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Harvard Industries, Inc.
and
State Street Bank and Trust Company,
as Rights Agent
Rights Agreement
dated as of March 24, 1999
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent......................................11
Section 3. Issue of Right Certificates......................................12
Section 4. Form of Right Certificates.......................................14
Section 5. Countersignature and Registration................................15
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates...............................................16
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights...........................................................17
Section 8. Cancellation and Destruction of Right Certificates...............20
Section 9. Reservation and Availability of Shares...........................20
Section 10. Preferred Shares Record Date.....................................22
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights........................................................23
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares...........................................................36
Section 13. Consolidation, Merger, Sale or Transfer of Assets or
Earning Power....................................................37
Section 14. Fractional Rights and Fractional Shares..........................40
Section 15. Rights of Action.................................................42
Section 16. Agreement of Right Holders.......................................43
Section 17. Right Certificate Holder Not Deemed a Stockholder................44
Section 18. Concerning the Rights Agent......................................45
Section 19. Merger or Consolidation or Change of Name of Rights Agent........45
Section 20. Duties of Rights Agent...........................................46
Section 21. Change of Rights Agent...........................................49
Section 22. Issuance of New Right Certificates...............................51
Section 23. Redemption.......................................................51
Section 24. Exchange.........................................................52
Section 25. Notice of Certain Events.........................................55
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TABLE OF CONTENTS
Page
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Section 26. Notices..........................................................56
Section 27. Supplements and Amendments.......................................57
Section 28. Successors.......................................................58
Section 29. Determinations and Actions by the Board of Directors.............58
Section 30. Benefits of this Agreement.......................................58
Section 31. Severability.....................................................59
Section 32. Governing Law....................................................59
Section 33. Counterparts.....................................................59
Section 34. Descriptive Headings.............................................59
Exhibit A Form of Certificate of Designation
Exhibit B Form of Right Certificate
Exhibit C Summary of Stockholder Rights Agreement
Exhibit D Form of Irrevocable Proxy
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RIGHTS AGREEMENT
Rights Agreement, dated as of March 24, 1999 (the "Agreement"), between
Harvard Industries, Inc., a Delaware corporation (the "Company"), and State
Street Bank and Trust Company, a Massachusetts trust company (the "Rights
Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one Preferred Share Purchase Right (a "Right") for each Common Share
(as defined in Section 1 hereof) of the Company outstanding on the Record Date
(as defined in Section 1 hereof), each Right representing the right to purchase
one one-hundredth of a Preferred Share (as defined in Section 1 hereof) of the
Company, upon the terms and subject to the conditions set forth in this
Agreement, and has further authorized and directed the issuance of one Right
(subject to adjustment as provided herein) with respect to each Common Share
that shall become outstanding (i) between the Record Date and the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are defined in Sections 3 and 7 hereof) or (ii) between the
Distribution Date and the earlier of the Redemption Date and the Final
Expiration Date as a result of the conversion into Common Shares of any
convertible securities of the Company or any of its Subsidiaries or as a result
of the exercise of any options, warrants or other rights to purchase Common
Shares of the Company, which convertible securities, options, warrants or other
rights were outstanding on the Distribution Date.
Accordingly, in consideration of the mutual agreements set forth in
this Agreement, 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" means any Person who or which, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the aggregate number of Common
Shares of the Company then outstanding, but shall in no event include
any Exempt Person. Notwithstanding the foregoing, (i) no Person shall
become an "Acquiring Person" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of the Company's
Common Shares outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 20% or more of the Common Shares
then outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the Common Shares of the Company
then outstanding by reason of share acquisitions by the Company and
shall, after such share acquisitions by the Company, (A) acquire
Beneficial Ownership of any additional Common Shares and (B)
Beneficially Own after such acquisition 20% or more of the aggregate
number of Common Shares of the Company then outstanding, then such
Person shall be deemed to be an "Acquiring Person"; (ii) Franklin shall
not be deemed to be an "Acquiring Person" for purposes of this
Agreement; provided, however, that if at any time Franklin shall (A)
acquire Beneficial Ownership of any additional Common Shares and (B)
Beneficially Own after such acquisition 27.5% or more of the aggregate
number of Common Shares of the Company then outstanding, then Franklin
shall be deemed to be an "Acquiring Person"; provided, further, that if
at any time Franklin (C) shall acquire Beneficial Ownership of any
additional Common Shares, (D) shall Beneficially Own after such
acquisition more than 2,512,769 Common Shares, but less than 27.5% of
the aggregate number of Common Shares of the Company at the time
outstanding, and (E) shall not have duly signed, dated and delivered to
the Company, on
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or prior to the date such acquisition is effected, an irrevocable proxy
substantially in the form of Exhibit D hereto with respect to all
Common Shares of the Company Beneficially Owned by Franklin immediately
after such acquisition in excess of 2,512,769, then Franklin shall be
deemed to be an "Acquiring Person"; and provided, yet further, that
this clause (ii) shall be inapplicable at all times on and after the
first date on which Franklin shall not Beneficially Own at least 20.0%
of the Common Shares of the Company at the time outstanding; (iii) no
Qualifying Franklin Transferee shall be deemed to be an "Acquiring
Person" for purposes of this Agreement; provided, however, that if
after becoming a Qualifying Franklin Transferee, such Qualifying
Franklin Transferee shall (A) acquire Beneficial Ownership of any
additional Common Shares and (B) Beneficially Own after such
acquisition more than the lesser of (x) 2,512,769 Common Shares, or (y)
the number of Common Shares of the Company owned by such Qualifying
Franklin Transferee immediately after it first became a Qualifying
Franklin Transferee, then such Qualifying Franklin Transferee shall be
deemed to be an "Acquiring Person"; provided, further, that this clause
(iii) shall be inapplicable to any Qualifying Franklin Transferee at
all times on and after the first date on which such Qualifying Franklin
Transferee shall not Beneficially Own at least 20.0% of the Common
Shares of the Company at the time outstanding; (iv) Contrarian shall
not be deemed to be an "Acquiring Person" for purposes of this
Agreement; provided, however, that if at any time Contrarian shall (A)
acquire Beneficial Ownership of any additional Common Shares and (B)
Beneficially Own after such acquisition 30.0% or more of the aggregate
number of Common Shares of the Company then outstanding, then
Contrarian shall be deemed to be an "Acquiring Person"; provided,
further, that if at any time Contrarian (C) shall acquire Beneficial
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Ownership of any additional Common Shares, (D) shall Beneficially Own
after such acquisition more than 2,859,529 Common Shares, but less than
30.0% of the aggregate number of Common Shares of the Company at the
time outstanding, and (E) shall not have duly signed, dated and
delivered to the Company, on or prior to the date such acquisition is
effected, an irrevocable proxy substantially in the form of Exhibit D
hereto with respect to all Common Shares of the Company Beneficially
Owned by Contrarian immediately after such acquisition in excess of
2,859,259, then Contrarian shall be deemed to be an "Acquiring Person";
and provided, yet further, that this clause (iv) shall be inapplicable
at all times on and after the first date on which Contrarian shall not
Beneficially Own at least 20.0% of the Common Shares of the Company at
the time outstanding; (v) no Qualifying Contrarian Transferee shall be
deemed to be an "Acquiring Person" for purposes of this Agreement;
provided, however, that if after becoming a Qualifying Contrarian
Transferee, such Qualifying Contrarian Transferee shall (A) acquire
Beneficial Ownership of any additional Common Shares and (B)
Beneficially Own after such acquisition more than the lesser of (x)
2,859,529 Common Shares, or (y) the number of Common Shares of the
Company owned by such Qualifying Contrarian Transferee immediately
after it first became a Qualifying Contrarian Transferee, then such
Qualifying Contrarian Transferee shall be deemed to be an "Acquiring
Person"; provided, further, that this clause (v) shall be inapplicable
to any Qualifying Contrarian Transferee at all times on and after the
first date on which such Qualifying Contrarian Transferee shall not
Beneficially Own at least 20.0% of the Common Shares of the Company at
the time outstanding; and (vi) if the Board of Directors determines in
good faith that a Person who would otherwise be an Acquiring Person, as
defined pursuant to
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the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer
be an Acquiring Person, as defined pursuant to the foregoing provisions
of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations of the SEC under the Exchange Act, as in effect on the date
of this Agreement, provided that, notwithstanding any provision of such
Rule 12b-2 to the contrary, neither the Company nor any Subsidiary of
the Company shall be deemed, and none of their respective directors,
officers and agents shall be deemed solely by virtue of their
relationship with the Company or a Subsidiary of the Company, to be an
"Affiliate" or an "Associate" of any stockholder of the Company for
purposes of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "Beneficially Own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and among
underwriters and selling group members with respect to a bona
fide public offering of securities), whether or not in
writing, or upon the exercise of conversion rights, exchange
rights, rights (other than these
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Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own, 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; or (B) the
right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing), or to dispose of,
or of which any of them, directly or indirectly, is a
"beneficial owner" (as determined pursuant to Rule 13d-3
promulgated under the Exchange Act, as in effect on the Record
Date); provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to Beneficially Own, any security
if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent
given to such Person or any of such Person's Affiliates or
Associates in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the SEC promulgated under
the Exchange Act and (2) is not then reportable 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
of such other Person) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and among underwriters and selling group members with
respect to a bona fide public offering of securities), whether
or not in writing, for the purpose of acquiring, holding,
voting (other than
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pursuant to a revocable proxy or consent as described in the
proviso to Section 1(c)(ii)(B) hereof) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of "Beneficial Ownership"
to the contrary, the phrases "then outstanding" or "issued and
outstanding," when used with reference to a Person's Beneficial
Ownership of securities of the Company, means the number of such
securities then issued and outstanding together with the number of such
securities not then issued and outstanding which such Person would be
deemed to Beneficially Own hereunder.
(d) "Board of Directors" means the Board of Directors of the
Company.
(e) "Business Day" means any day other than a Saturday, a
Sunday, or a day on which banking institutions in The Commonwealth of
Massachusetts are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date means 5:00 p.m.,
Eastern time, on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 p.m., Eastern time, on the next
succeeding Business Day.
(g) "Common Shares", when used with reference to the Company,
means the common stock, par value $0.01 per share, of the Company or,
when used with reference to any Person other than the Company, means
the capital stock (or other equity interest) with the greatest voting
power of such other Person or, if such Person is a Subsidiary of
another Person, of the Person or Persons which ultimately controls or
control such first-mentioned Person.
(h) "Company" means Harvard Industries, Inc., a Delaware
corporation.
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(i) "Contrarian" means collectively, at any time of
determination, Contrarian Capital Advisors, L.L.C., Contrarian Capital
Management, L.L.C. and Contrarian Capital Fund II, L.P., and their
respective Affiliates and Associates at such time.
(j) "Distribution Date" is defined in Section 3.
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended.
(l) "Exempt Person" means (i) the Company; (ii) any Subsidiary
of the Company; and (iii) any employee benefit plan of the Company or
any Subsidiary of the Company, or any entity holding Common Shares of
the Company for or pursuant to the terms of any such plan or related
trust.
(m) "Final Expiration Date" is defined in Section 7.
(n) "Franklin" means collectively, at any time of
determination, Franklin Advisers, Inc., Franklin Resources, Inc.,
Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxx, and their respective
Affiliates and Associates at such time.
(o) "Person" means any individual, firm, corporation, limited
liability company, partnership or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(p) "Preferred Shares" means the Series A Junior Participating
Preferred Stock, par value $0.01 per share, of the Company having the
rights, preferences and limitations thereof set forth in the Form of
Certificate of Designation attached to this Agreement as Exhibit A.
(q) "Purchase Price" is defined in Section 4.
(r) "Qualifying Contrarian Transferee" means any Person
(including such Person's Affiliates and Associates) other than
Contrarian which acquires in a single
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transaction, either from Contrarian or from a Qualifying Contrarian
Transferee, not more than 2,859,529 Common Shares of the Company,
provided that immediately following such transaction, the aggregate
number of Common Shares Beneficially Owned by such acquiring Person and
its Affiliates and Associates (x) constitutes 20.0% or more of the
Common Shares of the Company outstanding at the time of such
transaction and (y) does not exceed the lesser of (i) 2,859,529 Common
Shares or (ii) the aggregate number of Common Shares Beneficially Owned
immediately prior to such transaction by the transferor and its
Affiliates and Associates; provided, further, that within ten (10)
calendar days after the date of such transaction, such acquiring Person
shall deliver a written notice to the Company at its principal
executive office, stating that such Person is a Qualifying Contrarian
Transferee, and setting forth (A) the date of such transaction, (B) the
aggregate number of Common Shares acquired in such transaction, (C) the
name and address of each Person from whom Common Shares were acquired
in such transaction, and (D) the aggregate number of Common Shares
Beneficially Owned immediately following such transaction by such
acquiring Person and its Affiliates and Associates.
(s) "Qualifying Franklin Transferee" means any Person
(including such Person's Affiliates and Associates) other than Franklin
who acquires in a single transaction, either from Franklin or from a
Qualifying Franklin Transferee, not more than 2,512,769 Common Shares
of the Company, provided that immediately following such transaction,
the aggregate number of Common Shares Beneficially Owned by such
acquiring Person and its Affiliates and Associates (x) constitutes
20.0% or more of the Common Shares of the Company outstanding at the
time of such transaction and (y) does not exceed the lesser of (i)
2,512,769 Common Shares or (ii) the aggregate number of
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Common Shares Beneficially Owned immediately prior to such transaction
by the transferor and its Affiliates and Associates; provided, further,
that within ten (10) calendar days after the date of such transaction,
such acquiring Person shall deliver a written notice to the Company at
its principal executive office, stating that such Person is a
Qualifying Franklin Transferee, and setting forth (A) the date of such
transaction, (B) the aggregate number of Common Shares acquired in such
transaction, (C) the name and address of each Person from whom Common
Shares were acquired in such transaction, and (D) the aggregate number
of Common Shares Beneficially Owned immediately following such
transaction by such acquiring Person and its Affiliates and Associates.
(t) "Record Date" means the Close of Business on April 5,
1999.
(u) "Redemption Date" is defined in Section 7.
(v) "Redemption Price" is defined in Section 23.
(w) "Right Certificate" is defined in Section 3(a).
(x) "Rights Agent" means State Street Bank and Trust Company,
a Massachusetts trust company, as Rights Agent, and its successors in
such capacity.
(y) "SEC" means the Securities and Exchange Commission.
(z) "Securities Act" means the Securities Act of 1933, as
amended.
(aa) "Shares Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a filing with the SEC pursuant to Section 13(d) or
13(g) under the Exchange Act) by the Company or an Acquiring Person (or
any Affiliate or Associate of such Acquiring Person) that an Acquiring
Person has become such.
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(bb) "Subsidiary" of any Person means any corporation or other
entity of which a majority of either the voting power of the voting
equity securities or the equity interest is owned, directly or
indirectly, by such Person.
(cc) "Summary of Rights" is defined in Section 3(b).
(dd) The term "Trading Day" means a day on which the principal
national securities exchange on which the Common Shares are listed or
admitted to trading is open for the transaction of business or, if the
Common Shares are not listed or admitted to trading on any national
securities exchange, a day on which the Common Shares are quoted on The
Nasdaq Stock Market ("Nasdaq") or such other system then in use or, if
the Common Shares are not quoted by any such system, a Business Day.
(ee) "Triggering Event" means any event described in Section
11(a)(ii) or Section 13(a) of this Agreement.
Any determination or interpretation required in connection with any of the
definitions contained in this Section 1 shall be made by the Board of Directors
in its good faith judgment, which determination shall be final and binding.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares of 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 (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent.
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Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth day after the Shares Acquisition Date or (ii) the Close of
Business on the tenth Business Day (or such later date as may be
determined by action of the Board of Directors taken before any Person
becomes an Acquiring Person) after the date of the commencement of, or
the first public announcement of the intent to commence, a tender or
exchange offer by any Person (other than any Exempt Person), the
consummation of which would result in any Person becoming an Acquiring
Person (including with respect to both clauses (i) and (ii) any such
date which is after the date of this Agreement and prior to the
issuance of the Rights; the Close of Business on the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for Common Shares registered in the
names of the holders thereof (which certificates shall also be deemed
to be Right Certificates) and not by separate Right Certificates, and
(y) the Rights will be transferable only in connection with and will be
transferred by the transfer of Common Shares. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause to be
sent (and the Rights Agent will, if requested by the Company, send) by
first-class, postage prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held,
subject to adjustment as provided in this Agreement. As of and after
the Close of Business on the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
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(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Stockholder Rights
Agreement, in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage prepaid mail, to each
record holder of Common Shares as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for Common Shares outstanding as
of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates for Common Shares registered in the
names of the holders thereof together with a copy of the Summary of
Rights. Until the Close of Business on the Distribution Date (or, if
earlier than the Distribution Date, the earlier of the Redemption Date
or the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, with or
without a copy of the Summary of Rights, shall also constitute the
transfer of the Rights associated with the Common Shares represented
thereby.
(c) Certificates issued for Common Shares (including, without
limitation, certificates issued in respect of reacquired Common Shares
referred to in the last sentence of this paragraph (c)) after the
Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Harvard Industries, Inc., a Delaware corporation (the
"Company"), and State Street Bank and Trust Company, a
Massachusetts trust company (the "Rights Agent"), dated as of
March 24, 1999 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is
on file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement,
such rights 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 without
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charge after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights
held by a Person who is or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement) and certain transferees thereof, whether
currently held by or on behalf of such person or by any
subsequent holder, shall become null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Final
Expiration Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby. If the Company purchases or
otherwise acquires any Common Shares after the Record Date but before
the Distribution Date, any Rights associated with such Common Shares
shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a
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Preferred Share as shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "Purchase Price"), but the number
and type of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President, any of its Vice
Presidents or its Treasurer, either manually or by facsimile signature,
and have affixed thereto the Company's seal or a facsimile thereof, and
shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. If any
officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any Person
who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at an office or agency designated for such
purpose, books for registration and transfer of
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the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 11(a)(iii) and
Section 14 of this Agreement, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Final Expiration Date, any
Right Certificate or Certificates (other than Right Certificates
representing Rights that have been exchanged pursuant to Section 24 of
this Agreement) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a
Preferred Share (or, following the occurrence of a Triggering Event,
Common Shares, and/or other securities, cash or other property, as the
case may be) as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
office or agency of the Rights Agent designated for such purpose.
Notwithstanding anything in this Agreement to the contrary, 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 until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side
of such Rights Certificate and shall have provided such
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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 countersign
and deliver to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory
to them, and, at the Company's request, reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to the provisions of Section 11(a)(iii) of this
Agreement, the registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon surrender
of the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights
Agent at the office or agency of the Rights Agent designated for such
purpose, together with payment of the Purchase Price for each one
one-hundredth of a Preferred Share (or, following the occurrence of a
Triggering Event, Common Shares and/or other securities, cash or other
property, as the case may be) as
-17-
to which the Rights are exercised, at or prior to the earlier of the
Close of Business on (i) March 24, 2009 (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section
23 of this Agreement (the "Redemption Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24 of this
Agreement.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share purchasable pursuant to the exercise of a Right shall
initially be $30.00, shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c)
of this Section 7.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares
(or, following the occurrence of a Triggering Event, Common Shares
and/or other securities, cash or other property, as the case may be) to
be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check, cashier's check or
money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the
transfer agent) certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, (ii) if the Company shall have
elected to deposit the Preferred Shares issuable upon exercise of the
Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased in which case certificates for
the Preferred Shares represented by such
-18-
receipts shall be deposited by the transfer agent with the depositary
agent and the Company hereby directs the depositary agent to comply
with such request, (iii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iv) promptly 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 Right
Certificate, registered in such name or names as may be designated by
such holder and (v) when appropriate, after receipt, promptly deliver
such cash to or upon the order of the registered holder of such Right
Certificate. If the Company elects or is obligated to issue other
securities (including Common Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) of this Agreement,
the Company will make all arrangements necessary so that such other
securities, cash and/or property are available for distribution by the
Rights Agent, if and when appropriate.
(d) If the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Sections 11(a)(iii) and 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to a registered holder upon
the occurrence of any purported exercise as set forth in this Section 7
until the registered holder shall have completed and signed the
certificate contained in the form of election to purchase on the
reverse side of the Rights Certificate surrendered for such exercise
and the Company shall have been provided such additional evidence of
the
-19-
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably
request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares. The Company will
cause to be reserved and kept available for the exercise of Rights, out of its
authorized but unissued Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) or any Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) held in its treasury, such number of Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) as will be sufficient to permit the exercise in full of all
outstanding Rights.
So long as any securities purchasable upon the exercise of Rights are
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the
-20-
Rights become exercisable, all shares reserved for such issuance to be listed on
such exchange or approved for listing on such exchange upon official notice of
issuance.
The Company shall use its best efforts to (i) file, as soon as is
required by law following the Distribution Date, a registration statement on an
appropriate form under the Securities Act with respect to the 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 Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable or (B) the Final
Expiration Date. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercise of the Rights. The Company may
temporarily suspend, for a period of time not to exceed one hundred twenty (120)
days after the Distribution Date, the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite registration
or qualification in such jurisdiction shall have been obtained.
The Company will take all such action as may be necessary to ensure
that all Preferred Shares (or Common Shares and/or other securities, as the case
may be) delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (or Common Shares and/or other
securities, as the case may be), subject to payment of the Purchase Price, be
duly and validly authorized and issued and fully paid and non-assessable.
-21-
The Company will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Preferred Shares (or Common Shares
and/or other securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or depositary receipts
for the Preferred Shares (or Common Shares and/or other securities, as the case
may be) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, or to issue or deliver
any certificates or depositary receipts for Preferred Shares (or Common Shares
and/or other securities, as the case may be) upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares (or Common Shares 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 the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares or securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Shares (or Common Shares and/or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of Preferred Shares
(or Common
-22-
Shares and/or other securities, as the case may be) for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares purchasable upon the
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 the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable
in Preferred Shares, or in securities convertible into, or exercisable
for, Preferred Shares, (B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), then the Purchase Price in
effect immediately prior to the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
then issuable upon the exercise of a Right shall be proportionately
adjusted so that the holder of any
-23-
Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock (or securities
convertible into, or exercisable for, capital stock) which, if such
Right had been exercised immediately prior to such time and at a time
when the Preferred Shares transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs that would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) of this Agreement, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made before, any
adjustment required pursuant to Section 11(a)(ii) of this Agreement.
(ii) Subject to Section 24 of this Agreement, if any Person or
group of Persons shall become an Acquiring Person, then each holder of
a Right (except as provided below) shall thereafter have a right to
receive, upon exercise thereof and in lieu of Preferred Shares, at a
price equal to the then-current Purchase Price multiplied by the number
of one one-hundredths of a Preferred Share for which a Right is then
exercisable in accordance with the terms of this Agreement, such number
of Common Shares of the Company as shall equal the result obtained by
(x) multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then-current
per share market price of the Company's
-24-
Common Shares (determined pursuant to Section 11(d) of this Agreement)
on the date of the occurrence of such event. In the event that any
Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the
Rights.
(iii) Notwithstanding any other provisions of this Agreement
to the contrary, from and after the occurrence of a Triggering Event,
any Rights that are Beneficially Owned by (A) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (B) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes
a transferee after the Acquiring Person becomes such, or (C) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who became a transferee prior to or concurrently with the
Acquiring Person becoming such and received such Rights pursuant to
either (x) 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 the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (y) a transfer which the Board of Directors has
reasonably determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section
11(a)(iii), shall become null and void without any further action and
no holder of such Rights shall thereafter have any right to exercise
such Rights under any provision of this Agreement. No Right Certificate
shall be issued at any time upon the transfer of any Rights to any
Person whose Rights would be void pursuant to the preceding sentence or
any Associate or Affiliate thereof or to any
-25-
nominee of such Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to any Person
whose Rights would be void pursuant to the preceding sentence shall be
cancelled. The Company may require (or cause the Rights Agent to
require) any Person who purports to exercise any Rights to establish to
the reasonable satisfaction of the Company that he, she or it is not a
Person whose Rights would be void pursuant to the first sentence of the
preceding paragraph of this Section 11(a)(iii). The Company shall use
all reasonable efforts to insure that the provisions of this Section
11(a)(iii) are complied with, but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(iv) In lieu of issuing Common Shares of the Company in
accordance with Section 11(a)(ii) hereof, the Company may, in the sole
discretion of the Board of Directors, elect to (and, in the event that
the Board of Directors has not exercised the exchange right contained
in Section 24 hereof and there are not sufficient issued but not
outstanding and authorized but unissued Common Shares to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall) take all such action as may be
necessary to authorize, issue or pay, upon the exercise of the Rights,
cash (including by way of a reduction of the Purchase Price), property,
other securities or any combination thereof having an aggregate value
equal to the value of the Common Shares of the Company which otherwise
would have been issuable pursuant to Section 11(a)(ii), which aggregate
value shall be determined by a majority of the Board of Directors. For
purposes of the preceding sentence, the
-26-
value of the Common Shares shall be determined pursuant to Section
11(d) hereof and the value of any equity securities which a majority of
the Board of Directors determines to be a "common stock equivalent"
(including the Preferred Shares, in such ratio as the Board of
Directors shall determine) shall be deemed to have the same value as
the Common Shares. Any such election by the Board of Directors must be
made and publicly announced within 60 days following the date on which
the event described in Section 11(a)(ii) shall have occurred. Following
the occurrence of the event described in Section 11(a)(ii), a majority
of the Board of Directors then in office may suspend the exercisability
of the Rights for a period of up to 60 days following the date on which
the event described in Section 11(a)(ii) shall have occurred to the
extent that such directors have not determined whether to exercise the
Company's right of election under this Section 11(a)(iv). In the event
of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Shares (or shares having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preference shares")) or
securities convertible into Preferred Shares or equivalent preference shares (or
having a conversion price per share, if a security convertible into Preferred
Shares or equivalent preference shares) less than the then-current per share
market price of the Preferred Shares (determined pursuant to Section 11(d) of
this Agreement) on such record date, the Purchase Price to be in effect after
such record date shall be determined by
-27-
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
and equivalent preference shares outstanding on such record date plus the number
of Preferred Shares and equivalent preference shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preference shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number of
Preferred Shares and equivalent preference shares outstanding on such record
date plus the number of additional Preferred Shares and/or equivalent preference
shares to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent. Preferred Shares and equivalent preference shares owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and if 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) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a
-28-
consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, assets or shares of capital stock
(other than a regular cash dividend or a dividend payable in Preferred Shares)
or subscription rights or warrants (excluding those referred to in Section 11(b)
of this Agreement), 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
then-current per share market price of the Preferred Shares (as defined in
Section 11(d) of this Agreement) on such record date, less the fair market value
(as determined in good faith by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the evidences of indebtedness, assets or shares of capital stock so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price (as defined in Section 11(d) of this Agreement) of the Preferred
Shares; provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
if such distribution is not so made, the Purchase Price shall again be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder, other than under
Section 11(a)(iv) hereof, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d)) on any
date shall be deemed to be the average of the daily closing prices per
share equivalent of such Security for the 30 consecutive Trading Days
immediately prior to such date, and for purposes of Section
-29-
11(a)(iv) hereof, the "current per share market price" of a Security on
any date shall be deemed to be the average of the daily closing prices
per share equivalent of such Security for the 30 consecutive Trading
Days immediately following such date; provided, however, that if the
current per share equivalent market price of the Security is determined
with respect to a date, which date follows the announcement by the
issuer of such Security of (A) a dividend or distribution on such
Security payable in such Security or securities convertible into such
Security (other than the Rights) or (B) any subdivision, combination or
reclassification of such Security, and which date precedes the
expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security.
The closing price for each day shall be the last sale price, regular
way, or, if 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 a Security listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed
or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by Nasdaq or such other system
then in use, or,
-30-
if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Security selected by the Board of Directors. If on any such date no
market maker is making a market in the Security, the fair value of such
Security on such date as determined in good faith by the Board of
Directors shall be used. If the Security is not publicly held or not so
listed or traded, "current per share market price" shall mean the fair
value per share equivalent as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed
with the Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither
the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the
Rights Agent.
(e) Notwithstanding any provision of this Agreement to the contrary, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price; provided, however,
that any adjustments
-31-
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 one one-millionth of a Preferred Share or one ten-thousandth of any
other share or security 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 requires such adjustment or (ii) the date of the expiration of the right
to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) of this Agreement, the holder of any Right thereafter exercised
shall become entitled to receive any Common Shares or other securities of the
Company other than Preferred Shares, thereafter the number of such other shares
or securities so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
this Section 11 and the provisions of Sections 7, 9, 10, 13 and 14 of this
Agreement with respect to the Preferred Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such
-32-
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-hundredths of a share 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 as a result of the calculations made in Section 11(b) and (c) to
adjust the number of Rights, in substitution for any adjustment pursuant to
Section 11(h), in the number of one one-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this
-33-
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 of this Agreement, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Preferred Shares or
other shares of capital stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable Preferred Shares or other such shares at such adjusted Purchase
Price.
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(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) After the earlier of the time that any Person becomes an Acquiring
Person and the Distribution Date, the Company will not, except as permitted by
Sections 23, 24 and 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.
(n) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to hereinabove
-35-
in this Section 11, hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
(o) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
number of one one-hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number
of one one-hundredths of a Preferred Share so purchasable immediately prior to
such event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (B) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(o) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares or
the Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof.
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Section 13. Consolidation, Merger, Sale or Transfer of Assets or
Earning Power.
(a) If, directly or indirectly, at any time after the time
that any Person becomes an Acquiring Person, (i) the Company shall
consolidate with, or merge with and into, any other Person, (ii) any
Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or
part of the Common Shares of the Company shall be changed into or
exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property, or (iii) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or one or more of its wholly-owned
Subsidiaries), then, and in each such case, proper provision shall be
made so that (A) each holder of a Right (except any Person whose Rights
shall have become void pursuant to Section 11(a)(iii) of this
Agreement) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable
Common Shares of the Principal Party (as hereinafter defined), free and
clear of all liens, rights of call or first refusal, encumbrances or
other adverse claims, as shall be equal to the result obtained by (x)
multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the time that any Person became an Acquiring
Person
-37-
and dividing that product by (y) 50% of the current per share market
price of the Common Shares of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (B) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such issuer; and (D)
such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in accordance
with Section 9 hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common
Shares thereafter deliverable upon the exercise of the Rights. The
provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
(b) The Company shall not enter into any transaction of the
kind listed in Section 13(a) if at the time of such transaction there
are any rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the consummation of
such transaction, would substantially diminish or eliminate the
benefits intended to be afforded by the Rights.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such
issuer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or
transfer mentioned in paragraph (a) of this Section 13, such issuer
will:
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(i) prepare and file a registration statement on an
appropriate form under the Securities Act, with respect to the Rights
and the securities purchasable upon exercise of the Rights, and will
use its best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;
(ii) deliver to holders of the Rights historical financial
statements for such issuer and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under
the Exchange Act; and
(iii) take such actions as may be necessary or appropriate
under the blue sky laws of the various states.
(d) "Principal Party" means:
(i) in the case of any transaction described in clauses (i) or
(ii) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the surviving entity of such merger or
consolidation (including the Company if applicable); and
(ii) in the case of any transaction described in clause (iii)
of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case described in clauses (d)(i) or (d)(ii)
of this Section 13: (x) if the Common Shares of such Person are not at such time
and have not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a
-39-
direct or indirect Subsidiary of another Person the Common Shares of which are
and have been so registered, "Principal Party" shall refer to such other Person;
(y) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares 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 Common Shares having the greatest aggregate market value; and (z) in
case such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (x) and (y) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such Person
were a "Subsidiary" of both 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.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there may be paid to the
registered holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole Right. For
the purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, if 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
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are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if
on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the
Board of Directors. If on any such date no such market maker is making
a market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of
one one-hundredth of a Preferred Share) upon exercise of the Rights or
to distribute certificates which evidence fractional Preferred Shares
(other than fractions which are integral multiples of one one-hundredth
of a Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant
to an appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that the
holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as Beneficial
Owners of the Preferred Shares represented by such depositary receipts.
In lieu of fractional Preferred Shares that are not integral multiples
of one one-hundredth of a Preferred Share, the Company may pay to the
registered holders of Right Certificates at the time such Rights are
-41-
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For
purposes of this Section 14(b), the current market value of a Preferred
Share shall be the closing price of a Preferred Share (as determined
pursuant to Section 11(d) 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 Common Shares upon
exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the
Company may pay the registered holders of Right Certificates at the
time such Rights are exercised as provided herein an amount in cash
equal to the same fraction of the current market value of one Common
Share. For purposes of this Section 14(c), the current market value of
one Common Share shall be the closing price of one Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common
-42-
Shares), without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, and may
otherwise act in respect of, his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights
-43-
Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use
its best efforts to have any such injunction, order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 of this Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
-44-
Section 18. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust or
stock transfer powers business of the Rights Agent or any
-45-
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. If at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization
-46-
and protection to the Rights Agent as to any action taken or omitted by
it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
President, a Vice-President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall
be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any changes in the exercisability of the Rights
-47-
(including the Rights becoming void pursuant to Section 11(a)(iii) of
this Agreement) or any adjustments in the terms of the Rights
(including the manner, method or amount thereof) provided for in
Sections 3, 11, 13, 23 or 24 of this Agreement or the ascertaining of
the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of
any Preferred Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares will, when
issued, be validly authorized and issued, fully paid and
non-assessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President, a
Vice President, the Secretary or the Treasurer of the Company, and to
apply to such officers for advice or instructions in connection with
its duties, and it shall not be liable for any action taken or suffered
to be taken by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those
instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely
as though it
-48-
were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response
to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and to
the registered holders of the Right Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares or Preferred Shares
by registered or certified mail, and to the registered holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
-49-
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be either (a) a corporation organized and doing business under the laws of
the United States or of the State of New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York), in good standing, having an
office in the State of New York, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect
-50-
the legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by the Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors may, at its option, at any time
prior to such time as any Person becomes an Acquiring Person, redeem
all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, 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 cash, Common Shares (based on the current per share market
price of the Common Shares at the time of redemption) or any other form
of consideration deemed appropriate by the Board of Directors. The
redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
(b) Subject to the last sentence of Section 23(a) of this
Agreement, immediately upon the action of the Board of Directors
ordering the redemption of the Rights pursuant to Section 23(a) (or at
such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and
without any notice, the
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right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption.
Within 10 days after the action of the Board of Directors ordering the
redemption of the Rights or the effectiveness of the redemption of the
Rights pursuant to Section 23(a), as the case may be, the Company shall
mail a notice of such redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Shares. 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. Except in connection with the purchase
of Common Shares prior to the Distribution Date, neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 of this
Agreement.
Section 24. Exchange.
(a) The Board of Directors may, at its option, at any time
after the occurrence of a Triggering Event, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a)(iii)
of this Agreement) for Common Shares at an exchange ratio equal to the
greater of (i) one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement, or (ii) a number of Common
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Shares per Right equal to the result obtained by (x) multiplying the
then-current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable and dividing that
product by (y) the then-current per share market price of the Company's
Common Shares (determined pursuant to Section 11(d) of this Agreement)
(such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person
(other an Exempt Person) together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to Section 24(a) 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 Common Shares
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 Shares for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have
become void
-53-
pursuant to the provisions of Section 11(a)(iii) of this Agreement)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Shares (or equivalent
preference shares, as such term is defined in Section 11(b) hereof) for
Common Shares exchangeable for Rights, at the initial rate of one
one-hundredth of a Preferred Share (or equivalent preference share) for
each Common Share, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in lieu of
each Common Share shall have the same voting rights as one Common
Share.
(d) If there shall not be sufficient Common Shares or
Preferred Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be
necessary to authorize additional Common Shares or Preferred Shares for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional
Common Shares upon any exchange of Rights. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole
Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) of this
Agreement) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
-54-
Section 25. Notice of Certain Events.
(a) If the Company shall propose (i) to declare any dividend
payable in stock of any class to the holders of its Preferred Shares or
to make any other distribution to the holders of its Preferred Shares
(other than a regular cash dividend), (ii) to offer to the holders of
its Preferred Shares rights or warrants to subscribe for or to purchase
any additional Preferred Shares or shares of any class or any other
securities, rights or options, (iii) to effect any reclassification of
its Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to, any other Person, (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares), then, in each such case, the Company shall give to each holder
of a Right Certificate, in accordance with Section 26 of this
Agreement, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by
the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior
to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the
-55-
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 Common Shares and/or Preferred Shares, whichever
shall be the earlier.
(b) If any of the events set forth in Section 11(a)(ii) or
Section 13(a) of this Agreement shall occur, then, in any such case,
the Company shall as soon as practicable thereafter give to each holder
of a Right Certificate, in accordance with Section 26 of this
Agreement, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) or Section 13(a) of this Agreement.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Harvard Industries, Inc.
0 Xxxxxx Xxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 of this Agreement, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
State Street Bank and Trust Company
c/o Equiserve Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
-56-
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments.
(a) The Company may from time to time supplement or amend this
Agreement without the approval of the Rights Agent or any holders of
Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions with respect to the Rights which the Company may deem
necessary or desirable; provided, however, (i) that no such amendment
or supplement shall be effected without the written consent of the
Rights Agent if it would adversely affect any right or create any
additional obligation of the Rights Agent under this Agreement and (ii)
that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended (A) so as to make the
Rights redeemable if the Rights are not then redeemable in accordance
with Section 23(a) of this Agreement or (b) in any manner which would
adversely affect the interests of the holders of Rights (other than
holders of Rights which have become void pursuant to Section 11(a)(iii)
of this Agreement).
(b) To effect any amendment or supplement pursuant to this
Section 27, the Company shall deliver to the Rights Agent a copy,
certified by the Secretary or any Assistant Secretary of the Company,
of resolutions of the Board of Directors adopting such amendment or
supplement. Upon such delivery, the amendment or supplement shall be
deemed effective
-57-
and shall be administered by the Rights Agent as part of this Agreement
in accordance with its terms.
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 of Directors. The
Board of Directors shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors, or 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 a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purpose of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of Directors in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other interested
parties, and (y) not subject the Board of Directors to any liability to the
holders of the Right Certificates.
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 Right Certificates (and, prior to the Distribution
Date, the Common Shares) (and, after the Distribution Date, also the holders of
(i) securities of the Company or any of its Subsidiaries convertible into Common
Shares and (ii) any options, warrants or other rights to purchase Common Shares,
which convertible securities, options, warrants or other rights were outstanding
-58-
on the Distribution Date) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) (and,
after the Distribution Date, also any holder of any such convertible securities,
options, warrants or other rights).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
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.
[This space intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first written above.
HARVARD INDUSTRIES, INC.
Attest:
By /s/ D. Xxxxx Xxxxxx By /s/ Xxxxx X. Xxxxxxxx
---------------------------- --------------------------------
Name: D. Xxxxx Xxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Secretary Title: Chairman of the Board and
Chief Executive Officer
STATE STREET BANK AND TRUST
COMPANY
Attest:
By /s/ Xxxxxxx Xxxxxxxxx By /s/ Xxxxxxxxx Xxxxxxxx
---------------------------- --------------------------------
Name: Xxxxxxx Xxxxxxxxx Name: Xxxxxxxxx Xxxxxxxx
Title: Account Manager Title: Administration Manager
-60-
Exhibit A
FORM
OF
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
HARVARD INDUSTRIES, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-----------------------------
Harvard Industries, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (hereinafter called the
"Company"), hereby certifies that the following resolution was adopted by the
Board of Directors of the Company as required by Section 151 of the General
Corporation Law at a meeting duly called and held on March 24, 1999:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of the Company (hereinafter called the "Board of Directors"
or the "Board") in accordance with the provisions of the Certificate of
Incorporation of the Company, as amended to date (hereinafter called the
"Certificate of Incorporation"), the Board of Directors hereby creates a series
of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), of the
Company and hereby states the designation and number of shares, and fixes the
relative rights, preferences, and limitations thereof as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 1,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Company convertible
into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock, par value $0.01 per share (the "Preferred
Stock"), of the Company or Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred Stock with respect
to dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of Common Stock, par value $0.01 per share
(the "Common Stock"), of the Company, and of any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1 or (b) subject to
the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Preferred
Stock. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this
Section 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 $1 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
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
-2-
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 A
Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Company. In the event the Company shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into
a greater or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of Series
A Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designation creating a series of Preferred Stock or
Preferred Stock or any similar stock, or by law, the holders of shares
of Series A Preferred Stock and the holders of shares of Common Stock
and any other capital stock of the Company having general voting rights
shall vote together as one class on all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A 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.
-3-
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Company ranking junior (as to dividends and upon dissolution,
liquidation and winding up) to the Series A Preferred Stock;
or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
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.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and
in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company 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
-4-
Preferred Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designation creating a series of Preferred Stock or Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (A) to holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the aggregate
amount to be distributed per share to holders of shares of Common Stock, or (B)
to the holders of shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Company shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the proviso in clause (A) 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.
Section 7. Consolidation, Merger, etc. In case the Company 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 each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Company shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A 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.
-5-
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all other
series of Preferred Stock or class of Preferred Stock.
Section 10. Amendment. If any proposed amendment to the Certificate of
Incorporation would alter or change the preferences, special rights or powers
given to the Series A Preferred Stock so as to affect the Series A Preferred
Stock adversely, or would authorize the issuance of a class or classes of stock
having preferences or rights with respect to dividends or dissolutions or the
distribution of assets that would be superior to the preferences or rights of
the Series A Preferred Stock, then the holders of the Series A Preferred Stock
shall be entitled to vote as a series upon such amendment, and the affirmative
vote of two-thirds of the outstanding shares of Series A Preferred Stock shall
be necessary to the adoption thereof, in addition to such other vote as may be
required by the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Company by its Chairman of the Board of Directors and attested by
its Secretary this 24th day of March, 1999.
___________________________________
Chairman of the Board of Directors
Attest:
________________________
Secretary
-6-
Exhibit B
[Form of Right Certificate]
Certificate No. R- ____ Rights
NOT EXERCISABLE AFTER MARCH 24, 2009 OR EARLIER IF REDEEMED OR
EXCHANGED IN ACCORDANCE WITH THE RIGHTS AGREEMENT. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS HELD BY
A PERSON WHO IS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
AND CERTAIN TRANSFEREES THEREOF, WHETHER CURRENTLY HELD BY OR ON BEHALF
OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
Right Certificate
HARVARD INDUSTRIES, INC.
This certifies that _______, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement
dated as of March 24, 1999 (the "Rights Agreement") between Harvard Industries,
Inc., a Delaware corporation (the "Company"), and State Street Bank and Trust
Company, a Massachusetts trust company (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement), and prior to 5:00 p.m., Eastern time, on March 24, 2009
at the office or agency of the Rights Agent designated for such purpose, or of
its successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $0.01 per
share (a "Preferred Share"), of the Company, at a purchase price of $30.00 per
one one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of March 24, 1999, based on the
Preferred Shares as constituted at such date, and are subject to adjustment as
provided in the Rights Agreement.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredths of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, as the same may be amended from time to
time, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Right Certificates. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the above-mentioned
office or agency of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or agency of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Right Certificate (i) may be redeemed by the Company at its option at a
redemption price of $0.01 per Right, (ii) entitle the holder to purchase the
number of Common Shares and/or, under certain circumstances, the number of
Preferred Shares, cash, other property or other securities with a value of twice
the exercise price, or (iii) may be exchanged, in whole or in part, by the
Company at its option for the number of Preferred Shares, Common Shares or other
securities with a market value equal to 50% of fair market value.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
-2-
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ____________, _____.
ATTEST: HARVARD INDUSTRIES, INC.
________________________________ By ______________________________
Secretary Title:
Countersigned:
STATE STREET BANK AND TRUST COMPANY,
as Rights Agent
By ____________________________________
Authorized Signature
-3-
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the Right Certificate.)
To HARVARD INDUSTRIES, INC.:
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights (or such other securities of the Company or of
any other Person which may be issuable upon exercise of the Rights) and requests
that certificates for such securities be issued in the name of:
Please insert Social Security
or other identifying number
_________________________________________________________
(Please print name and address)
_________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert Social Security
or other identifying number
_________________________________________________________
(Please print name and address)
_________________________________________________________
Dated: ___________________, _____
__________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Act of 1934.)
-2-
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are/ [ ] are not
being exercised by or on behalf of a person who is, was or became an Acquiring
Person or an Affiliate or Associate thereof (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 Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate thereof.
__________________________________
Signature
Signature Guaranteed:
(Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Act of 1934.)
-3-
[Form of Reverse Side of Right Certificate--continued]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Right
Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and transfers
unto
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________ Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ___________________, _____
__________________________________
Signature
Signature Guaranteed:
(Signature must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office in the United
States of America.)
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is/ [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is, was or became an Acquiring
Person or an Affiliate or Associate thereof (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 purchase or otherwise acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate thereof.
__________________________________
Signature
-4-
Signature Guaranteed:
(Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Act of 1934.)
NOTICE
Each signature to the foregoing Form of Assignment, the Form of
Election to Purchase, and the related Certificates, as the case may be, must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
If the Certificate set forth above in the Form of Assignment or the
Form of Election to Purchase, as the case may be, is not completed and signed,
the Company and the Rights Agent will deem the Rights evidenced by this Right
Certificate to be void as provided in Section 11(a)(iii) of the Rights Agreement
and such Form of Assignment or Form of Election to Purchase will not be honored.
-5-
Exhibit C
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
HELD BY A PERSON WHO IS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE
OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF, WHETHER CURRENTLY HELD BY
OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME
NULL AND VOID.
HARVARD INDUSTRIES, INC.
SUMMARY OF STOCKHOLDER RIGHTS AGREEMENT
Background. On March 24, 1999, the Board of Directors of Harvard
Industries, Inc., a Delaware corporation (the "Company"), declared a dividend of
one preferred share purchase right ("Right") on each outstanding share of the
Company's common stock, par value $0.01 per share (the "Common Shares"), payable
to stockholders of record at the close of business on April 5, 1999 (the "Record
Date"). Except as described below, each Right, when exercisable, entitles the
holder thereof to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Shares, par value $0.01 per share (the
"Preferred Shares"), of the Company at an exercise price of $0.01 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and State Street Bank and Trust Company,
a Massachusetts trust company, as Rights Agent.
Distribution Date. Until the earlier to occur of (i) 10 days following
a public announcement that a person or group has become an "Acquiring Person"
(as defined below) or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group (other than certain
exempt persons) becoming an Acquiring Person (the earlier of such dates being
called the "Distribution Date"), the Rights will be evidenced by Common Share
certificates.
Acquiring Person. An "Acquiring Person" is a person or group of
affiliated or associated persons who have acquired beneficial ownership of 20%
or more of the outstanding Common Shares, other than the Company, any subsidiary
of the Company, or any employee benefit plan of the Company or its subsidiaries
("Exempt Persons"). Notwithstanding the foregoing, (i) no person will become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of the Company's Common Shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 20% or more of the Common Shares then outstanding, provided,
however, that if a person becomes the
beneficial owner of 20% or more of the Company's Common Shares then outstanding
by reason of share acquisitions by the Company and, after such share
acquisitions by the Company, (A) acquires beneficial ownership of any additional
Common Shares and (B) beneficially owns after such acquisition 20% or more of
the aggregate number of Common Shares of the Company then outstanding, then such
Person will be deemed to be an "Acquiring Person"; (ii) certain of the Franklin
Funds and their affiliates and associates ("Franklin"), who currently own more
than 20% of the outstanding Common Shares, will not be deemed to be an
"Acquiring Person" unless they acquire beneficial ownership of additional Common
Shares and thereafter beneficially own 27.5% or more of the outstanding Common
Shares, except that they may beneficially own more Common Shares than at the
date of the Rights Agreement only if they grant an irrevocable proxy to the
Chief Executive Officer of the Company with respect to all such additional
Common Shares (which proxy provides that the Common Shares subject to it must be
voted in each case in the same manner and in the same proportions as all Common
Shares of the Company not owned by Franklin); (iii) a person (other than
Franklin) who becomes a beneficial owner of 20% or more of the outstanding
Common Shares upon acquiring in a single transaction Common Shares previously
beneficially owned by Franklin will not be deemed to be an "Acquiring Person,"
so long as such person immediately after such transaction does not beneficially
own more Common Shares than its transferee beneficially owned immediately prior
to such transaction, and so long as such person does not then or thereafter
beneficially own more than the lesser of (x) 2,512,769 Common Shares (the number
of Common Shares beneficially owned by Franklin at the date of the Rights
Agreement), or (y) the number of Common Shares of the Company beneficially owned
by such person immediately following such transaction (such person must also
give timely notice of such transaction to the Company); (iv) certain of the
Contrarian Funds and their affiliates and associates ("Contrarian"), who
currently own more than 20% of the outstanding Common Shares, will not be deemed
to be an "Acquiring Person" unless they acquire beneficial ownership of
additional Common Shares and thereafter beneficially own 30% or more of the
outstanding Common Shares, except that they may beneficially own more Common
Shares than at the date of the Rights Agreement only if they grant an
irrevocable proxy to the Chief Executive Officer of the Company with respect to
all such additional Common Shares (which proxy provides that the Common Shares
subject to it must be voted in each case in the same manner and in the same
proportions as all Common Shares of the Company not owned by Contrarian); (v) a
person (other than Contrarian) who becomes a beneficial owner of 20% or more of
the outstanding Common Shares upon acquiring in a single transaction Common
Shares previously beneficially owned by Contrarian will not be deemed to be an
"Acquiring Person," so long as such person immediately after such transaction
does not beneficially own more Common Shares than its transferee beneficially
owned immediately prior to such transaction, and so long as such person does not
then or thereafter beneficially own more than the lesser of (x) 2,859,529 Common
Shares (the number of Common Shares beneficially owned by Contrarian at the date
of the Rights Agreement), or (y) the number of Common Shares of the Company
beneficially owned by such person immediately following such transaction (such
person must also give timely notice of such transaction to the Company); and
(vi) if the Board of Directors of the Company determines in good faith that a
person who would otherwise be an Acquiring Person has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an Acquiring Person, then such
Person shall not be deemed to be an "Acquiring Person." The exception from the
definition
-2-
of "Acquiring Person" for any person described in clauses (ii) through (v) of
this paragraph will terminate when such person no longer owns 20% or more of the
Company's outstanding Common Shares.
Trading of Rights. The Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
Exercisability. The Rights are not exercisable until the Distribution
Date. The Rights will expire on March 24, 2009 (the "Final Expiration Date"),
unless the Rights are earlier redeemed or exchanged by the Company, as described
below.
Exercise Price. The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then-current market price of the Preferred Shares or (iii) upon
the distribution to holders of the Preferred Shares of evidences of
indebtedness, assets or capital stock (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those referred to
above). With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. The Company will not be required to issue fractional Common
Shares or Preferred Shares (other than fractions which are integral multiples of
one one-hundredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment
in cash may be made based on the market price of the Common Shares or Preferred
Shares on the last trading day prior to the date of exercise.
Preferred Shares. Because of the nature of the Preferred Shares'
dividend, liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share. Preferred Shares purchasable upon
exercise of the Rights will not be redeemable. Each Preferred Share will be
entitled to the greater of (1) a preferential quarterly dividend payment of
$1.00 per share, or (2) an aggregate dividend of 100 times the dividend declared
per Common Share. In the event of liquidation, the holders of the Preferred
Shares will be entitled to a preferential liquidation payment of $100 per share,
plus an amount equal to 100 times the aggregate amount to be distributed per
-3-
share of common stock of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares
except as otherwise required by law. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the amount received per
Common Share. These rights are protected by customary antidilution provisions.
Flip-In. If any person or group becomes an Acquiring Person, then each
holder of a Right (other than Rights beneficially owned by the Acquiring Person,
any Associate or Affiliate thereof (as such terms are defined in the Rights
Agreement), and certain transferees thereof, which will be void) will have the
right to receive upon exercise of such Right that number of Common Shares (or,
in certain circumstances, cash, property or other securities of the Company)
having a market value of two times the exercise price of the Right.
Flip-Over. If at any time after the time that any person or group
becomes an Acquiring Person, the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold, proper provision will be made so that each holder of a
Right (other than Rights beneficially owned by the Acquiring Person, any
Associate or Affiliate thereof, and certain transferees thereof, which will be
void) will thereafter have the right to receive, upon the exercise thereof at
the then-current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
Exchange of Rights. At any time after the time that any person or group
becomes an Acquiring Person and prior to the acquisition by such person or group
of 50% or more of the outstanding Common Shares, the Board of Directors of the
Company may exchange the Rights (other than Rights beneficially owned by such
person or group, any Associate or Affiliate thereof, and certain transferees
thereof, which will be void), in whole or in part, at an exchange ratio equal to
the greater of (i) of one Common Share per Right (subject to adjustment) or (ii)
that number of Common Shares per Right having a market value at the time of such
transaction equal to the exercise price of the Right.
Redemption of Rights. At any time prior to the time that any person
becomes an Acquiring Person, the Board of Directors of the Company may redeem
the Rights in whole, but not in part, at a price of $0.01 per Right, subject to
adjustment (the "Redemption Price"), which may (at the option of the Company) be
paid in cash, Common Shares or other consideration deemed appropriate by the
Board of Directors. The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish; provided, however, that no redemption will be
permitted or required after the time that any person becomes an Acquiring
Person. Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of the Rights will be to
receive the Redemption Price.
Amendment. The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of the Rights,
except that from and after such time as any person becomes an Acquiring Person
no such amendment may make the Rights redeemable if
-4-
the Rights are not then redeemable in accordance with the terms of the Rights
Agreement or may adversely affect the interests of the holders of the Rights.
No Rights as Stockholder. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
Rights Agreement Governs. This Summary is subject to all of the terms,
provisions and conditions of the Rights Agreement, as the same may be amended
from time to time, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. A copy of
the Rights Agreement has been filed with the Securities and Exchange Commission
as an exhibit to a Registration Statement on Form 8-A dated March 24, 1999.
Copies of the Rights Agreement are also on file at the principal executive
offices of the Company and the principal office of the Rights Agent.
-5-
Exhibit D
HARVARD INDUSTRIES, INC.
FORM OF IRREVOCABLE PROXY
The undersigned hereby irrevocably appoints Xxxxx X. Xxxxxxxx, or such other
person as may at the applicable time after the date hereof be serving as the
Chief Executive Officer of Harvard Industries, Inc., a Delaware corporation (the
"Company"), with full power of substitution, as its proxy, to vote all shares of
Common Stock, par value $0.01 per share, of the Company ("Common Shares") which
the undersigned is or may hereafter be entitled to vote at any annual or special
meeting of stockholders of the Corporation held on or after the date hereof, and
at any adjournments thereof, for the election or removal of directors of the
Company and upon all other matters that may be brought before such meeting, and
to consent upon any matter (including, without limitation, the election or
removal of directors of the Company) as to which the written consent of
stockholders of the Company may now or hereafter be proposed in lieu of action
to be taken at a meeting of such stockholders. Notwithstanding the foregoing,
this irrevocable proxy shall apply to all Common Shares owned of record or
beneficially by the undersigned, but only to the extent that, on the record date
for any such proposed action by vote, or on the date of any such proposed action
by written consent, the aggregate number of Common Shares owned of record or
beneficially by the undersigned and its Affiliates and Associates shall exceed
______.* For such purposes, the terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations of the Securities and Exchange Commission promulgated under the
Securities Exchange Act of 1934, as in effect on the date hereof.
Notwithstanding the foregoing, (i) at any annual or special meeting of
shareholders of the Company, the holder of this proxy shall vote the Common
Shares subject hereto with respect to the election of directors and in favor of,
and/or in opposition to, each resolution or proposed action in the same manner
and in the same proportions as all outstanding Common Shares of the Company
present and voting at such meeting (other than those beneficially owned by the
undersigned and its Affiliates and Associates) shall be voted with respect to
the corresponding resolution or action, and (ii) with respect to any resolution
or action with respect to which a written consent of stockholders of the Company
is proposed (including, without limitation, the election or removal of directors
of the Company), the holder of this proxy shall grant or withhold such consent
with respect to the Common Shares subject to this proxy in the same manner and
in the same proportions as shall be the case with respect to all outstanding
Common Shares of the Company (other than those beneficially owned by the
undersigned and its Affiliates and Associates).
Pursuant to Section 212(e) of the Delaware General Corporation Law, as amended,
this proxy is irrevocable and is coupled with an interest sufficient in law to
support an irrevocable power. It shall become effective on the date hereof and
shall expire at the close of business on March 24, 2009.
Dated: ___________________, _____
__________________________________
Signature
----------
* If this proxy is given by Contrarian (as defined in the Rights Agreement
dated as of March 24, 1999 between the Company and State Street Bank and
Trust Company), insert the number 2,859,529; if given by Franklin (as
defined therein), insert the number 2,512,769.
