AMENDED AND RESTATED
RIGHTS AGREEMENT
This Amended and Restated Rights Agreement, dated as of
November 15, 1996, between Dover Corporation, a Delaware
corporation (the "COMPANY"), and Xxxxxx Trust Company of New York
(the "RIGHTS AGENT").
W I T N E S S E T H
WHEREAS, on November 5, 1987, the Board of Directors of
the Company entered into a Rights Agreement (the "Initial Rights
Agreement") with the Rights Agent and authorized and declared a
dividend distribution of one right for each share of Common
Stock, $1.00 par value per share, of the Company (the "Common
Stock") outstanding on November 23, 1987 (the "Record Date"),
which provided for the issuance of one right (subject to
adjustment as provided herein) for each share of Common Stock of
the Company issued between the Record Date and the earliest of
the Distribution Date and the Expiration Date (as such terms are
hereinafter defined), each right representing the right to
purchase one one-thousandth of a share of Preferred Stock (as
hereinafter defined);
WHEREAS, as a result of two 2 for 1 Common Stock splits
which occurred subsequent to November 5, 1987, and pursuant to
Section 11(n) of the Initial Rights Agreement, each outstanding
share of Common Stock has associated with it one quarter of a
right to buy one one-thousandth of a share of Preferred Stock;
WHEREAS, as a result of the antidilution provisions of
the Certificate of Designation, Preferences and Rights of Series
A Junior Participating Preferred Stock, each one one-thousandth
of a share of Preferred Stock now represents the same economic
value as four shares of Common Stock;
WHEREAS, for simplification purposes, the Board of
Directors has deemed it appropriate to recharacterize each
outstanding one quarter of a right to purchase one one-thousandth
of a share of Preferred Stock as one right to purchase one
four-thousandth of a share of Preferred Stock (the "Rights").
WHEREAS, the Board of Directors has determined that
certain further amendments and modifications to the Initial
Rights Agreement are in the best interests of the Company and its
stockholders;
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereto hereby
agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms
have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and Associates
(as such term is hereinafter defined) of such Person, without the
prior approval of the Company, shall be the Beneficial Owner (as
such term is hereinafter defined) of securities representing 15%
or more of the shares of Common Stock then outstanding or who was
such a Beneficial Owner at any time after the date hereof,
whether or not such Person continues to be the Beneficial Owner
of securities representing 15% or more of the outstanding shares
of Common Stock, but shall not include (i) the Company, (ii) any
subsidiary of the Company (as such term is hereinafter defined),
(iii) any employee benefit plan of the Company or any of its
subsidiaries or (iv) any entity holding securities of the Company
organized, appointed or established by the Company or any of its
subsidiaries for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an
Acquiring Person (i) as a result of the acquisition of shares of
Common Stock by the Company which, by reducing the number of
shares of Common Stock outstanding, increases the proportional
number of shares beneficially owned by such Person together with
all Affiliates and Associates of such Person, PROVIDED, that if
(A) a Person would become an Acquiring Person (but for operation
of this clause (i)) as a result of the acquisition of Common
Shares by the Company, and (B) after such share acquisition by
the Company, such Person, or an Affiliate or Associate of such
Person, becomes the Beneficial Owner of any additional shares of
Common Stock, then such Person shall be deemed an Acquiring
Person, or (ii) if (A) within five Business Days after such
Person would otherwise have become or, if such Person did so
inadvertently, after such Person discovers that such Person would
otherwise have become, an Acquiring Person (but for operation of
this clause (ii)), such Person notifies the Board that such
Person did so inadvertently, and (B) within two Business Days
after such notification (or such greater period of time as may be
determined by the Board, but in no event greater than five
Business Days), such Person divests itself of a sufficient number
of shares of Common Stock so that such Person, together with all
Affiliates and Associates of such Person, would not be the
Beneficial Owner of 15% or more of the Company's outstanding
shares of Common Stock.
(b) "AFFILIATE" and "ASSOCIATE" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), as in effect on the
date 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 or
obligation to acquire (whether such right or obligation
is exercisable or effective immediately or only after
the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights,
exchange rights, rights (other than these 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
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); PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this
clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely
from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
of the Exchange Act and (2) is not also then reportable
by such person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of
such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not
in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of this
paragraph (c)) or disposing of any securities of the
company.
(d) "BUSINESS DAY" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(e) "CLOSE OF BUSINESS" on any given date shall mean
5:00 P.M., New York City time, on such date; PROVIDED, HOWEVER,
that if such date is not a Business Day it shall mean 5:00 P.M.,
New York City time, on the next succeeding Business Day.
(f) "COMMON STOCK" shall mean the Common Stock, $1.00
par value, of the Company, except that "Common Stock" when used
with reference to stock issued by any Person other than the
Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interest having
power to control or direct the management, of such Person or, if
such Person is a subsidiary of another Person, of the Person
which ultimately controls such first-mentioned Person and which
has issued and outstanding such capital stock, equity securities
or equity interests.
(g) "PERSON" shall mean any individual, firm,
corporation, partnership or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(h) "RIGHT" shall mean a right to purchase one four-
thousandth of a share of Preferred Stock.
(i) "PREFERRED STOCK" shall mean the Series A Junior
Participating Preferred Stock, $100.00 par value, of the Company
having the rights, powers and preferences set forth in the form
of Certificate of Designation attached hereto as Exhibit A, upon
the terms and subject to the conditions hereinafter set forth.
(j) "STOCK ACQUISITION DATE" shall mean the first date
of public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such.
(k) A "SUBSIDIARY" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or voting interests is
owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
(l) "VOTING POWER" shall mean the voting power of all
securities of the Company then outstanding generally entitled to
vote for the election of directors of the Company.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-
Rights Agents as it may deem necessary or desirable. In the
event the Company appoints one or more Co-Rights Agents, the
respective duties of the Rights Agents and any Co-Rights Agents
shall be as the Company shall determine.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Stock Acquisition
Date or (ii) the tenth day (or such later date as may be
determined by action of the Board) after the date of the
commencement of, or first public announcement of the intent of
any Person (other than the Company, any subsidiary of the
Company, or any employee benefit plan of the Company or any of
its subsidiaries) to commence (which intention to commence
remains in effect for five business days after such
announcement), a tender or exchange offer which would result in
such Person becoming an Acquiring Person (including any such date
which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being herein
referred to as the "DISTRIBUTION DATE"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this
Section 3) by the certificates for Common Stock registered in the
names of the holders of the Common Stock (which certificates for
Common Stock shall be deemed also to be certificates for Rights)
and not by separate certificates, and (y) the Rights (and the
right to receive certificates therefor) will be transferable only
in connection with the transfer of the underlying shares of
Common Stock. As soon as practicable after the Distribution
Date, the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the
close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a certificate
for Rights, in substantially the form of Exhibit B hereto (the
"RIGHTS CERTIFICATES"), evidencing one Right for each share of
Common Stock so held. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
As soon as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially
the form attached hereto as Exhibit C (the "SUMMARY OF RIGHTS"),
by first-class, postage prepaid mail, to each record holder of
the Common Stock as of the close of business on the Record Date,
at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date
(or earlier redemption, expiration or termination of the Rights),
the Rights will be evidenced by such certificates for the Common
Stock together with the Summary of Rights and the registered
holders of the Common Stock shall also be the registered holders
of the associated Rights. Until the Distribution Date (or
earlier redemption, expiration or termination of the Rights), the
surrender for transfer of any of the certificates for the Common
Stock outstanding on the Record Date, even without a copy of the
Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificate.
(b) Certificates issued for Common Stock (including,
without limitation, certificates issued upon transfer or exchange
of Common Stock) after the Record Date, but prior to the earlier
of the Distribution Date or the Expiration Date (as such term is
hereinafter defined), shall be deemed also to be certificates for
Rights, and shall have impressed, printed, stamped, written or
otherwise affixed onto them the following legend:
This certificate also evidences and
entitles the holder hereof to certain Rights
as set forth in an Amended and Restated
Rights Agreement between Dover Corporation
and Xxxxxx Trust Company of New York (the
"Amended and Restated Rights Agent") dated as
of November 15, 1996 (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy
of which is on file at the principal offices
of Dover Corporation. Under certain
circumstances, as set forth in the Amended
and Restated Rights Agreement, such Rights
may be redeemed, may expire, or may be
evidenced by separate certificates and will
no longer be evidenced by this certificate.
Dover Corporation will mail to the holder of
this certificate a copy of the Rights
Agreement without charge within five days
after receipt of a written request therefor.
Under certain circumstances, Rights issued to
Acquiring Persons (as defined in the Amended
and Restated Rights Agreement) or certain
related persons and any subsequent holder of
such Rights may become null and void with
respect to certain rights set forth in
Section 11(a)(ii) and Section 13(a) of the
Amended and Restated Rights Agreement.
With respect to such certificates containing the
foregoing legend, until the Distribution Date, the Rights
associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election
to purchase shares and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions of
Section 11 and Section 23 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date, and
on their face shall entitle the holders thereof to purchase such
number of one four-thousandths of a share of Preferred Stock as
shall be set forth therein at the price per one four-thousandth
of a share set forth therein (the "PURCHASE PRICE"), but the
fraction of a share of Preferred Stock so purchasable upon the
exercise of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) hereof that represents Rights beneficially owned by an
Acquiring Person or any Associate or Affiliate thereof and any
Rights Certificate issued at any time upon the transfer of any
Rights to such an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or
Affiliate, and any Rights Certificate issued pursuant to Section
6 or Section 11 upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain the following legend:
The Rights represented by this Rights
Certificate were issued to a Person who was
an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person. This
Rights Certificate and the Rights represented
hereby may become void to the extent provided
by, and under certain circumstances as
specified in, Section 7(e) of the Amended and
Restated Rights Agreement.
The provisions of Section 7(e) of this Rights Agreement
shall be operative whether or not the foregoing legend is
contained on any such Rights Certificate.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, any Vice Chairman of the
Board, any President or any Vice President, either manually or
by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates
shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the
Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates
had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign
such Rights Certificate, although at the date of the execution
of this Rights Agreement any such person was not such an
officer.
Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at one of its offices in New York, New
York, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND
EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN
RIGHTS CERTIFICATES.
Subject to the provisions of Section 15 hereof, at any
time after the close of business on the Distribution Date, and at
or prior to the close of business on the Expiration Date (as
defined below), any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of shares of Preferred Stock as
the Rights Certificate or Rights Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Rights Certificate
shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates
to be transferred, split up, combined or exchanged at the
principal office of the Rights Agent. Thereupon the Rights Agent
shall countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as
so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any Rights 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 presentation of the Rights Certificate,
with the appropriate form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the Purchase
Price for each one four-thousandth of a share of Preferred Stock
(or such other number of shares or other securities) as to which
the Rights are exercised, at or prior to the earlier of (i) the
close of business on November 7, 2006 (the "FINAL EXPIRATION
DATE"), or (ii) the time at which the Rights are redeemed as
provided in Section 24 hereof (such earlier time being herein
referred to as the "EXPIRATION DATE"). Notwithstanding any other
provision of this Agreement, any Person who prior to the
Distribution Date becomes a record holder of shares of Common
Stock may exercise all of the rights of a registered holder of a
Rights Certificate with respect to the Rights associated with
such shares of Common Stock in accordance with and subject to the
provisions of this Agreement, including the provisions of Section
7(e) hereof, as of the date such Person becomes a record holder
of shares of Common Stock.
(b) The Purchase Price for each one four-thousandth
share of Preferred Stock pursuant to the exercise of a Right
shall initially be $200.00, shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the appropriate form of election to
purchase duly executed, accompanied by payment of the Purchase
Price for the shares (or other securities or property) to be
purchased and an amount equal to any applicable transfer tax (as
determined by the Rights Agent) in cash, or by certified check or
bank draft payable to the order of the Company, the Rights Agent
shall, subject to Section 21(k), thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer
agent) certificates for the number of shares of Preferred Stock
to be purchased, and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if
the Company, in its sole discretion, shall have elected to
deposit the shares of Preferred Stock issuable upon exercise of
the Rights hereunder into a depositary, requisition from the
depositary agent depositary receipts representing such number of
one four-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will
direct the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of
cash, if any, to be paid in lieu of issuance of fractional shares
in accordance with Section 15, (iii) 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
Rights Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the
registered holder of such Rights Certificate. In the event that
the Company is obligated to issue other securities of the
Company, and/or distribute other property pursuant to
Section 11(a), the Company will make all arrangements necessary
so that such other securities and/or property are available for
distribution by the Rights Agent, if and when appropriate. In
addition, in the case of an exercise of the Rights by a holder
pursuant to Section 11(a)(ii), the Rights Agent shall return such
Rights Certificate to the registered holder thereof after
imprinting, stamping or otherwise indicating thereon that the
rights represented by such Rights Certificate no longer include
the rights provided by Section 11(a)(ii) of the Rights Agreement
and if less than all the Rights represented by such Rights
Certificate were so exercised, the Rights Agent shall indicate on
the Rights Certificate the number of Rights represented thereby
which continue to include the rights provided by
Section 11(a)(ii).
(d) In case the registered holder of any Rights
Certificate shall exercise (except pursuant to Section 11(a)(ii))
less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to
the registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 15
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, if an Acquiring Person or an Associate or Affiliate of
an Acquiring Person engages in or there occurs one or more of the
transactions set forth in Section 11(a)(ii) or Section 13(a) on
or after the time the Acquiring Person became such, then any
Rights that are or were on or after the earlier of the
Distribution Date or the Stock Acquisition Date beneficially
owned by an Acquiring Person or any Associate or Affiliate shall
become void with respect to the rights provided under Section
11(a)(ii) and Section 13(a) and any holder of such Rights shall
thereafter have no right to exercise such Rights under the
provisions of Section 11(a)(ii) and Section 13(a).
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless the certificate contained in the
appropriate form of election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such exercise
shall have been properly completed and duly executed by the
registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES.
All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to
the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this 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 Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED
STOCK.
The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
shares of Preferred Stock, or any authorized and issued shares
of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise
in full of all outstanding Rights and, after the occurrence of
an event specified in Section 11, shall so reserve and keep
available a sufficient number of shares of Preferred Stock
(and/or other securities) which may be required to permit the
exercise in full of the Rights pursuant to this Agreement.
So long as the shares of Preferred Stock (and, after
the occurrence of an event specified in Section 11, any other
securities) issuable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights
become exercisable, all shares (or other securities) reserved for
such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of
Preferred Stock and/or other securities delivered upon exercise
of Rights shall, at the time of delivery of the certificates for
such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares or securities.
The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Rights Certificates or of any certificates for
shares of Preferred Stock and/or other securities upon the
exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a person other
than, or in respect of the issuance or delivery of the shares of
Preferred Stock and/or other securities in a name other than that
of, the registered holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any
certificates for shares of Preferred Stock, and/or other
securities in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is
due.
The Company shall use its best efforts to (i) file, as
soon as practicable following the Distribution Date, a
registration statement under the Securities Act of 1933, as
amended (the "Act"), with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Act and the rules and regulations
thereunder) until the date of the expiration of the rights
provided by Section 11(a)(ii). The Company will also take such
action as may be appropriate under the blue sky laws of the
various states.
SECTION 10. PREFERRED STOCK RECORD DATE.
Each person in whose name any certificate for shares of
Preferred Stock (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock (or
other securities) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly presented and payment of the
Purchase Price (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such presentation and
payment is a date upon which the Preferred Stock (or other
securities) transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or other
securities) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate, as such, shall not be entitled to any rights
of a shareholder of the Company with respect to shares for which
the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except
as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE,
NUMBER AND KIND OF SHARES OR NUMBER OF
RIGHTS.
The Purchase Price, the number of shares covered by
each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares or
(D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and in Section 7(e), the Purchase
Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of
capital stock and other securities which, if such Right had been
exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, such
holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to any adjustment required
pursuant to Section 11(a)(ii).
(ii) In the event that any Person
(other than the Company, any subsidiary of the Company,
any employee benefit plan of the Company or any of its
subsidiaries or any entity holding securities of the
Company organized, appointed or established by the
Company or any of its subsidiaries for or pursuant to
the terms of any such plan), alone or together with its
Affiliates and Associates, shall become an Acquiring
Person (except pursuant to a tender or exchange offer
for all outstanding shares of Common Stock at a price
and on terms determined by at least a majority of the
members of the Board of Directors who are not officers
of the Company to be both adequate and otherwise in the
best interests of the Company and its shareholders
(other than the Person or an Affiliate or Associate
thereof on whose behalf the offer is being made)), then
proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e) hereof,
shall, for a period of 60 days after the later of the
occurrence of any such event and the effective date of
an appropriate registration statement pursuant to
Section 9, have a right to receive, upon exercise
thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of
shares of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase
Price by the then number of one four-thousandths of a
share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the
current market price per one share of Common Stock
(determined pursuant to Section 11(d)) on the date of
the occurrence of the event set forth in this
subparagraph (ii) (such number of shares being referred
to as the "number of Adjustment Shares"); PROVIDED,
HOWEVER, that if the transaction that would otherwise
give rise to the foregoing adjustment is also subject
to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that there shall not be
sufficient treasury shares or authorized but unissued
shares of Common Stock to permit the exercise in full
of the Rights in accordance with the foregoing
subparagraph (ii) and the Rights become so exercisable,
notwithstanding any other provision of this Agreement,
to the extent necessary and permitted by applicable law
and any agreements in effect on the date hereof to
which it is a party, each Right shall thereafter
represent the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with
the terms of this Agreement, a number of shares, or
units of shares, of (x) Common Stock (up to the maximum
number of shares of Common Stock which may permissibly
be issued using the allocation procedure specified in
the second sentence of Section 11(k)) and (y) preferred
stock (or other equity securities) of the Company,
including, but not limited to Preferred Stock, equal in
the aggregate to the number of Adjustment Shares where
the Board of Directors of the Company shall have deemed
such shares or units, other than the shares of Common
Stock, to have at least the same economic value as the
Common Stock (a "common stock equivalent") (one four-
thousandth of a share of Preferred Stock shall be
deemed to be a common stock equivalent); PROVIDED,
HOWEVER, if there are unavailable sufficient shares (or
fractions of shares) of Common Stock and/or common
stock equivalents, then the Company shall take all such
action as may be necessary to authorize additional
shares of Common Stock or common stock equivalents for
issuance upon exercise of the Rights, including the
calling of a meeting of shareholders; AND PROVIDED,
FURTHER, that the Company shall issue no common stock
equivalent upon exercise of the Rights until the
Company has first issued all authorized and unreserved
shares of Common Stock; AND PROVIDED, FURTHER, that if
the Company is unable to cause sufficient shares of
Common Stock and/or common stock equivalents to be
available for issuance upon exercise in full of the
Rights, then each Right shall thereafter represent the
right to receive the Adjusted Number of Common Shares
upon exercise at the Adjusted Purchase Price (as such
terms are hereinafter defined). As used herein, the
term Adjusted Number of Common Shares shall be equal to
that number of shares (or fractions of shares) of
Common Stock (and/or shares or units of common stock
equivalents) equal to the product of (x) the number of
Adjustment Shares and (y) a fraction, the numerator of
which is the number of shares of Common Stock (and/or
shares or units of common stock equivalents) available
for issuance upon exercise of the Rights and the
denominator of which is the aggregate number of
Adjustment Shares otherwise issuable upon exercise in
full of all Rights (assuming there were sufficient
shares of Common Stock available) (such fraction being
referred to as the "PRORATION FACTOR"). The Adjusted
Purchase Price shall mean the product of the Purchase
Price and the Proration Factor. The Board of Directors
may, but shall not be required to, establish procedures
to allocate the right to receive Common Stock and
common stock equivalents upon exercise of the Rights
among holders of Rights.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preferred Stock (or shares having the same or more
favorable rights, privileges and preferences as the Preferred
Stock ("EQUIVALENT PREFERRED STOCK")) or securities convertible
into Preferred Stock or equivalent preferred stock at a price per
share of Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as defined in Section 11(d))
per share of Preferred Stock on such record date, the Purchase
Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the number of shares of Preferred Stock outstanding on such
record date, plus the number of shares of Preferred Stock which
the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of
shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or
equivalent preferred stock to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription
price may be paid in a consideration part or all of which shall
be in a form other than cash, the value of such consideration
shall be determined reasonably and with good faith to the holders
of Rights by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent. Shares of
Preferred Stock owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the
making of a distribution to all holders of Preferred Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable
in Preferred Stock, but including any dividend payable in stock
other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the current market price (as defined in Section 11(d)) per share
of Preferred Stock on such record date, less the fair market
value (as determined reasonably and with good faith to the
holders of Rights by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants
distributable in respect of one share of Preferred Stock and the
denominator of which shall be the current market price per share
of the Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would be
in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder,
other than in Section 11(a)(iii), the "CURRENT MARKET PRICE" per
share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common
Stock for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED,
HOWEVER, that in the event that the current per share market
price of the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in shares
of such Common Stock or securities convertible into shares of
such Common Stock or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the
expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each
such case, the "current market price" shall be properly adjusted
to take into account ex-dividend trading. The closing price for
each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock,
the fair value of such shares on such date as determined
reasonably and with good faith by the Board of Directors of the
Company shall be used and shall be binding on the Rights Agent.
The term, "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the
fair value per share determined reasonably and with good faith to
the holders of Rights by the Board of Directors of the Company,
whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent.
(ii) For the purpose of any computation hereunder,
the "current market price" per share (or one four-thousandth of a
share) of Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the
current market price per share (or one four-thousandth of a
share) of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this
Section 11(d), the "current market price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal to 1000
(as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect
to the Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of the Common
Stock and the "current market price" per one four-thousandth of a
share of Preferred Stock shall be equal to the current market
price per share of the Common Stock (as appropriately adjusted).
If neither the Common Stock nor the Preferred Stock is publicly
held or so listed or traded, "current market price" per share
shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1%
in the Purchase Price; PROVIDED, HOWEVER, that any adjustments
which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a),
the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company
other than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect
to the shares contained in Section 11(a) through (c), inclusive,
and the provisions of Sections 7, 9, 10, 13 and 15 hereof with
respect to the Preferred Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of shares of Preferred Stock purchasable from
time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Section 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
one four-thousandths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the
number of one four-thousandths of a share of Preferred Stock
covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in substitution for any adjustment in the number of shares of
Preferred Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one four-
thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest ten-
thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 15
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value,
if any, of the shares of Preferred Stock, Common Stock or other
securities issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Preferred
Stock, Common Stock or other securities at such adjusted Purchase
Price. If upon any exercise of the Rights, a holder is to
receive a combination of Common Stock and common stock
equivalents, a portion of the consideration paid upon such
exercise, equal to at least the then par value of a share of
Common Stock of the Company, shall be allocated as the payment
for each share of Common Stock of the Company so received.
(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 the shares
of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
shares of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such holder
a due 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) Anything to the contrary in this Section 11
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 Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the current market price, issuance
wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of
Preferred Stock, stock dividends or issuance of rights, options
or warrants referred to hereinabove in this Section 11, hereafter
made by the Company to holders of its Preferred Stock shall not
be taxable to such shareholders.
(n) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the date of this Agreement and prior to the Distribution
Date (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, (iii) combine the outstanding Common
Stock into a smaller number of shares, or (iv) issue any shares
of its capital stock in a reclassification of the outstanding
Common Stock, then in any such case (A) the fractional number of
a share of Preferred Stock purchasable after such event upon
proper exercise of such Right shall be determined by multiplying
the number of one four-thousandths of shares of Preferred Stock
so purchasable immediately prior to such event by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of
which is the number of shares of Common Stock outstanding
immediately after such event (the "Fraction"), (B) all references
in this Agreement to one four-thousandth of a share of Preferred
Stock shall be deemed to refer to the fractional number of a
share of Preferred Stock resulting from the multiplication in the
preceding clause (A), and (C) each share of Common Stock
outstanding immediately after such event shall have issued with
respect to it that number of Rights which each share of Common
Stock outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section
11(n) shall be made successively whenever such a dividend is
declared or such a subdivision, combination or consolidation is
effected, and immediately after such event, the Purchase Price
with respect to each fraction of a share of Preferred Stock
purchasable upon exercise of a Right (as determined pursuant to
clause (A) and (B) above) shall equal the Purchase Price
immediately prior to such event multiplied by the Fraction.
(o) The exercise of Rights under Section 11(a)(ii)
shall only result in the loss of rights under Section 11(a)(ii)
to the extent so exercised and shall not otherwise affect the
rights represented by the Rights under this Rights Agreement,
including the rights represented by Section 13.
SECTION 12.
CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and
13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the
Rights Agent and with each transfer agent for the Preferred
Stock and the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 27 hereof. The Rights
Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER
OF ASSETS OR EARNING POWER.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person, (y) 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 (other than, in the case of either
transaction described in (x) or (y), a merger or consolidation
which would result in all of the Voting Power represented by the
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into securities of the surviving entity) all of
the Voting Power represented by the securities of the Company or
such surviving entity outstanding immediately after such merger
or consolidation and the holders of such securities not having
changed as a result of such merger or consolidation), or (z) the
Company shall sell, mortgage or otherwise transfer (or one or
more of its subsidiaries shall sell, mortgage or otherwise
transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) to any other
Person, then, and in each such case, proper provision shall be
made so that (i) following the Distribution Date, each holder of
a Right, subject to Section 7(e), shall have the right to
receive, upon the exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, such number
of shares of freely tradeable Common Stock of the Principal Party
(as hereinafter defined), free and clear of liens, rights of call
or first refusal, encumbrances or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one four-thousandths of a
share of Preferred Stock for which a Right is then exercisable
(without taking into account any adjustment previously made
pursuant to Section 11(a)(ii) hereof) and dividing that product
by (2) 50% of the current market price per share of the Common
Stock of such Principal Party (determined pursuant to Section
11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; and (iv)
such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of
its Common Stock in 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 its shares of Common
Stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
(x) or (y) of the first sentence of this Section 13,
the Person that is the issuer of any securities into
which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other
party to the merger or consolidation (including, if
applicable, the Company, if it is the surviving
corporation); and
(ii) in the case of any transaction described in
(z) of the first sentence in this Section 13, 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, (1) if the Common Stock of such
Person is not at such time and has not been
continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect subsidiary or
Affiliate of another Person, "Principal Party" shall
refer to such other Person; (2) in case such Person is
a subsidiary, directly or indirectly, or Affiliate of
more than one Person, the Common Stocks of two or more
of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest
aggregate market value; and (3) in case such Person is
owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules
set forth in (1) and (2) above shall apply to each of
the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of
both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and each Principal Party and each other Person who may
become a Principal Party as a result of such consolidation,
merger, sale or transfer shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set
forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in
paragraph (a) of this Section 13, the Principal Party at its own
expense will
(i) prepare and file a registration statement
under the Act with respect to the Rights and the
securities purchasable upon exercise of the Rights on
an appropriate form, will use its best efforts to cause
such registration statement to become effective as soon
as practicable after such filing and will use its best
efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise
of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party
and each of its Affiliates which comply in all material
respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply
to successive mergers or consolidations or sales or other
transfers. The rights under this Section 13 shall be in addition
to the rights to exercise Rights and adjustments under Section
11(a)(ii) and shall survive any exercise thereunder.
SECTION 14.
After the Stock Acquisition Date, the Company covenants and
agrees that it shall not (i) consolidate with, (ii) merge with
or into, or (iii) sell or transfer to, in one or more
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
subsidiaries taken as a whole, any other Person if at the time
of or after such consolidation, merger or sale there are any
charter or by-law provisions or any rights, warrants or other
instruments outstanding or any other action taken which would
diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. The Company shall not consummate any
such consolidation, merger or sale unless prior thereto the
Company and such other Person shall have executed and delivered
to the Rights Agent a supplemental agreement evidencing
compliance with this subsection.
(b) The Company covenants and agrees that, after the
Stock Acquisition Date, it will not, except as permitted by
Sections 24 and 26 hereof, take any action the purpose or effect
of which is to diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue
fractions of Rights, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 15(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights the fair value
of the Rights on such date as determined reasonably and with good
faith to the holders of Rights by the Board of Directors of the
Company shall be used and shall be binding on the Rights Agent.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one four-thousandth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one four-
thousandth of a share of Preferred Stock). Fractions of shares
of Preferred Stock in integral multiples of one four-thousandth
of a share of Preferred Stock 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 shares of Preferred Stock represented by
such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not integral multiples of one four-
thousandth of a share of Preferred Stock, the Company may pay to
the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one four-
thousandth of a share of Preferred Stock. For purposes of this
Section 15(b), the current market value of one four-thousandth of
a share of Preferred Stock shall be one four-thousandth of the
closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of one of the
transactions or events specified in Section 11 giving rise to the
right to receive common stock equivalents (other than Preferred
Stock) or other securities upon the exercise of a Right, the
Company shall not be required to issue fractions of shares or
units of such common stock equivalents or other securities upon
exercise of the Rights or to distribute certificates which
evidence fractional shares of such common stock equivalents or
other securities. In lieu of fractional shares or units of such
common stock equivalents or other securities, the Company may pay
to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of a share or
unit of such common stock equivalent or other securities. For
purposes of this Section 15(c), the current market value shall be
determined in the manner set forth in Section 11(d) hereof for
the Trading Day immediately prior to the date of such exercise
and, if such common stock equivalent is not traded, each such
common stock equivalent shall have the value of one four-
thousandth of a share of Preferred Stock.
(d) Except as otherwise expressly provided herein, the
holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right.
SECTION 16. RIGHTS OF ACTION.
All rights of action in respect of this Agreement are vested
in the respective registered holders of the Rights Certificates
(and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in
such Rights Certificate and in this Agreement. Without limiting
the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach
of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of
any Person subject to this Agreement. Holders of Rights shall
be entitled to recover the reasonable costs and expenses,
including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement.
SECTION 17. AGREEMENT OF RIGHTS HOLDERS.
Every holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every
other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name a Rights Certificate (or, prior to
the Distribution Date, the associated Common Stock certificate)
is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary.
SECTION 18. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER.
No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose
the holder of the shares of Preferred Stock, Common Stock or any
other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate,
as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders
(except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions thereof.
SECTION 19. 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 disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising
therefrom, directly or indirectly.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF NAME
OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22 hereof. In case
at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates
shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in
the name of the predecessor or in the name of the successor
Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates in
this Agreement.
In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
SECTION 21. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed
by this Agreement upon the following terms and conditions, by
all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by it (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person) be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of
the Board, any Vice Chairman of the Board, any President, any
Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Rights Certificates (except as to the
fact that it has countersigned the Rights Certificates) 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 Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or 13
hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after
actual notice of any such adjustment); nor shall it be
responsible for any determination by the Board of Directors of
the Company of the current market value of the Rights or
Preferred Stock or Common Stock pursuant to the provisions of
Section 15 hereof; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or
reservation of any shares of Preferred Stock or other securities
to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Preferred Stock or other
securities will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder and certificates delivered pursuant to any
provision hereof from the Chairman of the Board, any Vice
Chairman of the Board, any President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and is authorized to apply to
such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company or to the
holders of the Rights resulting from any such act, omission,
default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 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 22. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer
agent of the Common Stock and Preferred Stock by registered or
certified mail, and to holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or
any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock and
Preferred Stock by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized
and doing business under the laws of the United States or of the
State of New York (or of any other state of the United States so
long as such corporation is authorized to do business as a
banking institution in the State of New York), in good standing,
having a principal office in the State of New York, which is
authorized under such laws to exercise corporate trust 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 $50,000,000 or
(b) an affiliate of a corporation described in clause (a) of
this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock and Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 22,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may
be.
SECTION 23. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the
number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.
SECTION 24. REDEMPTION AND TERMINATION.
(a)(i) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (x) the time that
any person becomes an Acquiring Person or (y) 5:00 P.M., New York
City time, on the Final Expiration Date, redeem all but not less
than all of the then outstanding Rights at a redemption price of
$.0125 per Right, appropriately adjusted after any stock split,
stock dividend or similar transaction occurring after the date
hereof by multiplying such redemption price by the Fraction (the
"Redemption Price").
(a)(ii) In addition, the Board of Directors of the
Company may redeem all but not less than all of the then
outstanding Rights at the Redemption Price following the
occurrence of a Stock Acquisition Date but prior to any event
described in Section 13(a) either (x) in connection with any
event specified in Section 13(a) in which all holders of Common
Stock are treated alike and not involving an Acquiring Person or
an Affiliate or Associate of an Acquiring Person or any other
Person in which such Acquiring Person, Affiliate or Associate has
any interest, or any other Person acting directly or indirectly
on behalf of or in association with any such Acquiring Person,
Affiliate or Associate, or (y) following the occurrence of an
event set forth in, and the expiration of any period during which
the holder of Rights may exercise the rights under, Section
11(a)(ii) if and for as long as the Acquiring Person is not
thereafter the Beneficial Owner of securities representing 15% or
more of the outstanding shares of the Voting Power, and at the
time of redemption there are no other persons who are Acquiring
Persons.
(b) In the case of a redemption permitted under
Section 24(a)(i), immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption
Price. In the case of a redemption permitted only under Section
24(a)(ii), evidence of which shall have been filed with the
Rights Agent, the right to exercise the Rights will terminate and
represent only the right to receive the Redemption Price only
after ten Business Days following the giving of notice of such
redemption to the holders of such Rights if no event set forth in
Section 11(a)(ii) shall have occurred, and, if such event shall
have occurred, upon the later of ten Business Days following the
giving of such notice or the expiration of any period during
which the rights under Section 11(a)(ii) may be exercised.
Within ten days after the action of the Board of Directors
ordering any such redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
the Rights Agent and to all such holders at their last addresses
as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made.
The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press
release announcing the manner of redemption of the Rights and
(ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent of
the Common Stock, and upon such action, all outstanding Rights
Certificates shall be null and void without any further action by
the Company.
SECTION 25. NOTICE OF CERTAIN EVENTS.
In case the Company shall propose (a) to pay any dividend
payable in stock of any class to the holders of Preferred Stock
or to make any other distribution to the holders of Preferred
Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company) or (b) to offer to
the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or
options, or (c) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (d) to
effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its
subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets or earning
power of the Company and its subsidiaries (taken as a whole) to,
any other Person, or (e) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights Certificate, in
accordance with Section 27 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the
shares of Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered
by clause (a) or (b) above at least 20 days prior to the record
date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the shares of Preferred Stock whichever shall be the
earlier.
In case any of the events set forth in Section
11(a)(ii) of this Agreement shall occur, then, in any such case,
the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, in accordance with Section 27
hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
SECTION 26. EXCHANGE.
(a) The Board may, at its option, at any time after
the time that any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the
provisions of Sections 7(e) and 11(a)(ii) hereof) for shares of
Common Stock of the Company at an exchange ratio of one share of
Common Stock per Right (the "EXCHANGE RATIO"). Notwithstanding
the foregoing, the Board shall not be empowered to effect such
exchange at any time after any Person (other than the Company,
any subsidiary of the Company, any employee benefit plan of the
Company or any of its subsidiaries or any entity holding
securities of the Company organized, appointed or established by
the Company or any of its subsidiaries for or pursuant to the
terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or
more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering
the exchange of any Rights pursuant to Section 26(a) hereof and
without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The
Company shall promptly give notice of such exchange to the Rights
Agent and the holders of the then outstanding Rights by mailing
such notice to the Rights Agent and to all such holders at their
last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of
the shares of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Sections 7(e) and
11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 26, the
Company, at its option, may substitute Preferred Stock (or
equivalent preferred stock, as such term is defined in Section
11(b) hereof) for some or all of the Common Stock exchangeable
for Rights, at the initial rate of one four-thousandth of a share
of Preferred Stock (or equivalent preferred stock) for each share
of Common Stock, as appropriately adjusted to reflect adjustments
in the economic rights of the Preferred Stock pursuant to the
terms thereof, so that the fraction of a share of Preferred Stock
delivered in lieu of each share of Common Stock shall have the
same economic rights as one share of Common Stock.
(d) The Board shall not authorize any exchange
transaction referred to in Section 26(a) hereof unless at the
time such exchange is authorized there shall be sufficient shares
of Common Stock or Preferred Stock issued but not outstanding, or
authorized but unissued, to permit the exchange of Rights as
contemplated in accordance with this Section 26.
SECTION 27. NOTICES.
Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights
Agent) as follows:
Dover Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Subject to the provisions of Section 22, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
Xxxxxx Trust Company of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate 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 28. SUPPLEMENTS AND AMENDMENTS.
The Company and the Rights Agent may from time to time
supplement or amend this Agreement without approval of any
holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, (iii) prior to the Distribution Date, to
change or supplement the provisions hereunder which the Company
may deem necessary or desirable or (iv) following the
Distribution Date, to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of
the holders of Rights Certificates. Upon the delivery of a
certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in
compliance with the terms of this Section 28, the Rights Agent
shall execute such supplement or amendment unless the Rights
Agent shall have determined in good faith that such supplement
or amendment would adversely affect its interests under this
Agreement. Prior to this Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
SECTION 29. DETERMINATION AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock or any
other securities of which any Person is the Beneficial Owner,
shall be made in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement. The
Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the
Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation,
the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made
by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the
Rights Certificates and all other parties, and (y) not subject
the Board to any liability to the holders of the Rights
Certificates.
SECTION 30. 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 31. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company, the Rights Agent
and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, the
Common Stock).
SECTION 32. 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 33. GOVERNING LAW.
This Agreement, each Right and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws
of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State
applicable to contracts to be made and to be performed entirely
within such State.
SECTION 34. 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 35. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
DOVER CORPORATION
By /s/Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
XXXXXX TRUST COMPANY OF
NEW YORK
By Xxxxxxx X. Xxxxxxxx
--------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Trust Officer
----------------------------------------------------------------
-
DOVER CORPORATION
and
XXXXXX TRUST COMPANY OF NEW YORK
Rights Agent
-----------------
Amended and Restated Rights Agreement
Dated as of November 15, 1996
----------------------------------------------------------------
-
TABLE OF CONTENTS
SECTION PAGE
1 Certain Definitions. 1
2 Appointment of Rights Agent. 5
3 Issue of Rights Certificates. 6
4 Form of Rights Certificates. 8
5 Countersignature and Registration. 9
6 Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates. 10
7 Exercise of Rights; Purchase Price;
Expiration Date of Rights. 11
8
Cancellation and Destruction of
Rights Certificates. 14
9
Reservation and Availability of Preferred
Stock. 14
10 Preferred Stock Record Date. 16
11 Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. 16
12 Certificate of Adjusted Purchase Price or
Number of Shares. 29
13 Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. 29
14. Additional Covenants 32
15 Fractional Rights and Fractional Shares. 33
16 Rights of Action. 35
17 Agreement of Rights Holders. 36
18 Rights Certificate Holder Not Deemed a
Shareholder. 36
19 Concerning the Rights Agent. 37
20 Merger or Consolidation or Change of Name
of Rights Agent. 37
21 Duties of Rights Agent. 38
22 Change of Rights Agent. 42
23 Issuance of New Rights Certificates. 43
24 Redemption and Termination. 43
25 Notice of Certain Events. 46
26 Exchange. 47
27 Notices. 48
28 Supplements and Amendments. 49
29 Determination and Actions by the Board of
Directors, etc. 50
30 Successors. 51
31 Benefits of this Agreement. 51
32 Severability. 52
33 Governing Law. 52
34 Counterparts. 52
35 Descriptive Headings. 52
Exhibit A -- Form of Certificate of Designation,
Preferences and Rights of Series A Junior
Participating Preferred Stock A-1
Exhibit B -- Form of Rights Certificate B-1
Exhibit C -- Form of Summary of Rights C-1
