agent, one fully paid, nonassessable
share of the Common Stock, par value $3.75 per share ("Common Stock"), of the
Company, at a purchase price of $[55.00] per 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 shares which may be purchased upon exercise of
each Right) and the Purchase Price set forth above, are the number and Purchase
Price as of March 7, 1996 based on the shares of Common Stock of the Company as
constituted at such date.
The Purchase Price and the number of shares of Common Stock which may
be purchased upon the exercise of each of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events as provided in the Rights Agreement.
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 Right Certificates. Copies of
the Rights Agreement are on file at the Company and the above-mentioned office
of the Rights Agent and are also available upon written request to the Company.
---------------
*/ The portion of the legend in brackets shall be inserted
only if applicable.
32
This Right Certificate, with or without other Right Certificates, upon
surrender at the stockholder services office (or such office designated for
such purpose) of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of Common
Stock 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 be redeemed by the Company at its option at a
redemption price of $.01 per Right on or prior to the Stock Acquisition Date
(as defined in the Rights Agreement). In addition, subject to the provisions
of the Rights Agreement, each Right evidenced by this Certificate may be
exchanged by the Company at its option for one share of Common Stock following
the Stock Acquisition Date and prior to the time an Acquiring Person, as that
term is defined in the Rights Agreement, owns 50% or more of the Voting Power,
as that term is defined in the Rights Agreement, of the Company.
No fractional shares of Common Stock will be issued upon the exercise
of any Rights evidenced hereby. In lieu of fractions of a share, 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 shares of Common
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the 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: XXXXX GROUP, INC.
By By
--------------------------------- --------------------------------------
Name: Name:
Title: Title:
Countersigned:
BOATMEN'S TRUST COMPANY
By
---------------------------------
Authorized signature
33
[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 Certificate.)
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: __________ __, _____
---------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
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.
34
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________ __, _____ _____________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
35
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Xxxxx Group, Inc.:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of such Rights and requests that certificates
for such shares be issued in the name of:
Name: _____________________________________________
Address: _____________________________________________
_____________________________________________
Social security
or taxpayer identification
number: _____________________________________________
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:
Name: _____________________________________________
Address: _____________________________________________
_____________________________________________
Social security
or taxpayer identification
number: _____________________________________________
Dated: __________ __, _____
_____________________________________________
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
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.
36
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(3) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________ __, _____ _________________________________________
Signature
(Signature must conform in all respects
to name of holder as specified on the
face of this Right Certificate)
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform 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 form of
Assignment or the form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent 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 such
Assignment or Election to Purchase will not be honored as described in Section
7(e) of the Rights Agreement.
37
Exhibit B
XXXXX GROUP, INC.
SUMMARY OF COMMON STOCK
PURCHASE RIGHTS
On March 7, 1996, the Board of Directors of Xxxxx Group, Inc. (the
"Company") declared a dividend distribution of one Common Stock Purchase Right
(the "Rights") for each outstanding share of Common Stock, par value $3.75 per
share (the "Common Stock"), of the Company (other than shares held in the
Company's treasury). The dividend distribution is payable to the stockholders
of record at the close of business on March 18, 1996. Except as set forth
below, each Right entitles the registered holder to purchase from the Company
one share of Common Stock at a price of $55.00 per share, subject to adjustment
(the "Purchase Price"). The description and terms of the Rights are set forth
in a Rights Agreement ("the Rights Agreement") between the Company and
Boatmen's Trust Company, as Rights Agent (the "Rights Agent").
Until the earlier of (i) the close of business on the tenth business
day following the public announcement or the date that a person or group of
affiliated or associated persons (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) (an "Acquiring Person")
has acquired, or obtained the right to acquire, 20% or more of the outstanding
shares of Common Stock of the Company without the prior express written consent
of the Company executed on behalf of the Company by a duly authorized officer
of the Company following express approval by action of at least majority of the
members of the Board of Directors then in office (the "Stock Acquisition
Date"), or (ii) the close of business on the tenth business day (or such later
date as determined by the Board of Directors but not later than the Stock
Acquisition Date) following the commencement of a tender offer or exchange
offer, without the prior written consent of the Company, by a person (other
than the Company, any subsidiary of the Company or any employee benefit plan of
the Company) which, upon consummation, would result in such party's control of
more than 20% or more of the Company's voting stock (the earlier of the dates
in clause (i) or (ii) above being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of March 18, 1996 (other than shares held in the
Company's treasury), by such Common Stock certificates. The Rights Agreement
provides that, until the Distribution Date, the Rights will be transferred with
and only with the Company's Common Stock. Until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights), new Common Stock
certificates issued after March 18, 1996, upon transfer, new issuance or
issuance from the Company's treasury of the Company's Common Stock, will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption, exchange or expiration of the
Rights), the surrender for transfer of any of the Company's Common Stock
certificates outstanding as of March 18, 1996 will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Company's Common Stock as of the close of business on the
Distribution Date and such separate certificates alone will then evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on March 18, 2006, unless earlier redeemed or exchanged by
the Company, as described below.
38
The Purchase Price payable, and the number of shares of Common Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of the
Common Stock, (ii) upon the issuance of Common Stock or rights to subscribe for
shares of Common Stock or securities convertible into Common Stock at less than
the then current market price of the Common Stock, or (iii) upon the
distribution to holders of Common Stock of securities (other than those
described in (ii) above), evidences of indebtedness or assets (excluding
regular periodic cash dividends out of earnings or retained earnings).
If any person or group (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) acquires 20% or more of
the Company's outstanding voting stock without the prior written consent of the
Board of Directors, each Right, except those held by such persons, would
entitle each holder of a Right to acquire such number of shares of the
Company's Common Stock as shall equal the result obtained by multiplying the
then current Purchase Price by the number of shares of Common Stock for which a
Right is then exercisable and dividing that product by 50% of the then current
per-share market price of Company Common Stock.
If any person or group (other than the Company, any subsidiary of the
Company or any employee benefit plan of the Company) acquires more than 20% but
less than 50% of the outstanding Company Common Stock without prior written
consent of the Board of Directors, each Right, except those held by such
persons, may be exchanged by the Board of Directors for one share of Company
Common Stock.
If the Company were acquired in a merger or other business combination
transaction where the Company is not the surviving corporation or where Company
Common Stock is exchanged or changed or 50% or more of the Company's assets or
earnings power is sold in one or several transactions without the prior written
consent of the Board of Directors, each Right would entitle the holders thereof
(except for the Acquiring Person) to receive such number of shares of the
acquiring company's common stock as shall be equal to the result obtained by
multiplying the then current Purchase Price by the number of shares of Company
Common Stock for which a Right is then exercisable and dividing that product by
50% of the then current market price per share of the common stock of the
acquiring company on the date of such merger or other business combination
transaction.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued. In lieu of
fractional shares, an adjustment in cash will be made based on the market price
of the Common Stock on the last trading date prior to the date of exercise.
The Rights can be redeemed by the Board of Directors for $.01 per
Right at any time prior to the tenth business day following the Stock
Acquisition Date (as defined above). Immediately upon the action of the Board
of Directors of the Company electing to redeem the Rights, the Company shall
make announcement thereof, and the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the redemption
price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to lower certain thresholds described above to not less than the
39
greater of (i) any percentage greater than the largest percentage of the Voting
Power (as defined in the Rights Agreement) of the Company then known by the
Company to be beneficially owned by any person or group of affiliated or
associated persons (other than an excepted person), and (ii) 10%; except that
from and after such time as any person or group of affiliated or associated
person becomes an Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
March 8, 1996. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
