PARK ELECTROCHEMICAL CORP.
and
REGISTRAR AND TRANSFER COMPANY
as Rights Agent
RIGHTS AGREEMENT
Dated as of July 20, 2005
TABLE OF CONTENTS
Section 1. Certain Definitions.........................................2
Section 2. Appointment of Rights Agent.................................8
Section 3. Issuance of Rights Certificates.............................8
Section 4. Form of Rights Certificates................................11
Section 5. Countersignature and Registration..........................12
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates...............................................13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.....................................................14
Section 8. Cancellation and Destruction of Rights Certificates........16
Section 9. Reservation and Availability of Capital Stock..............17
Section 10. Preferred Stock Record Date................................19
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights...........................................19
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares.....................................................30
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power..............................................30
Section 14. Fractional Rights and Fractional Shares....................34
Section 15. Rights of Action...........................................36
Section 16. Agreement of Rights Holders................................36
Section 17. Rights Certificate Holder Not Deemed a Shareholder.........37
Section 18. Concerning the Rights Agent................................38
Section 19. Merger or Consolidation or Change of Name of Rights Agent..39
Section 20. Duties of Rights Agent.....................................39
Section 21. Change of Rights Agent.....................................42
Section 22. Issuance of New Rights Certificates........................43
Section 23. Redemption and Termination.................................43
Section 24. Exchange...................................................44
Section 25. Notice of Certain Events...................................46
Section 26. Notices....................................................47
Section 27. Supplements and Amendments.................................48
Section 28. Successors.................................................49
Section 29. Determinations and Actions by the Board, etc...............49
Section 30. Benefits of this Agreement.................................50
Section 31. Severability...............................................50
Section 32. Governing Law..............................................50
Section 33. Counterparts...............................................51
Section 34. Descriptive Headings.......................................51
Exhibit A Form of Certificate of Amendment of the Certificate of
Incorporation.............................................A-1
Exhibit B Form of Rights Certificate................................B-1
Exhibit C Summary of Rights to Purchase Preferred Stock.............C-1
RIGHTS AGREEMENT
----------------
RIGHTS AGREEMENT, dated as of July 20, 2005, between Park
Electrochemical Corp., a New York corporation (the "Company"), and Registrar
and Transfer Company, a New Jersey corporation, as Rights Agent (the "Rights
Agent").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, on February 2, 1989 (the "1989 Rights Dividend
Declaration Date"), the Board of Directors of the Company (the "Board")
authorized the Rights Agreement, dated as of February 2, 1989, between the
Company and the Rights Agent (the "1989 Rights Agreement"), and declared a
dividend distribution of one right (a "1989 Right") for each share of Common
Stock (as hereafter defined) of the Company outstanding at the close of
business on February 15, 1989 (the "1989 Record Date"). Each 1989 Right
represented the right to purchase one one- hundredth of a share of Series A
Preferred Stock, par value $1 per share, of the Company;
WHEREAS, on July 12, 1995 the 1989 Rights Agreement was
amended and restated in its entirety by the Amended and Restated Rights
Agreement, dated as of July 12, 1995 (the "1995 Amended Rights Agreement"),
between the Company and the Rights Agent;
WHEREAS, the 1995 Amended Rights Agreement expired on July
12, 2005;
WHEREAS, on July 20, 2005, the Board determined it desirable
and in the best interests of the Company and its stockholders for the Company
to renew the benefits afforded by the 1995 Amended Rights Agreement and to
implement such renewal by executing this Agreement (as hereinafter defined)
and declaring the dividend distribution referred to in the fifth WHEREAS
clause herein; and
WHEREAS, on July 20, 2005 (the "Rights Dividend Declaration
Date"), the Board authorized and declared a dividend distribution of one Right
(as hereinafter defined) for each share of Common Stock (as hereinafter
defined) of the Company outstanding at the close of business on July 21, 2005
(the "Record Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of Section 11(i)
hereof) for each share of Common Stock of the Company issued between the
Record Date (whether originally issued or delivered from the Company's
treasury) and the Distribution Date (as hereinafter defined), each Right
initially representing the right to purchase one one- thousandth of a share of
Preferred Stock (as hereinafter defined) having the rights, powers and
preferences set forth in the form of the Certificate of Amendment to the
Certificate of Incorporation, attached hereto as Exhibit A, upon the terms and
subject to the conditions hereinafter set forth (each, a "Right");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, 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 and Associates (as
hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of 15% or more of the shares of Common Stock of the
Company then outstanding, but shall not include an Exempt Person (as
hereinafter defined).
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act (as hereinafter defined); provided,
however, that no Subsidiary of the Company, employee benefit plan of the
Company or any Subsidiary of the Company, or Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any
such plan shall be deemed an Affiliate or Associate.
(d) "Agreement" shall mean this Rights Agreement as
originally executed or as it may from time to time be supplemented, amended,
renewed, restated or extended pursuant to the applicable provisions hereof.
(e) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, owns or has the
right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, rights, warrants,
options or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase
or exchange, (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event (as hereinafter
defined) or (C) securities issuable upon exercise of Rights from and
after the occurrence of a Triggering Event which Rights are Original
Rights (as hereinafter defined) or securities issued pursuant to
Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subParagraph (ii) as a
result of an agreement, arrangement or understanding (whether or not
in writing) to vote such security if such agreement, arrangement or
understanding: (A) 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 provisions of the
General Rules and Regulations under the Exchange Act and (B) is not
also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's Affiliates
or Associates) has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause
(A) of the proviso to subParagraph (ii) of this Paragraph (e)) or
disposing of any voting securities of the Company; provided, however,
that nothing in this Paragraph (e) shall cause a Person engaged in
business as an underwriter of securities to be the "Beneficial Owner"
of, or to be deemed to "beneficially own," any securities acquired,
or which that Person has the right to acquire, through such Person's
participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition, and
then only if such securities continue to be owned by such Person at
such expiration of forty days.
(f) "Board" shall have the meaning set forth in the first
"WHEREAS" clause at the beginning of this Agreement.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such date
is not a Business Day, it shall mean 5:00 P.M., New York City time, on the
next succeeding Business Day.
(i) "Common Stock" when used in reference to the Company,
shall mean the common stock, par value $.10 per share, of the Company or any
other shares of capital stock of the Company into which such stock shall be
reclassified or changed. "Common Stock" when used with reference to any Person
other than the Company organized in corporate form shall mean (i) the capital
stock or other equity interest in such Person with the greatest voting power,
(ii) the equity securities or other equity interest having power to control or
direct the management of such Person or (iii) if such Person is a Subsidiary
(as hereinafter defined) of another Person, the capital stock, equity
securities of, or other equity interest in, the Person or Persons which
ultimately control such first-mentioned Person and which has issued any such
outstanding capital stock, equity securities or equity interest. "Common
Stock" when used with reference to any Person not organized in corporate form
shall mean units of beneficial interest which (x) represent the right to
participate generally in the profits and losses of such Person (including
without limitation any flow- through tax benefits resulting from an ownership
interest in such Person) and (y) are entitled to exercise the greatest voting
power of such Person or, in the case of a limited partnership, have the power
to remove the general partner or partners.
(j) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(k) "Company" shall have the meaning set forth in the first
Paragraph of this Agreement, until a successor corporation or entity shall
have become such or until a Principal Party (as hereinafter defined) shall
assume, and thereafter be liable for, all obligations and duties of the
Company hereunder pursuant to the applicable provisions of this Agreement, and
thereafter, "Company" shall mean such successor or Principal Party,
respectively.
(l) "Current Market Price" shall have the meaning set forth
in Section 11(d) hereof.
(m) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(n) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(o) "Equivalent Preference Stock" shall have the meaning set
forth in Section 11(b) hereof.
(p) "Exchange Ratio" shall mean the meaning set forth in
Section 24(a) hereof.
(q) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement.
(r) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan or employee stock
plan of the Company or of any Subsidiary of the Company, (iv) any Person or
entity organized, appointed, established or holding Common Stock of the
Company by, for or pursuant to the terms of any employee benefit plan or
employee stock plan, (v) a Person who, together with its Affiliates and
Associates, becomes the Beneficial Owner of 15% or more of the shares of
Common Stock of the Company then outstanding solely as a result of a reduction
in the number of shares of Common Stock of the Company outstanding due to the
repurchase of shares of Common Stock of the Company by the Company, unless and
until such time as such Person shall purchase or otherwise become (as a result
of actions taken by such Person or its Affiliates or Associates) the
Beneficial Owner of any additional shares of Common Stock of the Company, (vi)
any Person who the Board in good faith determines has inadvertently become the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, so long as such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no
longer be the Beneficial Owner of 15% or more of the then outstanding shares
of Common Stock of the Company or (vii) any Person who, on the date of
execution of this Agreement, is the Beneficial Owner of 15% or more of the
shares of Common Stock of the Company then outstanding, unless and until such
Person, together with its Affiliates and Associates, while remaining the
Beneficial Owner of 15% or more of the shares of Common Stock of the Company
then outstanding, acquires beneficial ownership of additional shares of Common
Stock of the Company representing half a percent (0.5%) or more of the shares
of Common Stock of the Company then outstanding.
(s) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(t) "Final Expiration Date" shall mean the Close of Business
on July 20, 2015.
(u) "Original Rights" shall mean Rights acquired by a Person
or such Person's Associates or Affiliates prior to the Distribution Date or
issued pursuant to Section 3(a) or Section 22 hereof.
(v) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, limited liability partnership,
association, trust, syndicate or other entity, and includes without limitation
an unincorporated group of individuals who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common purpose or
act.
(w) "Preferred Stock" shall mean shares of Series B Junior
Participating Preferred Stock, par value $1.00 per share, of the Company, and,
to the extent that there are not a sufficient number of shares of Series B
Junior Participating Preferred Stock authorized to permit the full exercise of
the Rights, any other series of preferred stock of the Company designated for
such purpose containing terms substantially similar to the terms of the Series
B Junior Participating Preferred Stock.
(x) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(y) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(z) "Qualifying Offer" shall have the meaning set forth in
Section 11(a)(ii).
(aa) "Record Date" shall have the meaning set forth in the
fifth "WHEREAS" clause at the beginning of this Agreement.
(bb) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(cc) "Rights" shall have the meaning set forth in the fifth
"WHEREAS" clause at the beginning of this Agreement.
(dd) "Rights Agent" shall mean the Person named as the
"Rights Agent" in the first Paragraph of this Agreement until a successor
Rights Agent shall have become such pursuant to the applicable provisions
hereof, and thereafter "Rights Agent" shall mean such successor Rights Agent.
If at any time there is more than one Person appointed by the Company as
Rights Agent pursuant to the applicable provisions of this Agreement, "Rights
Agent" shall mean and include each such Person.
(ee) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(ff) "Rights Dividend Declaration Date" shall have the
meaning set forth in the fifth "WHEREAS" clause at the beginning of this
Agreement.
(gg) "Rights Plan" shall have the meaning set forth in the
first "WHEREAS" clause at the beginning of this Agreement.
(hh) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(ii) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(jj) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(kk) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company that an Acquiring Person has become such.
(mm) "Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which securities or other ownership
interest having ordinary voting power sufficient, in the absence of
contingencies, to elect at least a majority of the board of directors or other
persons performing similar functions of such corporation or other entity are
at the time directly or indirectly beneficially owned or otherwise controlled
by such Person and any Affiliate or Associate of such Person.
(nn) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(oo) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(pp) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(qq) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company 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, upon ten days' prior written notice to
the Rights Agent. The Rights Agent shall have no duty to supervise, and in no
event shall be liable for, the acts or omissions of any such co-Rights Agent.
In the event that the Company appoints one or more co-Rights Agents, the
respective duties of the Rights Agent and any co-Rights Agents shall be as the
Company shall determine, and any actions which may be taken by the Rights
Agent pursuant to the terms of this Agreement may be taken by any such
co-Rights Agent.
Section 3. Issuance of Rights Certificates.
--------------------------------
(a) Until the earlier of (i) the Close of Business on the
tenth Business Day (or such specified or unspecified later date as may be
determined by the Board before the occurrence of a Distribution Date) after
the Stock Acquisition Date (or, if the tenth Business Day (or such later date)
after the Stock Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date) or (ii) the Close of Business on the tenth
Business Day (or such specified or unspecified later date as may be determined
by the Board before the occurrence of a Distribution Date) after the date that
a tender or exchange offer by any Person (other than an Exempt Person) 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 if upon consummation
thereof such Person would be the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding (in the case of (i) and (ii), other than
pursuant to a Qualifying Offer (as hereinafter defined) made at a time when
the Rights are redeemable), or (iii) the date on which the Rights Certificates
are distributed in accordance with Section 13(e) hereof (the earlier of (i),
(ii) and (iii) being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of Paragraphs (b) and (c)
of this Section 3) by the certificates for the Common Stock of the Company
registered in the names of the holders thereof (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not by separate
certificates and (y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the Distribution Date and the
Rights Agent's receipt of a list of shareholders of Common Stock (in the event
that the Rights Agent is not then also acting as the transfer agent for the
underlying Common Stock), the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock of the Company
as of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights certificates,
substantially in the form attached hereto as Exhibit B (each, a "Rights
Certificate"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to
Section 11(i) hereof, at the time of distribution of the Rights Certificates,
the Company shall not be required to issue Rights Certificates evidencing
fractional Rights, but may, in lieu thereof, make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date,
the Company will make available a copy of a summary of Rights (a "Summary of
Rights") substantially in the form attached hereto as Exhibit C to any holder
of the Rights who may so request from time to time prior to the Expiration
Date. With respect to certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights
have been issued shall also constitute the transfer of the Rights associated
with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date and, to the extent provided in Section 22 hereof,
in respect of shares of Common Stock of the Company issued after the
Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Common Stock of the Company shall also be deemed to be
certificates for Rights, and shall, as promptly as practicable following the
Record Date, bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement between
Park Electrochemical Corp. (the "Company") and the Rights Agent
thereunder, dated as of July 20, 2005, as the same may be amended,
restated, renewed or extended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights beneficially
owned (as such term is defined in the Rights Agreement) by any Person
who is, was or becomes an Acquiring Person or any Affiliate or
Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void. The
Rights shall not be exercisable, and shall be void so long as held,
by a holder in any jurisdiction where the requisite qualification to
the issuance to such holder, or the exercise by such holder, of the
Rights in such jurisdiction shall not have been obtained or be
obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the
transfer of any such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
----------------------------
(a) The Rights Certificates (and the forms of election to
purchase, assignment and certificate contained therein to be printed on the
reverse thereof) shall each be substantially in the form attached hereto as
Exhibit B 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
and which do not affect the rights, duties or responsibilities of the Rights
Agent, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22
hereof, the Rights Certificates, whenever distributed, shall be dated as of
the Record Date and on their face shall entitle the holders thereof to
purchase such number of shares of one one-thousandth of a share of Preferred
Stock as shall be set forth therein at the exercise price set forth therein
(such exercise price per one one- thousandth of share, as adjusted from time
to time hereunder, the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a),
Section 11(i) or Section 22 hereof that represents Rights beneficially owned
by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person; (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such;
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A)
a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with
whom such Acquiring Person has any continuing agreement, arrangement or
understanding (whether or not in writing) regarding the transferred Rights or
(B) a transfer which the Board, in its sole discretion, has determined is part
of a plan, arrangement or understanding which has as a primary purpose or
effect avoidance of the provisions of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred
to in this sentence, shall contain (to the extent feasible) the following
legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who is, was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of such
Agreement.
Section 5. Countersignature and Registration.
----------------------------------
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and by the Secretary or any
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be countersigned by an authorized signatory of
the Rights Agent, either manually or by facsimile signature, and shall not be
valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall cease to be
such officer of the Company before countersignature by an authorized signatory
of the Rights Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by an authorized signatory of
the Rights Agent and issued and delivered by the Company with the same force
and effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the execution of this
Agreement any such person was not such an officer.
(b) Following the Distribution Date and receipt by the
Rights Agent of all relevant information, the Rights Agent will keep or cause
to be kept, at its office or offices designated as the appropriate place for
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
-----------------------------------------------
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
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(a) Subject to the provisions of Section 4(b), Section 7(e)
and 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, any Rights Certificate or Certificates (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 24
hereof) may be transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates entitling the registered holder to purchase
a like number of shares of one one-thousandth of a share of Preferred Stock
(or, following the occurrence of a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or Rights Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged, with the forms of assignment and
certificate contained therein duly executed, at the office or offices of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate or Rights Certificates
until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate or Rights Certificates and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon, the Rights Agent shall, subject to Section 4(b), Section 7(e),
Section 14 and Section 24 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment from the holder of a
Rights Certificate of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates. The Rights Agent shall have no duty or
obligation under this Section 6 unless and until it is satisfied that all such
taxes and/or charges have been paid in full.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a valid Rights Certificate and, in case of loss, theft or
destruction, of indemnity or security satisfactory to them, and reimbursement
to the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated. Without limiting the foregoing, the Company
may require the owner of any lost, stolen or destroyed Rights Certificate, or
his legal representative, to give the Company a bond sufficient to indemnify
the Company against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such Rights Certificate or the
issuance of any such new Rights Certificate.
Section 7. Exercise of Rights; Purchase Price; Expiration
----------------------------------------------
Date of Rights.
---------------
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate contained therein duly executed, to the Rights Agent at the
office or offices of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price with respect to the total number
of shares of one one-thousandth of a share of Preferred Stock (or, following
the occurrence of a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i) the Final Expiration Date,
(ii) the time at which all of the Rights are redeemed or exchanged as provided
in Section 23 or Section 24 hereof, respectively or (iii) the time at which
all of the rights expire pursuant to Section 13(d) hereof (the earliest of
(i), (ii) and (iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right shall initially
be $150, shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance with Paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
contained therein duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price, as such amount may be reduced
pursuant to Section 11(a)(iii) hereof, per one one-thousandth of a share of
Preferred Stock (or, following the occurrence of a Triggering Event, for
Common Stock, other securities, cash or other assets, as the case may be) to
be purchased (as set forth below) and an amount equal to any applicable tax or
governmental charge, the Rights Agent shall, subject to Sections 7(f) and
20(k) hereof, thereupon promptly (i)(A) requisition from any transfer agent of
the shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of one one-
thousandths of a share of Preferred Stock to be purchased, and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests or (B) if the Company shall have elected to deposit the total number
of shares of Preferred Stock issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one one- thousandths of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent to comply with such request),
(ii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or, upon the order of the registered holder of such Rights
Certificates, registered in such name or names as may be designated by such
holder, (iii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 hereof and
(iv) after receipt thereof, deliver such cash, if any, to, or upon the order
of, the registered holder of such Rights Certificate, registered in such name
or names as may be designated by such holder. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof)
shall be made in cash or by certified check, cashier's check or bank draft
payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to this Section 7(c) or
Section 11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when necessary to comply with this
Agreement. The Company reserves the right to require, prior to the occurrence
of a Triggering Event, that, upon any exercise of Rights, a number of Rights
be exercised so that only whole shares of Preferred Stock will be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all of the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the provisions of
Sections 6 and 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
such Acquiring Person becomes such or (iii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with such Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from such Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding (whether or not in writing) regarding
the transferred Rights or (B) a transfer which the Board has determined is
part of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and void without
any further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall notify the Rights Agent when this
Section 7(e) applies and shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
neither the Company nor the Rights Agent shall have any liability to any
holder of Rights Certificates or other Person as a result of the Company's
failure to make any determinations with respect to an Acquiring Person or any
of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Rights
Certificate upon the occurrence of any purported assignment or exercise as set
forth in this Section 7 unless such registered holder shall have (i) properly
completed and signed the certificate contained in the form of assignment or
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such assignment or exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company or the Rights Agent shall
reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates and, in such case, shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
----------------------------------------------
(a) The Company covenants and agrees that, from and after
the Distribution Date, it will cause to be reserved and kept available out of
its authorized and unissued shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and issued
shares held in its treasury), the number of shares of Preferred Stock of the
Company (and, following the occurrence of a Triggering Event, the amount of
Common Stock and/or other securities) that, as provided in this Agreement
(including Section 11(a)(iii) hereof) will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
stock exchange, the Company shall use all reasonable efforts to cause, from
and after such time as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) The Company shall use reasonable efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of
a Triggering Event in which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with this
Agreement, or as soon as required by law following the Distribution Date, as
the case may be, a registration statement under the Act on an appropriate form
with respect to the Common Stock of the Company or other securities
purchasable upon exercise of the Rights, (ii) cause such registration
statement to become effective as soon as practicable after such filing and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and
(B) the Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "Blue Sky"
laws of the various states and other jurisdictions in connection with the
exercisability of the Rights. The Company may, acting by resolution of the
Board, temporarily suspend, for a period of time not to exceed 90 days after
the date set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. In the event of any
such suspension, the Company shall promptly notify the Rights Agent thereof
and issue a public announcement stating that the exercisability of the Rights
has been temporarily suspended and shall issue a public announcement (with
prompt notice thereof to the Rights Agent) at such time as the suspension is
no longer in effect. In addition, if the Company shall determine that a
registration statement is required in other circumstances following the
Distribution Date, the Company may similarly temporarily suspend the
exercisability of the Rights until such time as a registration statement has
been declared effective. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained or
the exercise thereof shall not otherwise be permitted under applicable law or
a registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-thousandths of a
share of Preferred Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) The Company further covenants and agrees that, except as
set forth in Section 6(a) hereof and this Section 9(e), it will pay when due
and payable any and all taxes and charges which may be payable in respect of
the issuance or delivery of the Rights Certificates and of any certificates
for a number of one one- thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any tax or charge
which may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a number
of one one-thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in respect of a name other than that of,
the registered holder of the Rights Certificates evidencing Rights surrendered
for exercise, nor shall the Company be required to issue or deliver any
certificates for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in a name other
than that of the registered holder upon the exercise of any Rights until such
tax or charge shall have been paid (any such tax or charge being payable by
the holder of such Rights Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax or charge
is due.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be) represented thereby,
and such certificate shall be dated the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable taxes or charges) was made; provided, however, that if the
date of such surrender and payment is a date upon which the transfer books for
the Preferred Stock (or Common Stock and/or other securities, as the case may
be) are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the transfer books for the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
are open. Prior to the exercise of the Rights evidenced thereby, the holder of
a Rights Certificate, as such, shall not be entitled to any rights of a
shareholder of the Company (or the Principal Party) 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 (or the Principal Party), except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
(or fractions thereof) purchasable upon exercise of each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a) (i) In the event that the Company shall at any
time after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide
or split the outstanding Preferred Stock, (C) combine or consolidate
the outstanding Preferred Stock into a smaller number of shares or
(D) issue any shares of its capital stock in a reclassification of
the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the Purchase
Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, split, combination,
consolidation or reclassification, and the number and kind of shares
of Preferred Stock (or Common Stock and/or other securities, as the
case may be) issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred Stock or
capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date, whether or not such Right
was then exercisable, and at a time when the transfer books for the
Preferred Stock (or other capital stock, as the case may be) of the
Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
split, combination, consolidation or reclassification. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
(ii) In the event (a "Section 11(a)(ii) Event") that
any Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner of 15% or more
of the shares of the Common Stock of the Company then outstanding,
unless the event causing such 15% threshold to be crossed is a
Section 13 Event, or is an acquisition of shares of Common Stock
pursuant to a tender offer or an exchange offer for all outstanding
shares of Common Stock at a price and on terms determined by at least
a majority of the members of the Board who are not officers of the
Company or any of its subsidiaries and who are not representatives,
nominees, Affiliates or Associates of an Acquiring Person, after
receiving advice from one or more investment banking firms, to be (a)
at a price which is fair to the Company's shareholders and not
inadequate (taking into account all factors which such members of the
Board deem relevant, including, without limitation, prices which
could reasonably be achieved if the Company or its assets were sold
on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its shareholders
(a "Qualifying Offer");
then proper provision shall be made so that promptly after the date of
occurrence of such Section 11(a)(ii) Event, each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one
one-thousandths of a share of Preferred Stock, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event (whether or not such
Right was then issued or exercisable) and (y) dividing that product (which
following such first occurrence shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by 50%
of the Current Market Price per share of Common Stock of the Company on the
date of such first occurrence (such number of shares being referred to as the
"Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to
permit the exercise in full of the Rights in accordance with the
foregoing subParagraph (ii) of this Section 11(a), the Company,
acting by resolution of the Board, shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of
a Right (the "Current Value") over (2) the Purchase Price
attributable to each Right (such excess being referred to as the
"Spread") and (B) with respect to all or a portion of each Right
(subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon the exercise of a Right
and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities, if any, of the Company other than Common Stock (including
without limitation shares, or units of shares of Preferred Stock,
which the Board has deemed to have the same value or economic rights
as shares of Common Stock (such shares of Preferred Stock being
referred to herein as "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any combination of
the foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board based
upon the advice of a nationally recognized investment banking firm
selected by the Board; provided, however, that if the Company shall
not have made adequate provision to deliver value pursuant to clause
(B) above within 30 days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) hereof, as
such date may be extended pursuant to Section 23(a) hereof or amended
pursuant to Section 27 hereof, expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. For purposes of the preceding sentence, the term
"Spread" shall mean the excess of (i) the Current Value over (ii) the
Purchase Price. If the Board shall determine in good faith that it is
likely that sufficient additional shares of Common Stock of the
Company could be authorized for issuance upon exercise in full of the
Rights, the 30-day period set forth above may be extended to the
extent necessary, but not more than 90 days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares
(such period, as it may be extended, being referred to herein as the
"Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first and/or third
sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares or to
decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall promptly notify the Rights
Agent thereof and issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and a
public announcement (with prompt notice thereof to the Rights Agent)
at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock of the
Company shall be the Current Market Price per share of the Common
Stock on the Section 11(a)(ii) Trigger Date, and the value of any
Common Stock Equivalent shall be deemed to be equal to the value of
the Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock (or shares having the
same rights, privileges and preferences as the shares of Preferred Stock (such
shares being referred to herein as the "Equivalent Preference Stock")) or
securities convertible into Preferred Stock or Equivalent Preference Stock at
a price per share of Preferred Stock or per share of Equivalent Preference
Stock (or having a conversion price per share, if a security convertible into
Preferred Stock or Equivalent Preference Stock) less than the Current Market
Price per share of Common Stock on such record date, except as otherwise
provided in Section 11(a) and Section 7(e) 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 sum of (i) the number of shares of Preferred
Stock outstanding on such record date and (ii) the number of shares of
Preferred Stock which the aggregate offering price of the total number of
shares of Preferred Stock and/or Equivalent Preference Stock so to be offered
(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 sum of (i) the number of shares of Preferred Stock
outstanding on such record date and (ii) the number of additional shares of
Preferred Stock and/or Equivalent Preference 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 by delivery of consideration, part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good
faith by the Board, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. Shares
of Preferred Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), except as otherwise provided in Section
11(a) and Section 7(e) 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 per share of Preferred Stock on such record
date, less the fair market value (as determined in good faith by the Board,
which determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes) of the portion of the cash,
assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Stock and
the denominator of which shall be such Current Market Price per share of
Preferred 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 be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the "Current
Market Price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days (as hereinafter defined) immediately prior to, but
not including, such date, and for purposes of computations made pursuant to
Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock
on any date shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the 10 consecutive Trading Days immediately
following such date; provided, however, that in the event that the Current
Market Price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock (other than
the Rights) or (B) any subdivision, combination, consolidation, reverse stock
split or reclassification of such Common Stock, and prior to the expiration of
the requisite 30-Trading Day or 10-Trading Day period, as set forth above,
after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination, consolidation, reverse stock split or
reclassification, then, and in each such case, the Current Market Price shall
be properly adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common Stock are
not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system or as quoted by the
Nasdaq National Market with respect to securities listed or admitted to
trading on another national securities exchange or quoted by the Nasdaq
National Market, respectively, or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange or quoted by
the Nasdaq National Market, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by The Nasdaq Stock Market or such other quotation system then in
use or, if on any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board. If on any such date the Common Stock is not publicly
held or is not so listed, admitted to trading or quoted, and no market maker
is making a market in such Common Stock, Current Market Price shall mean the
fair value of such shares on such date as determined in good faith by the
Board, which determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "Current Market Price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock
in Paragraph (i) of this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share of Preferred Stock
cannot be determined in the manner provided above or if the Preferred
Stock is not publicly held or listed or traded in a manner described
in Paragraph (i) of this Section 11(d), the Current Market Price per
share of Preferred Stock shall be conclusively deemed to be an amount
equal to 1000 (as such number may be appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, Current Market Price per share
of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the
Current Market Price of one one- thousandth of a share of Preferred
Stock shall be equal to the Current Market Price of one share of
Preferred Stock divided by 1000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or other share or one-millionth of a share of Preferred Stock,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which mandates
such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof (or the number of
Rights) shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i),
(j), (k), (l) and (m) hereof, and the provisions of Sections 7, 9, 10, 13 and
14 hereof with respect to the Preferred Stock of the Company shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
one-thousandths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths of a share of Preferred Stock (calculated
to the nearest one-millionth of a share) obtained by (i) multiplying (x) the
number of one one-thousandths of a share of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-thousandths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one-thousandth of a Right)
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 (with prompt notice thereof to the Rights Agent) of its election
to adjust the number of Rights, indicating the record date for the adjustment
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-thousandth of a share of Preferred Stock and the number of one
one-thousandths of a share of Preferred Stock which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the number of one
one- thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall use all reasonable efforts to take any corporate
action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue, fully paid and nonassessable, such
number of one one-thousandths of a share of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer (and shall promptly notify
the Rights Agent of any such election) until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of the
number of one one-thousandths of a share of Preferred Stock or other capital
stock or securities of the Company, if any, issuable upon such exercise over
and above the number of one one-thousandths of a share of Preferred Stock or
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 (fractional or otherwise) or securities upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities which by
their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock, shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof) or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or transfer there are any
rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger, sale or transfer, the
shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
Associates or Affiliates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section
27 hereof, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock or
(iii) combine the outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event by a fraction,
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts and computations accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate and (c) if a Distribution Date has occurred, mail or cause the
Rights Agent to mail a brief summary thereof to each record holder of a Rights
Certificate (or, if prior to the Distribution Date, to each record holder of a
certificate representing shares of Common Stock) in accordance with Section 26
hereof. Notwithstanding the foregoing sentence, the failure of the Company to
prepare such certificate or statement or make such filings or mailings shall
not affect the validity of, or the force or effect of, the requirement for
such adjustment. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall have no
duty with respect to and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
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Assets or Earning Power.
------------------------
(a) In the event (a "Section 13 Event") that, directly or
indirectly, (x) the Company shall consolidate or otherwise combine with, or
merge with or into, any other Person or Persons (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof) and the
Company shall not be the continuing or surviving corporation of such
consolidation, combination or merger, (y) any Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof) shall consolidate or otherwise combine with, or merge with or into,
the Company and the Company shall be the continuing or surviving corporation
of such consolidation, combination or merger and, in connection with such
consolidation, combination or merger, all or part of the outstanding shares of
Common Stock of the Company shall be changed into or exchanged for stock or
other securities of any other Person or Persons or cash or any other property
or the shares of Common Stock held by shareholders of the Company immediately
prior to the consummation of the transaction which remain outstanding shall
constitute less than 50% of the total number of shares of Common Stock
outstanding immediately following consummation of the transaction, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or a series of related
transactions, assets, earning power or cash flow aggregating more than 50% of
the assets, earning power or cash flow of the Company and its Subsidiaries
(taken as a whole and calculated on the basis of the Company's most recent
regularly prepared financial statements) to any Person or Persons (other than
the Company or any Subsidiary of the Company in one or more transactions each
of which complies with Section 11(o) hereof), then, and in each such case
(except as may be contemplated by Section 13(d) hereof), proper provision
shall be made so that: (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall, on or after the later of (A) the date of the first
occurrence of any such Section 13 Event or (B) the date of the expiration of
the period within which the Rights may be redeemed pursuant to Section 23
hereof (as the same may be extended pursuant to Section 23(a) hereof or
amended pursuant to Section 27 hereof), thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly authorized and
issued, fully paid, nonassessable and freely tradeable shares of Common Stock
of the Principal Party, not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number of
one one-thousandths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first occurrence
of a Section 13 Event, multiplying the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price per share of the Common
Stock of such Principal Party on the date of consummation of such Section 13
Event; (ii) the shares of Common Stock of such Principal Party received by
each holder of a Right upon exercise of that Right shall be fully paid and
nonassessable; (iii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iv) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event; (v) such Principal Party shall take such steps (including without
limitation the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (vi) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a) hereof, (A)
the Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted, changed or exchanged in
such merger, consolidation or combination (or, if there is more than
one such issuer, the issuer the Common Stock of which has the
greatest market value) or (B) if no securities are so issued, the
Person that is the other party to such merger (and survives the
merger), consolidation or combination (or, if there is more than one
such Person, the Person the Common Stock of which has the greatest
market value), or if the other party to the merger does not survive
the merger, the Person that does survive the merger (including the
Company, if it survives); 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 or, if each Person that is a party to such transaction
or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion
of the assets or earning power cannot be determined, whichever of
such Persons is the issuer of Common Stock having the greatest market
value;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common Stock
of which is and has been so registered, "Principal Party" shall refer to such
other Person; (2) if the Common Stock of such Person is not and has not been
so registered and such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are and have been
so registered, "Principal Party" shall refer to whichever of such Persons is
the issuer of the Common Stock having the greatest aggregate market value; and
(3) if the Common Stock of such Person is not and has not been so registered
and such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such 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 Section 13 Event
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement confirming
that the requirements of Section 13(a) and Section 13(b) hereof shall promptly
be performed in accordance with their terms and that such Section 13 Event
shall not result in a default by the Principal Party under this Agreement as
the same shall have been assumed by the Principal Party pursuant to Section
13(a) and Section 13(b) hereof and further providing that, as soon as
practicable after the date of any such Section 13 Event, the Principal Party
will:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date, and to similarly comply with applicable
state securities laws;
(ii) use its best efforts to list or obtain quotation
of (or continue the listing or quotation of) the Rights and the
securities purchasable upon exercise of the Rights on a national
securities exchange or by an automated quotation service;
(iii) 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 (or any successor form) under the Exchange
Act; and
(iv) use its best efforts to obtain waivers of any
rights of first refusal or preemptive rights in respect of the shares
of Common Stock of the Principal Party subject to purchase upon
exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, combinations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subParagraph (x) or (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons, or a wholly owned subsidiary of any such
Person or Persons, who acquired shares of Common Stock pursuant to a
Qualifying Offer (as such term is defined in Section 11(a)(ii) hereof), (ii)
the price per share of Common Stock offered in such transaction is not less
than the price per share of Common Stock paid to all holders of shares of
Common Stock whose shares were purchased pursuant to such Qualifying Offer and
(iii) the form of consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is the same as the form of
consideration paid pursuant to such Qualifying Offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
(e) The Company covenants and agrees not to consummate a
transaction constituting a Section 13 Event unless a Distribution Date shall
have occurred as a result of the actions described in clauses (i) or (ii) of
Section 3(a) hereof or unless the Board takes all actions that may be
necessary to cause Rights Certificates to be distributed as contemplated by
clause (iii) of Section 3(a) hereof.
Section 14. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Sections 11(i)
and (p) hereof, or to distribute Rights Certificates which evidence fractional
Rights. In lieu of any such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any Trading 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 or the Nasdaq National Market with respect to securities listed on
another principal national securities exchange or quoted by the Nasdaq
National Market, respectively, or if the Rights are not listed or admitted to
trading on any national securities exchange or quoted by the Nasdaq National
Market, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by The
Nasdaq Stock Market or such other quotation system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board. If on any such date no
such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples
of one one- thousandth of a share of Preferred Stock, unless, at the Company's
option, the Company issues depositary receipts therefor) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock, unless, at the Company's option, the Company issues
depositary receipts therefor. In lieu of issuing fractional shares of
Preferred Stock, the Company may, at its election, issue depositary receipts
evidencing fractions of shares pursuant to an appropriate agreement between
the Company and a depositary selected by it; provided, that the holders of
such depositary receipts shall have all of the rights, privileges and
preferences to which they would be entitled as beneficial owners of Preferred
Stock. With respect to fractional shares that are not integral multiples of
one-thousandth of a share of Preferred Stock, if the Company does not issue
such fractional shares or depositary receipts in lieu thereof, there shall be
paid to the registered holders of Rights Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one one- thousandth of a share of Preferred
Stock. For purposes of this SubSection 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the closing price of a share of Preferred Stock (or, if unavailable, the
appropriate alternative price (in each case, as determined pursuant to Section
11(d)(ii) hereof)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one share of Common Stock.
For purposes of this Section 14(c), the current market value of one share of
Common Stock shall be the closing price of one share of Common Stock, or if
unavailable, the appropriate alternative price (in each case, as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of that Right
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, other than rights of action vested in the Rights
Agent hereunder, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in the holder's own
behalf and for the holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, the holder's right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder by any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock of
the Company;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
certificate for Common Stock) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificate or the associated certificate for Common
Stock made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e) hereof, shall be required to be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether
interlocutory or final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or by reason
of any statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining performance
of such obligation; provided, however, that the Company must use its
reasonable best efforts to have any such order, decree, judgment or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
number of one one- thousandths of a share of Preferred Stock or any other
securities of the Company which may at any time be issuable upon the exercise
of the Rights represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18. Concerning the Rights Agent.
----------------------------
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, reimbursement for its reasonable expenses and
counsel fees and disbursements and other disbursements incurred in the
preparation, delivery, administration, amendment 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 demand, judgment, fine, penalty, claim,
settlement, cost or expense incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent as each is finally
determined by a court of competent jurisdiction, for any action taken,
suffered 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 in the premises. The indemnity
provided herein shall survive the termination of this Agreement, the
termination and the expiration of the Rights and the resignation or removal of
the Rights Agent. The reasonable out of pocket costs and expenses incurred in
enforcing this right of indemnification shall be paid by the Company in the
event that the Rights Agent is successful in asserting such right to
indemnification. Anything to the contrary notwithstanding, in no event shall
the Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage.
(b) The Rights Agent shall be authorized to rely on, shall
be protected and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in good faith in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company or upon
any instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document reasonably 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.
-------------
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided, however, that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. If at the time such successor Rights Agent shall succeed to the agency
created by this Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and if at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and if at that time any of the Rights Certificates shall not
have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes only the duties and obligations expressly imposed by this Agreement
(and no implied duties or obligations) upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent,
and the Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitted by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including without limitation the identity of any Acquiring Person
and the determination of Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall
be full authorization and protection to the Rights Agent, and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or
omitted 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 gross negligence, bad faith or willful misconduct, as each is finally
determined by a court of competent jurisdiction.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates, nor shall it be required to verify the same (except
as to its countersignature on such Rights Certificates). All such statements
and recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability for nor be
under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereon); nor shall it be liable or responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor shall it be liable or responsible
for any adjustment required under the provisions of Sections 11, 13 or 24
hereof or responsible for the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt of a certificate describing any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock
or Preferred Stock of the Company to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Common Stock or
Preferred Stock of the Company will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver, or cause to be performed, executed, acknowledged and
delivered, all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such advice or instruction shall be full
authorization and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted
to be taken by it in good faith in accordance with the advice or instructions
of any such officer.
(h) The Rights Agent and any shareholder, director,
Affiliate, officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company, become pecuniarily
interested in any transaction in which the Company may be interested, contract
with or lend money to the Company or otherwise act as fully and freely as
though the Rights Agent were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other Person.
(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 liable, answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company, any
holders or Rights or any other Person resulting from any such act, default,
neglect or misconduct; absent gross negligence or willful misconduct, as each
is finally determined by a court of competent jurisdiction 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 (other than
internal costs incurred by the Rights Agent in providing services to the
Company in the ordinary course of its business as Rights Agent) or in the
exercise of its rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate contained in 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 or
clause 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with
the Company.
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 and Preferred Stock of the Company, by
registered or certified mail, and to the holders of the Rights Certificates,
if any, 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 and Preferred Stock of the Company, by registered or
certified mail, and to the holders of the Rights Certificates, if any, by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by the
Company), then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
If no successor Rights Agent shall have been appointed within 30 days from the
effectiveness of such removal, resignation or incapacity and no registered
holder of any Rights Certificate has applied pursuant to this Agreement for
the appointment of a new Rights Agent, the Company automatically shall be
designated as successor Rights Agent. Any successor Rights Agent appointed by
the Company or by such a court shall be (a) a Person organized and doing
business under the laws of the United States, the State of Delaware or of any
other state of the United States so long as such Person is in good standing,
is authorized to do business in such state, is authorized under such laws to
exercise shareholder services powers, is subject to supervision or examination
by federal or state authority and has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000 or (b) an
Affiliate of a Person 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 shall execute and deliver, if applicable, any
further assurance, conveyance, act or deed necessary for that purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and the Preferred Stock of the Company and shall
mail a notice thereof in writing to the registered holders of the Rights
Certificates, if any. Failure to give any notice provided for in this Section
21, however, or any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of shares of Common Stock
of the Company following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock of the Company so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement or upon the exercise,
conversion or exchange of securities hereafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board, issue
Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Rights Certificate shall be issued if and to the extent that the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued and (ii) no such Rights Certificate shall
be issued if and to the extent that appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
---------------------------
(a) The Board may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day (or such
specified or unspecified later date as may be determined by the Board before
the Rights cease being redeemable) following the Stock Acquisition Date (or,
if the Stock Acquisition Date shall have occurred prior to the Record Date,
the Close of Business on the tenth Business Day following the Record Date) or
(ii) the Final Expiration Date, direct the Company to, and if directed, the
Company shall, redeem all but not less than all of the then outstanding Rights
at a redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The Company may, at its option, pay
the Redemption Price in shares of Common Stock of the Company (based on the
Current Market Price of the Common Stock of the Company at the time of
redemption), cash or any other form of consideration deemed appropriate by the
Board. Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
has expired.
(b) Immediately upon the action of the Board directing the
Company to make the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price
for each Right so held. Promptly after the action of the Board directing the
Company to make the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to each such holder at such holder's last
address as it appears upon the registry books of the Rights Agent, or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made, unless notice is mailed together with such
payment.
Section 24. Exchange.
---------
(a) The Board may, at its option, at any time after the
first occurrence of a Section 11(a)(ii) Event, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become null and 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 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 of the Company or any such Subsidiary, or any entity
holding Common Stock for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board 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 to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly 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 the Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become null
and void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in paragraph (b) of Section 11
hereof) for Common Stock exchangeable for Rights, at the initial rate of one
one-thousandths of a share of Preferred Stock (or Equivalent Preferred Stock)
for each share of Common Stock, as appropriately adjusted to reflect stock
splits, stock dividends and other similar transactions after the date hereof.
(d) In the event that the number of shares of Common Stock
which are authorized by the Company's Certificate of Incorporation, but which
are not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights, is not sufficient to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Board shall take all such
action as may be necessary to authorize additional shares of Common Stock for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock,
there shall be paid to the registered holders of the Rights 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 subSection
(e), 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(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
-------------------------
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular periodic cash dividend out of
earnings or retained earnings of the Company), (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase any
additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of
the Preferred Stock (other than a reclassification involving only the
subdivision or split of outstanding shares of Preferred Stock), (iv) to effect
any consolidation, combination or merger into or with any other Person or
Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of 50% or
more of the assets, earning power or cash flow of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof) or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 26 hereof, a notice of such proposed action which
shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, combination, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock of the
Company, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least 20 days
prior to the record date for determining holders of the shares of Common Stock
of the Company for purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the shares of
Common Stock of the Company, whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then (i)
the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible, and to the Rights Agent, in
accordance with Section 26 hereof, a notice of the occurrence of such event,
which notice shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in
the preceding Paragraph to Preferred Stock of the Company shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, to other
securities.
(c) The failure of the Company to give any notice provided
for in this Section 25, or any defect therein, shall not (i) relieve the
Company of any of its other obligations under this Agreement or (ii) affect
the legality or validity of the action for which such notice was hereby
required.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Park Electrochemical Corp.
00 Xxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Senior Vice President,
Secretary and General Counsel
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
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 Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Account Executive
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of any
certificate representing shares of Common Stock) shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments.
---------------------------
(a) Prior to the Distribution Date, and subject to the
penultimate sentence of this Section 27(a), the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
(including, without limitation, any extension of the period in which the
Rights may be redeemed, any increase in the Purchase Price and any extension
of the Final Expiration Date) without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date, and subject to the penultimate sentence of this Section
27(a), the Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement, so long as the duties, liabilities and
indemnification of the Rights Agent are not affected, without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder (including the redemption period prior to the Rights
becoming non-redeemable), or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person); provided, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed, or to modify the ability
(or inability) of the Board to redeem the Rights, in either case at such time
as the Rights are not then redeemable, or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights (other than an
Acquiring Person or any Affiliate or Associate of an Acquiring Person).
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price or
the number of one one-thousandths of a share of Preferred Stock for which a
Right is exercisable. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock.
(b) 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. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock of the Company outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares
of Common Stock of the Company of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act. The Board shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or to the Company, or
as may be necessary or advisable in the administration of this Agreement,
including without limitation the right and power to (a) interpret the
provisions of this Agreement and (b) make all determinations deemed necessary
or advisable for the administration of this Agreement (including without
limitation a determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, calculations, interpretations and determinations
(including without limitation for purposes of clause (y) below all omissions
with respect to the foregoing) which are done or made by the Board or the
Company in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties and
(y) not subject the Board to any liability to the holders of the Rights or
otherwise and the Rights Agent may assume that any such actions, calculations,
interpretations and determinations made by the Board or the Company, were made
in good faith, without the need to inquire or investigate such action
whatsoever.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock of the
Company) any legal or equitable right, remedy or claim under this Agreement,
but this Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the Common Stock of the
Company).
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the Close of
Business on the tenth Business Day following the date of such determination by
the Board. Without limiting the foregoing, if any provision of this Agreement
requiring that a determination be made by less than the entire Board (or at a
time or with the concurrence of a group of directors consisting of less than
the entire Board) is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination shall then
be made by the entire Board in accordance with applicable law and the
certificate of incorporation and bylaws of the Company, each as then in
effect.
Section 32. Governing Law. The validity, enforceability,
interpretation and performance of this Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by and construed in accordance
with the laws of the State of New York, applicable to contracts made and to be
performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts, and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
[remainder of page intentionally left blank]
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: PARK ELECTROCHEMICAL CORP.
By /s/ Xxxxxxx X. Xxxxxxxx By /s/ Xxxxxx X. Xxxxxx
------------------------ --------------------
Name: Xxxxxxx X. Xxxxxxxx Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President, Title: Senior Vice President and
Secretary and General Counsel Chief Financial Officer
REGISTRAR AND TRANSFER COMPANY,
as Rights Agent
By /s/ Xxxxxxx X. Tatler
---------------------
Name: Xxxxxxx X. Tatler
Title: Vice President
Exhibit A
---------
FORM OF CERTIFICATE OF AMENDMENT
of the
CERTIFICATE OF INCORPORATION
of
PARK ELECTROCHEMICAL CORP.
(Under Section 805 of the New York Business Corporation Law)
It is hereby certified that:
FIRST: The name of the Corporation is PARK ELECTROCHEMICAL
CORP. and the name under which the Corporation was formed was PARK NAME
PLATE INC.
SECOND: The Certificate of Incorporation of the Corporation
was filed with the Department of State of the State of New York on March 31,
1954. The Restated Certificate of Incorporation of the Corporation was filed
with the Department of State of the State of New York on April 10, 1989 and
amended by the Certificates of Amendment of the Certificate of Incorporation
filed with the Department of State of the State of New York on July 17, 1995,
August 16, 1995 and October 11, 2000.
THIRD: The amendment of the Certificate of Incorporation
effected by this Certificate of Amendment is to amend certain provisions in
the Certificate of Incorporation relating to the relative rights, preferences
and limitations of the shares of a series of Preferred Stock, as fixed by the
Board of Directors pursuant to authority expressly vested in the Board in the
Certificate of Incorporation.
FOURTH: To accomplish the foregoing amendment, and given
that none of the shares of the Series A Preferred Stock authorized by the
Corporation have been issued and no shares of such series will be issued
subject to the Certificate of Incorporation, Section 6 of Article III of the
Certificate of Incorporation shall be deleted and a new Section 6 shall be
added to Article III of the Certificate of Incorporation which shall read as
follows:
"The Board of Directors has authorized a series of Preferred
Stock which series shall be designated as Series B Junior
Participating Preferred Stock (the "Series B Junior
Participating Preferred Stock") and the number of shares
constituting such series shall be 60,000.
(a) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series B Junior
Participating Preferred Stock with respect to dividends, the
holders of shares of Series B Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for that
purpose, quarterly dividends payable in cash on the 15th day of
March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of
Series B Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (x)
$.01 or (y) subject to the provision for adjustment hereinafter
set forth, 1000 times the aggregate per share amount of all
cash dividends, and 1000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction
of a share of Series B Junior Participating Preferred Stock. In
the event the Corporation shall at any time after July 20, 2005
(the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the amount to which holders of shares of Series B Junior
Participating Preferred Stock were entitled immediately prior
to such event under clause (y) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
The Corporation shall declare a dividend or
distribution on the Series B Junior Participating Preferred
Stock as provided in the above paragraph immediately after it
declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $.01 per share
on the Series B Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
Dividends shall accrue and be deemed to accrue from
day to day whether or not earned or declared and shall begin to
accrue and be cumulative on outstanding shares of Series B
Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares of Series B Junior Participating Preferred Stock, unless
the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series B
Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series B Junior Participating
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of shares of
Series B Junior Participating Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon,
which record date shall be no more than 30 days prior to the
date fixed for the payment thereof.
(b) Subject to the provision for adjustment
hereinafter set forth, each share of Series B Junior
Participating Preferred Stock shall entitle the holder thereof
to 1000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which
holders of shares of Series B Junior Participating Preferred
Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
Except as otherwise provided herein or by law, the
holders of shares of Series B Junior Participating Preferred
Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
If at any time dividends on any Series B Junior
Participating Preferred Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall xxxx the beginning of a period (herein
called a "default period") which shall extend until such time
when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly
dividend period on all shares of Series B Junior Participating
Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series B
Junior Participating Preferred Stock) with dividends in arrears
in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right
to elect two (2) directors.
During any default period, such voting right of the
holders of Series B Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to the
succeeding paragraph or at any annual meeting of stockholders,
and thereafter at annual meetings of stockholders, provided
that neither such voting right nor the right of the holders of
any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of directors shall be
exercised unless the holders of ten percent (10%) in number of
shares of Preferred Stock outstanding shall be present in
person or by proxy. The absence of a quorum of the holders of
Common Stock shall not affect the exercise by the holders of
Preferred Stock of such voting right. At any meeting at which
the holders of Preferred Stock shall exercise such voting right
initially during an existing default period, they shall have
the right, voting as a class, to elect directors to fill such
vacancies, if any, in the Board of Directors as may then exist
up to two (2) directors or, if such right is exercised at an
annual meeting, to elect one (2) directors. If the number which
may be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall have
the right to make such increase in the number of directors as
shall be necessary to permit the election by them of the
required number. After the holders of the Preferred Stock shall
have exercised their right to elect directors in any default
period and during the continuance of such period, the number of
directors shall not be increased or decreased except by vote of
the holders of Preferred Stock as herein provided or pursuant
to the rights of any equity securities ranking senior to or
pari passu with the Series B Junior Participating Preferred
Stock.
Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their
right to elect directors, the Board of Directors may order, or
any stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may
request the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereon be called by the
President, a Vice-President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting
at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph shall be given to each holder of
record of Preferred Stock by mailing a copy of such notice to
him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not
earlier than 10 days and not later than 60 days after such
order or request or in default of the calling of such meeting
within 60 days after such order or request, such meeting may be
called on similar notice by any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph, no such
special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual
meeting of the stockholders.
In any default period, the holders of Common Stock,
and other classes of stock of the Corporation, if applicable,
shall continue to be entitled to elect the whole number of
directors until the holders of Preferred Stock shall have
exercised their right to elect two (2) directors voting as a
class, after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided
in the fourth paragraph of this Section (b)) be filled by vote
of a majority of the remaining directors theretofore elected by
the holders of the class of stock which elected the director
whose office shall have become vacant. References in this
Section (b) to directors elected by the holders of a particular
class of stock shall include directors elected by such
directors to fill vacancies as provided in clause (y) of the
foregoing sentence.
Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect directors shall cease, (y) the term of any
directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of directors shall be such
number as may be provided for in the certificate of
incorporation or by-laws irrespective of any increase made
pursuant to the provisions of the fourth paragraph of this
Section (b) (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate
of incorporation or by-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the
remaining directors.
Except as set forth herein, holders of Series B
Junior Participating Preferred Stock shall have no special
voting rights and their consent shall not be required (except
to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
(c) Whenever quarterly dividends or other dividends
or distributions payable on the Series B Junior Participating
Preferred Stock as provided in Section (a) are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not earned or declared, on shares of
Series B Junior Participating Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series B Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Junior Participating Preferred
Stock, except dividends paid ratably on the Series B Junior
Participating Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Junior Participating Preferred
Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation
or winding up) to the Series B Junior Participating Preferred
Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Junior Participating
Preferred Stock, or any shares of stock ranking on a parity
with the Series B Junior Participating Preferred Stock, except
in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective Series and classes, shall determine in good faith
will result in fair and equitable treatment among the
respective series or classes.
The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under this Section (c), purchase or
otherwise acquire such shares at such time and in such manner.
(d) Any shares of Series B Junior Participating
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein.
(e) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Series B
Junior Participating Preferred Stock shall have received $10
per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date
of such payment (the "Series B Liquidation Preference").
Following the payment of the full amount of the Series B
Liquidation Preference, no additional distributions shall be
made to the holders of shares of Series B Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing
(i) the Series B Liquidation Preference by (ii) 1000 (as
appropriately adjusted as set forth in the paragraph below to
reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following the
payment of the full amount of the Series B Liquidation
Preference and the Common Adjustment in respect of all
outstanding shares of Series B Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series B
Junior Participating Preferred Stock and holders of shares of
Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock
and Common Stock, on a per share basis, respectively. In the
event, however, that there are not sufficient assets available
to permit payment in full of the Series B Liquidation
Preference and the liquidation preferences of all other series
of preferred stock, if any, which rank on a parity with the
Series B Junior Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of
the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number
by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(f) In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property,
then in any such case the shares of Series B Junior
Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject
to the provision for adjustment hereinafter set forth) equal to
1000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then
in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of
Series B Junior Participating Preferred Stock shall be adjusted
by multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior
to such event.
(g) The shares of Series B Junior Participating
Preferred Stock shall not be redeemable.
(h) Series B Junior Participating Preferred Stock
may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of
holders of Series B Junior Participating Preferred Stock.
(i) The Series B Junior Participating Preferred
Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets, unless the terms of any such
series shall provide otherwise.
(j) This certificate of incorporation shall not be
further amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series
B Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a
majority or more of the outstanding shares of Series B Junior
Participating Preferred Stock, voting separately as a class."
FIFTH: The foregoing amendment of the Certificate of
Incorporation of the Corporation was authorized by a vote at a meeting of the
Board of Directors of the Corporation.
IN WITNESS WHEREOF, we have executed and subscribed
this Certificate and do affirm the foregoing as true under the penalties of
perjury as of this __ day of July, 2005.
------------------------------
-------------------------------
Exhibit B
---------
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER JULY 20, 2015, SUBJECT TO EARLIER REDEMPTION OR
EXPIRATION PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. THE RIGHTS EVIDENCED BY THIS CERTIFICATE SHALL
NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN ANY
JURISDICTION WHERE THE REQUISITE QUALIFICATION FOR THE ISSUANCE TO SUCH
HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION
SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RENEWED RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO IS, WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RENEWED
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(E) OF SUCH AGREEMENT.]*
--------
* The portion of the legend in brackets shall be inserted only if
applicable, shall be modified to apply to an Acquiring Person, as
applicable, and shall replace the preceding sentence.
RIGHTS CERTIFICATE
PARK ELECTROCHEMICAL CORP.
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 July 20, 2005, as amended, restated, renewed
or extended from time to time (the "Rights Agreement"), between Park
Electrochemical Corp., a New York corporation (the "Company"), and Registrar
and Transfer Company, a New Jersey corporation, as Rights Agent (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 P.M., New York
time, on July 20, 2015 at the office or offices of the Rights Agent, or its
successors as Rights Agent, designated for such purpose, one one-thousandths
of a fully paid, nonassessable share of Series B Junior Participating
Preferred Stock of the Company (the "Preferred Stock"), at a purchase price of
$150 per share (the "Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and included
Certificate duly completed and executed. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of July 20, 2005, based on the Preferred
Stock as constituted at such date. The Company reserves the right to require
prior to the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement) that a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued. The holder of the Right evidenced
hereby consents and agrees that, subject to the terms of the Rights Agreement,
the Company and the Rights Agent may deem and treat the person in whose name
this Rights Certificate is registered as the absolute owner hereof and of the
Rights evidenced hereby (notwithstanding any notations of ownership or writing
on this Rights 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 required to be affected by any notice to the contrary.
As more fully set forth in the Rights Agreement, from and
after the first occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person (as such terms are defined in the Rights
Agreement), which is determined to have been involved in or caused or
facilitated, directly or indirectly, such Section 11(a)(ii) Event, (ii) a
transferee of such Acquiring Person (or of any such Associate or Affiliate),
or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of such Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee prior to or concurrently with such Acquiring Person
becoming such, such Rights shall become null and void without any further
action, and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event, whether under
the Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate, are subject to modification and adjustment upon the happening of
certain events, including Triggering Events (as defined in the Rights
Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Reference is also made to the Rights Agreement for
definitions of capitalized terms used and not defined herein. Copies of the
Rights Agreement are on file at the principal office of the Rights Agent and
are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate
or Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of shares of Common Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day following the
Stock Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement) and (ii) the Final Expiration Date (as defined in the Rights
Agreement). In addition, under certain circumstances following the Stock
Acquisition Date, the Rights may be exchanged, in whole or in part, for shares
of the Common Stock, or shares of preferred stock of the Company having
essentially the same value or economic rights as such shares. Immediately upon
the action of the Board of Directors of the Company authorizing any such
exchange, and without any further action or any notice, the Rights (other than
Rights which are not subject to such exchange) will terminate and the Rights
will only enable holders to receive the shares issuable upon such exchange.
If the Company so determines, no fractional shares of
Preferred Stock will be issued upon the exercise of any Right or Rights
evidenced hereby (other than fractions which are integral multiples of one
one-thousandths of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts), but in lieu thereof, a cash
payment will be made, as provided in the Rights Agreement. The Company, at its
election, may require that a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose to be 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 shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
[remainder of page intentionally left blank]
WITNESS the facsimile signature of the proper officers of
the Company.
Dated as of____________, 20__
ATTEST: PARK ELECTROCHEMICAL CORP.
By By
---------------------------- -------------------------------
Name: Name:
Title: Title:
Countersigned:
REGISTRAR AND TRANSFER COMPANY
as Rights Agent
By
----------------------------------
Authorized Signature
[Form of Reverse Side of Rights Certificate]
ASSIGNMENT
----------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED____________________________________________________________
hereby sells, assigns and transfers unto______________________________________
______________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
this Rights Certificate, together with all right, title and interest herein,
and does hereby irrevocably constitute and appoint ____ Attorney, to transfer
the within Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated:__________________, ________
---------------------
Signature
Signature Medallion Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person, or an Associate or Affiliate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Associate or Affiliate of an
Acquiring Person.
Dated:__________________, ________
----------------------------
Signature
Signature Medallion Guaranteed:
NOTICE
------
The signatures to the foregoing Assignment and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: Park Electrochemical Corp.
The undersigned hereby irrevocably elects to exercise
________ Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other Person which may be issuable or such
other assets which may be deliverable upon the exercise of the Rights) and
requests that certificates for any such shares or securities be issued in the
name of and delivered to:
Please insert social security
or other identifying number ______________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the
Rights evidenced by this Rights Certificate, a new Rights Certificate for the
balance of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number ______________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
______________________________________________________________________________
Dated: ______________, _______
--------------------
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person who is or was
an Acquiring Person or an Associate or Affiliate of any such Acquiring Person
(as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of
the undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Associate or Affiliate of an Acquiring Person.
Dated:_____________________, _______
--------------------------
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever.
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 20, 2005, the Board of Directors of Park
Electrochemical Corp. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Company Common Stock to shareholders of
record at the close of business on July 21, 2005 (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company a unit
consisting of one one-thousandth of a share (a "Unit") of Series B Junior
Participating Preferred Stock, par value $1.00 per share (the "Series B Junior
Participating Preferred Stock"), at a Purchase Price of $150 per Unit, subject
to adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement"), dated as of July 20, 2005, between
the Company and Registrar and Transfer Company, as Rights Agent.
Initially, the Rights will be attached to all
Common Stock certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. Subject to certain
exceptions specified in the Rights Agreement, the Rights will separate from
the Common Stock and a Distribution Date will occur upon the earliest to occur
of (i) the tenth business day following the date (the "Stock Acquisition
Date") of the first public announcement by the Company that any person or
group (except for the Company, any subsidiary of the Company, or any employee
benefit plan of the Company or any of its subsidiaries) has become the
beneficial owner of 15% or more of the Common Stock then outstanding, other
than as a result of repurchases of stock by the Company, certain inadvertent
purchases by stockholders, so long as they as promptly as practicable divest a
sufficient number of shares of Common Stock so as to no longer own shares at
or above the 15% ownership threshold, or a person who, on the date of the
Rights Agreement, beneficially owned 15% or more of the Common Stock then
outstanding so long as such person, while the beneficial owner of 15% or more
of the Common Stock then outstanding, does not acquire more than 0.5% or more
of the Common Stock then outstanding, (ii) the tenth business day following
the commencement of a tender or exchange offer if, upon its consummation, the
offeror would become the beneficial owner of 15% or more of the Common Stock
then outstanding, or (iii) a merger or other business combination transaction
involving the Company. Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, (ii) new Common Stock certificates
issued after the Record Date will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
Pursuant to the Rights Agreement, the Company reserves the right to require
prior to the occurrence of a Triggering Event (as defined below) that, upon
any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock will be issued.
The Rights are not exercisable until the
Distribution Date and will expire at 5:00 P.M., New York time, on July 20,
2015, unless earlier redeemed, exchanged, extended or terminated by the
Company as described below. At no time will the rights have any voting power.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the Common Stock as
of the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors, only shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring
Person, except pursuant to an offer for all outstanding shares of Common Stock
which the independent directors determine to be fair and not inadequate to and
to otherwise be in the best interests of the Company and its shareholders,
after receiving advice from one or more investment banking firms (a
"Qualifying Offer"), each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the exercise price of the Right. Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this paragraph, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person will be null and void.
However, Rights are not exercisable following the occurrence of the event set
forth above until such time as the Rights are no longer redeemable by the
Company as set forth below.
For example, at an exercise price of $150 per
Right, each Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding Paragraph would entitle
its holder to purchase $300 worth of Common Stock (or other consideration, as
noted above) for $150. Assuming that the Common Stock had a per share value of
$30 at such time, the holder of each valid Right would be entitled to purchase
10 shares of Common Stock for $150.
In the event that (i) the Company is acquired in a
merger (other than a "clean-up" merger which follows a Qualifying Offer) or
other business combination transaction (x) in which the Company is not the
surviving entity, or (y) in which the Company is the surviving entity and the
Common Stock is changed or exchanged or the Common Stock remains outstanding
but constitutes less than 50% of the shares outstanding immediately following
the merger, or (ii) 50% or more of the Company's assets, earning power or cash
flow is sold or transferred, each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right to
receive, upon exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right. The events set forth in
this paragraph and in the second preceding paragraph are referred to as the
"Triggering Events."
At any time after a person becomes an Acquiring
Person and prior to the acquisition by such person or group of fifty percent
(50%) or more of the outstanding Common Stock, the Board may exchange the
Rights (other than Rights owned by such person or group which have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-thousandths of a share of Preferred Stock (or of a share of a class
or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
At any time until ten business days following the
Stock Acquisition Date, the Company may redeem the Rights in whole, but not in
part, at a price of $0.01 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Immediately upon
the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of the Company, including without
limitation the right to vote or to receive dividends. While the distribution
of the Rights will not be taxable to shareholders or to the Company,
shareholders may, depending upon the circumstances, recognize taxable income
in the event that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company or
in the event of the redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement may
be amended by the Board in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights, or to shorten or
lengthen any time period under the Rights Agreement. The foregoing
notwithstanding, no amendment may be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement is being filed with
the Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A. 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.
