Exhibit 4
Execution Copy
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PPG INDUSTRIES, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
Rights Agreement
Dated as of February 19, 1998
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions....................... 1
Section 2. Appointment of Rights Agent............... 8
Section 3. Issue of Right Certificates............... 8
Section 4. Form of Right Certificates................ 11
Section 5. Countersignature and Registration......... 12
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates............... 13
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights............... 15
Section 8. Cancellation and Destruction of
Right Certificates...................... 17
Section 9. Availability of Preferred Shares.......... 18
Section 10. Preferred Shares Issue Date............... 19
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights.............. 20
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares..................... 35
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.............. 35
Section 14. Fractional Rights and Fractional Shares... 37
Section 15. Rights of Action.......................... 40
Section 16. Agreement of Right Holders................ 41
Section 17. Right Certificate Holder Not Deemed a
Stockholder............................. 42
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Page
Section 18. Concerning the Rights Agent............... 42
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.................... 43
Section 20. Duties of Rights Agent.................... 45
Section 21. Change of Rights Agent.................... 48
Section 22. Issuance of New Right Certificates........ 51
Section 23. Redemption................................ 51
Section 24. Exchange.................................. 52
Section 25. Notice of Certain Events.................. 55
Section 26. Notices................................... 57
Section 27. Supplements and Amendments................ 58
Section 28. Successors................................ 59
Section 29. Benefits of this Agreement................ 59
Section 30. Severability.............................. 60
Section 31. Governing Law............................. 60
Section 32. Counterparts.............................. 60
Section 33. Descriptive Headings...................... 60
Signatures............................................ 61
Exhibit A - Form of Statement with Respect to Series A
Junior Participating Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred
Shares
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Agreement, dated as of February 19, 1998, between
PPG Industries, Inc., a Pennsylvania corporation (the "Com-
pany"), and ChaseMellon Shareholder Services, L.L.C. (the
"Rights Agent").
The Board of Directors of the Company has autho-
rized and declared a dividend of one preferred share purchase
right (a "Right") for each Common Share (as hereinafter de-
fined) of the Company outstanding on April 6, 1998 (the
"Record Date"), each Right representing the right to purchase
one one-hundredth of a Preferred Share (as hereinafter de-
fined), upon the terms and subject to the conditions herein
set forth, and has further authorized and directed the issu-
ance of one Right with respect to each Common Share that
shall become outstanding between the Record Date and the ear-
liest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are hereinafter de-
fined).
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings indi-
cated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together with
all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 20% or more of the Com-
mon Shares of the Company then outstanding, but shall not
include the Company or any Related Entity (as such term is
hereinafter defined). Notwithstanding the foregoing, no Per-
son shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reduc-
ing the number of shares outstanding, increases the propor-
tionate number of shares beneficially owned by such Person to
20% or more of the Common Shares of the Company then out-
standing; provided, however, that if a Person shall become
the Beneficial Owner of 20% or more of the Common Shares of
the Company then outstanding by reason of share purchases by
the Company and shall, after such share purchases by the Com-
pany, become the Beneficial Owner of any additional Common
Shares of the Company, then such Person shall be deemed to be
an "Acquiring Person". Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person",
as defined pursuant to the foregoing provisions of this para-
graph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of
Common Shares so that such Person would
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no longer be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act (as
such term is hereinafter defined), 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 secu-
rities:
(i) which such Person or any of such Person's Af-
filiates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's Af-
filiates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public offer-
ing of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these
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Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Benefi-
cial Owner of, or to beneficially own, securities ten-
dered pursuant to a tender or exchange offer made by or
on behalf of such Person or any of such Person's Af-
filiates or Associates until such tendered securities
are accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or under-
standing; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own,
any security if the agreement, arrangement or under-
standing to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in re-
sponse to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D un-
der the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or in-
directly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than cus-
tomary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
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holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Ben-
eficial Ownership to the contrary, the phrase "then outstand-
ing," when used with reference to a Person's Beneficial Own-
ership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the
number of such securities not then actually issued and out-
standing which such Person would be deemed to own benefi-
cially hereunder.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
State of New York are authorized or obligated by law or ex-
ecutive 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 Shares" when used with reference to
the Company shall mean the shares of common stock, par value
$1.66-2/3 per share, of the Company. "Common Shares" when
used with reference to any Person other than the Company
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shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Per-
sons which ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(h) "Exchange Act" shall mean the Securities Ex-
change Act of 1934, as amended.
(i) "Exchange Ratio" shall have the meaning set
forth in Section 24(a) hereof.
(j) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(k) "Person" shall mean any individual, firm, cor-
poration or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(l) "Preferred Shares" shall mean shares of Series
A Junior Participating Preferred Stock, without par value, of
the Company having the rights and preferences set forth in
the Form of Statement attached to this Agreement as Exhibit
A.
(m) "Purchase Price" shall have the meaning set
forth in Section 4 hereof.
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(n) "Record Date" shall have the meaning set forth
in the second introductory paragraph hereof.
(o) "Redemption Date" shall have the meaning set
forth in Section 7 hereof.
(p) "Related Entity" shall mean any Subsidiary of
the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any entity holding Common
Shares for or pursuant to the terms of any such plan.
(q) "Right" shall have the meaning set forth in
the second introductory paragraph hereof.
(r) "Right Certificate" shall mean the Right Cer-
tificates authorized to be issued as provided in Section 3
hereof, but excluding Right Certificates which represent
Right that have become void pursuant to Section 11(a)(ii)
hereof.
(s) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(t) "Subsidiary" of any Person shall mean any cor-
poration or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
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(u) "Successor Person" shall have the meaning set
forth in Section 13 hereof.
Section 2. Appointment of Rights Agent. The Com-
pany hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Un-
til the earlier of (i) the tenth day after the Shares Acqui-
sition Date or (ii) the tenth business day (or such later
date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than
the Company or any Related Entity) of, or of the first public
announcement of the intention of any Person (other than the
Company or any Related Entity) to commence, a tender or ex-
change offer the consummation of which would result in any
Person becoming the Beneficial Owner of Common Shares ag-
gregating 20% or more of the then outstanding Common Shares
(including any such date which is after the Record Date and
prior to the issuance of the Rights; the earlier of
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such dates being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions
of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which cer-
tificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to re-
ceive Right Certificates will be transferable only in con-
nection with the transfer of Common Shares. As soon as prac-
ticable after the Distribution Date, the Company will prepare
and execute, the Rights Agent will countersign, and the Com-
pany will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, insured, postage-
prepaid mail, to each record holder of Common Shares as of
the close of business on the Distribution Date, at the ad-
dress of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for each
Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record
Date, the Company will send a copy of a Summary of Rights to
Purchase Preferred Shares, in substantially the form of Ex-
hibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares
as of the close of business on the Record Date, at the ad-
dress of such holder shown on the records of the Company.
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With respect to certificates for Common Shares outstanding as
of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates registered in the
names of the holders thereof together with a copy of the Sum-
xxxx of Rights attached thereto. Until the Distribution Date
(or the earlier of the Redemption Date or the Final Expira-
tion Date), the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, with or without
a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, because of resale
or transfer by the Company of treasury shares) after the
Record Date but prior to the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise af-
fixed to them the following legend:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement between PPG Industries, Inc. and
ChaseMellon Shareholder Services, L.L.C., dated as of February 19, 1998
(the "Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of PPG Industries, Inc. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. PPG
Industries, Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. As described in the Rights
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Agreement, Rights issued to any Person who becomes an Acquiring Person (as
defined in the Rights Agreement) will become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Shares represented by such certificates shall
be evidenced by such certificates alone, and the surrender
for transfer of any such certificate shall also constitute
the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases
or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights as-
sociated with the Common Shares which are no longer outstand-
ing.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto
and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regula-
tion made pursuant thereto or with any rule or regulation of
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any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions
of Section 22 hereof, the Right Certificates shall entitle
the holders thereof to purchase such number of one one-
hundredths of a Preferred Share as shall be set forth therein
at the price per one one-hundredth of a Preferred Share set
forth therein (the "Purchase Price"), but the number of such
one one-hundredths of a Preferred Share and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Vice Chairman or its Presi-
dent, and by its Treasurer, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal
or a facsimile thereof. The Right Certificates shall be
countersigned by the Rights Agent, either manually or by fac-
simile signature, and shall not be valid for any purpose un-
less countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who
signed such Right
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Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed
on behalf of the Company by any person who, at the actual
date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate,
although at the date of the execution of this Agreement any
such person was not such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books
for registration and transfer of the Right Certificates is-
sued hereunder. Such books shall show the names and ad-
dresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certifi-
xxxxx.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Sec-
tion 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of busi-
ness on the earlier of the Redemption Date or the Final Expi-
ration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have
become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be
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transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a
Preferred Share as the Right Certificate or Right Certifi-
xxxxx surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certifi-
xxxxx 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 en-
titled thereto a Right Certificate or Right Certificates, as
the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's re-
quest, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon sur-
render to the Rights Agent and cancellation of the Right
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Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Cer-
tificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) The registered holder of any
Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on April
30, 2008 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date"), or (iii) the time at which
such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth
of a Preferred Share purchasable pursuant to the exercise of
a Right shall initially be $320, and shall be subject to ad-
justment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
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(c) Upon receipt of a Right Certificate represent-
ing exercisable Rights, with the form of election to purchase
duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such re-
quests, or (B) requisition from the depositary agent deposi-
tary receipts representing such number of one one-hundredths
of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the deposi-
tary agent to comply with such request, (ii) when appropri-
ate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certifi-
xxxxx or depositary receipts, cause the same to be delivered
to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be des-
ignated by such holder and
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(iv) when appropriate, after receipt, deliver such cash to
or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certifi-
cate or to his duly authorized assigns, subject to the provi-
sions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or ex-
change shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any
of the provisions of this Agreement. The Company shall de-
liver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other
Right Certificate purchased or acquired by the Company other-
wise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company,
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destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Preferred Shares. The
Company covenants and agrees that it will cause to be re-
served and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its trea-
sury, the number of Preferred Shares that will be sufficient
to permit the exercise in full of all outstanding Rights in
accordance with Section 7. The Company covenants and agrees
that it will take all such action as may be necessary to en-
sure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully
paid and nonassessable shares.
The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of
Right Certificates to a person other than, or the issuance or
delivery of certificates or depositary receipts for the
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Preferred Shares in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares upon the exercise of
any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is
due.
Section 10. Preferred Shares Issue Date. Each
person in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares transfer books of the
Company are closed, such person shall be deemed to have be-
come the record holder of such shares on, and such certifi-
cate shall be dated, the next succeeding Business Day on
which the Preferred Shares transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Shares for
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which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number
of Shares or Number of Rights. The Purchase Price, the num-
ber of Preferred 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 Shares payable in Preferred Shares, (B) sub-
divide the outstanding Preferred Shares, (C) combine the out-
standing Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a re-
classification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corpora-
tion), except as otherwise provided in this Section 11(a),
the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivi-
sion, 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
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Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such date
and at a time when the Preferred Shares transfer books of the
Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in
the event any Person becomes an Acquiring Person, each holder
of a Right shall thereafter have a right to receive, upon
exercise thereof at a price equal to the then current Pur-
chase Price multiplied by the number of one one-hundredths of
a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of the Company
as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-
hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of
the occurrence of such event. In the event that any Person
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shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be af-
forded by the Rights.
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Ac-
xxxxxxx Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under
any provision of this Agreement. No Right Certificate shall
be issued pursuant to Section 3 that represents Rights ben-
eficially owned by an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Per-
son whose Rights would be void pursuant to the preceding sen-
tence or any Associate or Affiliate thereof or to any nominee
of such Acquiring Person, Associate or Affiliate; and any
Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to
the preceding sentence shall be cancelled.
(iii) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or autho-
rized but unissued to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii),
-22-
the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise
of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares, the
Company shall substitute, for each Common Share that would
otherwise be issuable upon exercise of a Right, a number of
Preferred Shares or fraction thereof such that the current
per share market price of one Preferred Share multiplied by
such number or fraction is equal to the current per share
market price of one Common Share as of the date of issuance
of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all hold-
ers of Preferred Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or
having a conversion price per share, if a security convert-
ible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the Pre-
ferred Shares (as defined in Section 11(d)) on such record
date, the Purchase Price to be in effect after such record
-23-
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 Preferred
Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conver-
sion price of the convertible securities so to be offered)
would purchase at such current market price and the denomina-
tor of which shall be the number of Preferred Shares out-
standing on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the con-
vertible securities so to be offered are initially convert-
ible); provided, however, that in no event shall the consid-
eration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of one Right. In case
such subscription price may be paid in a consideration part
or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent. Preferred Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall
-24-
be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date
for the making of a distribution to all holders of the Pre-
ferred Shares (including any such distribution made in con-
nection with a consolidation or merger in which the Company
is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or sub-
scription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the then
current per share market price of the Preferred Shares on
such record date, less the fair market value (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) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market
price of the Preferred Shares;
-25-
provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjust-
ments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation here-
under, the "current per share market price" of any security
(a "Security" for the purpose of this Section 11(d)(i)) on
any date shall be deemed to be the average of the daily clos-
ing prices per share of such Security for the 30 consecutive
Trading Days (as such term is hereinafter defined) im-
mediately prior to such date; provided, however, that in the
event that the current per share market price of the Security
is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution
on such Security payable in shares of such Security or secu-
rities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to
the expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and
in each such case, the current per
-26-
share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of
such Security. The closing price for each day shall be
the last sale price, regular way, or, 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 Security is not listed or
admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction report-
ing system with respect to securities listed on the principal
national securities exchange on which the Security is listed
or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Deal-
ers, Inc. Automated Quotations System ("NASDAQ") or such
other system then in use, or, if on any such date the Secu-
rity is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a profes-
sional market maker making a market in the Security selected
by the Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national securi-
ties
-27-
exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares
shall be determined in accordance with the method set forth
in Section 11(d)(i). If the Preferred Shares are not pub-
licly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the cur-
rent per share market price of the Common Shares as deter-
mined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transac-
tion occurring after the date hereof), multiplied by one hun-
dred. If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as deter-
mined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed
with the Rights Agent.
(e) 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, how-
ever, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward
-28-
and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the near-
est cent or to the nearest one one-millionth of a Preferred
Share or one ten-thousandth of any other share or security as
the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years
from the date of the transaction which requires such adjust-
ment or (ii) the date of the expiration of the right to exer-
cise any Rights.
(f) If as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares,
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 Preferred
Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to
the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price here-
under shall evidence the right to purchase, at the
-29-
adjusted Purchase Price, the number of one one-hundredths
of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment
as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment
of the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evi-
dence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (cal-
culated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price
and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Pur-
chase 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
one one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
-30-
for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such ad-
justment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date
for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereaf-
ter, but, if the Right Certificates have been issued, shall
be at least 10 days later than the date of the public an-
nouncement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Sec-
tion 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Cer-
tificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjust-
ment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof,
-31-
if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of
the holders of record of Right Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may con-
tinue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-
hundredth of the then par value, if any, of the Preferred
Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may val-
idly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made ef-
fective as of a record date for a specified event, the
-32-
Company may elect to defer until the occurrence of such event
the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock
or securities of the Company, if any, issuable upon such ex-
ercise over and above the Preferred Shares and other capital
stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those ad-
justments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision
of the Preferred Shares, issuance wholly for cash of any Pre-
ferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Pre-
ferred Shares, dividends on Preferred Shares payable in Pre-
ferred Shares or issuance of rights, options or warrants re-
ferred to hereinabove in Section 11(b), hereafter made by
-33-
the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(n) In the event that at any time after the date
of this Agreement and prior to the Distribution Date, the
Company shall (i) declare and pay any dividend on the Common
Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment of dividends in Com-
mon Shares) into a greater or lesser number of Common Shares,
then in any such case (A) the number of one one-hundredths of
a Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchas-
able immediately prior to such event by a fraction, the nu-
merator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is
the number of Common Shares outstanding immediately after
such event, and (B) each Common Share outstanding immediately
after such event shall have issued with respect to it that
number of Rights which each Common Share outstanding im-
mediately 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 and
paid or such a subdivision, combination or consolidation is
effected.
-34-
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly (a) prepare
a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjust-
ment, and (b) file with the Rights Agent and with each trans-
fer agent for the Common Shares or the Preferred Shares a
copy of such certificate.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. In the event, directly
or indirectly, at any time after a Person has become an Ac-
xxxxxxx Person, (a) the Company shall consolidate with, or
merge with and into, any other Person, (b) any Person shall
consolidate with the Company, or merge with and into the Com-
pany and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (c)
the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one
or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other
than the Company or one or more of its wholly-owned Subsid-
iaries, then, and in each such case, proper provision
-35-
shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right
to receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares
of such other Person (including the Company as successor
thereto or as the surviving corporation) as shall equal the
result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price
of the Common Shares of such other Person (determined pursu-
ant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) the issuer
of such Common Shares shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale
or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares
in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provi-
sions hereof shall thereafter be applicable, as nearly as
-36-
reasonably may be, in relation to the Common Shares thereaf-
ter deliverable upon the exercise of the Rights. The Company
shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such issuer
shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The Company shall not
enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or
any agreements or arrangements which, as a result of the con-
summation of such transaction, would eliminate or substan-
tially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or
other transfers.
Section 14. Fractional Rights and Fractional
Shares. (a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date
-37-
on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal con-
solidated transaction reporting system with respect to secu-
rities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with re-
spect to securities listed on the principal national securi-
ties exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trad-
ing on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported
by NASDAQ or such other system then in use or, if on any such
date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights se-
lected 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 deter-
mined in good faith by the Board of Directors of the Company
shall be used.
-38-
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than frac-
tions which are integral multiples of one one-hundredth of a
Preferred Share). Fractions of Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary re-
ceipts, pursuant to an appropriate agreement between the Com-
pany 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 prefer-
ences to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the Com-
pany shall pay to the registered holders of Right Certifi-
xxxxx at the time such Rights are exercised as herein pro-
vided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the pur-
poses of this Section 14(b), the current market value of a
Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to the second sentence of Sec-
tion 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
-39-
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right (ex-
cept as provided above).
Section 15. Rights of Action. All rights of ac-
tion in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right Cer-
tificates (and, prior to the Distribution Date, the regis-
tered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the Distribu-
tion Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and
may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifi-
cally acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obliga-
tions under, and injunctive relief against actual or
-40-
threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
the Common Shares;
(b) after the Distribution Date, the Right Cer-
tificates 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 in-
strument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any nota-
tions of ownership or writing on the Right Certificates or
the associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes what-
soever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
-41-
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be con-
strued to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stock-
holders (except as provided in Section 25 hereof), or to re-
ceive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Com-
pany agrees to pay to the Rights Agent reasonable compensa-
tion for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable ex-
penses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Com-
pany also agrees to indemnify the Rights
-42-
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 connec-
tion with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any
claim of liability in the premises.
The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of
this Agreement in reliance upon any Right Certificate or cer-
tificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowl-
edged, by the proper person or persons, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or
-43-
any successor Rights Agent shall be a party, or any corpora-
tion succeeding to the stock transfer or corporate trust pow-
ers 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 suc-
cessor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of
the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been coun-
tersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certifi-
xxxxx shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned;
-44-
and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal coun-
sel (who may be legal counsel for the Company), and the opin-
ion 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 opin-
ion.
(b) Whenever in the performance of its duties un-
der this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action here-
under, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board,
-45-
the Vice Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any re-
sponsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersigna-
ture thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be re-
sponsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to
-46-
Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, or the ascertain-
ing of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such
change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares
to be issued pursuant to this Agreement or any Right Certifi-
cate or as to whether any Preferred Shares will, when issued,
be validly authorized and issued, fully paid and nonassess-
able.
(f) The Company agrees that it will perform, ex-
ecute, acknowledge and deliver or cause to be performed, ex-
ecuted, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be re-
quired 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 di-
rected to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the
Board, the Vice Chairman of the Board, the President, any
Vice President, the Secretary or the Treasurer of the Com-
pany, and to apply to such officers for advice or
-47-
instructions in connection with its duties, and it shall not
be liable for any action taken or suffered by it in good faith
in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, direc-
tor, 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, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be dis-
charged from its duties under this Agreement upon 30 days'
-48-
notice in writing mailed to the Company and to each transfer
agent of the Common Shares or Preferred Shares by registered
or certified mail, and to the holders of the Right Certifi-
xxxxx by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the
Common Shares or Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates by first-
class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Com-
pany shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a
new Rights Agent. Any successor Rights Agent, whether ap-
pointed by the Company or by such a court, shall be a corpo-
ration organized and doing business under the laws of the
United States or of the State of New York or Commonwealth of
Pennsylvania (or of any other state of the United States so
long as such corporation is authorized to do business as a
-49-
banking institution in the State of New York or Commonwealth
of Pennsylvania), in good standing, having an office in the
State of New York or Commonwealth of Pennsylvania, which is
authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or exami-
nation by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital
and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been origi-
xxxxx named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or
any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the ap-
pointment of the successor Rights Agent, as the case may be.
-50-
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property pur-
chasable under the Right Certificates made in accordance with
the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Direc-
tors of the Company may, at its option, at any time prior to
such time as any Person becomes an Acquiring Person, redeem
all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transac-
tion occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such con-
ditions as the Board of Directors in its sole discretion may
establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the
Rights pursuant to paragraph (a) of this Section 23, and
without any further action and without any notice, the right
-51-
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after
such action of the Board of Directors ordering the redemption
of the Rights, the Company shall mail a notice of redemption
to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the reg-
istry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made. Neither
the Company nor any of its Affiliates or Associates may re-
deem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this
Section 23 or in Section 24 hereof, and other than in connec-
tion with the purchase of Common Shares prior to the Distri-
bution Date.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any Per-
son becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not
-52-
include Rights that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for Common Shares at an exchange
ratio of one Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar trans-
action occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Not-
withstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Com-
pany, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursu-
ant to the terms of any such plan), together with all Affili-
ates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
-53-
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall
be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions
of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or autho-
rized but unissued to permit any exchange of Rights as con-
templated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the
Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary
to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number
or fraction is equal to the current per share market price of
-54-
one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of such
fractional Common Shares, the Company shall pay to the regis-
tered holders of the Right Certificates with regard to which
such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current mar-
ket value of a whole Common Share. For the purposes of this
paragraph (d), the current market value of a whole Common
Share shall be the closing price of a Common Share (as deter-
mined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case
the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or
to make any other distribution to the holders of its Pre-
ferred Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Shares rights
or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclas-
sification of its Preferred Shares (other than a
-55-
reclassification involving only the subdivision of outstand-
ing Preferred Shares), (iv) to effect any consolidation or
merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsid-
iaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Common Shares pay-
able in Common Shares or to effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liq-
uidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common
Shares and/or Preferred Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days
prior to the record date for determining holders of the Pre-
ferred Shares for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date
-56-
of the taking of such proposed action or the date of partici-
pation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
(b) In case the event set forth in Section
11(a)(ii) hereof shall occur, then the Company shall as soon
as practicable thereafter give to each holder of a Right Cer-
tificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of
Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands autho-
rized by this Agreement to be given or made by the Rights
Agent or by the holder of any Right Certificate to or on the
Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as fol-
lows:
PPG Industries, Inc.
Xxx XXX Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Right Certificate to or
on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until
-57-
another address is filed in writing with the Company) as fol-
lows:
ChaseMellon Shareholders Services, L.L.C.
0 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Administration Department
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of
any Right Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Com-
pany may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or incon-
sistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company
may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company
and the Rights Agent; provided, however, that from and after
such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner which would ad-
versely affect the interests of the holders of Rights. With-
out limiting the foregoing, the Company may at
-58-
any time prior to such time as any Person becomes an
Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) to not
less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any Subsidiary
of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan) and (ii) 10%.
Section 28. Successors. All the covenants and pro-
visions of this Agreement by or for the benefit of the Com-
pany or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing
in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equi-
table right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the
Common Shares).
-59-
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provi-
sions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be af-
fected, impaired or invalidated.
Section 31. Governing Law. This Agreement and
each Right Certificate issued hereunder shall be deemed to be
a contract made under the laws of the Commonwealth of Penn-
sylvania and for all purposes shall be governed by and con-
strued in accordance with the laws of such Commonwealth ap-
plicable to contracts to be made and performed entirely
within such Commonwealth.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such coun-
terparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are in-
serted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
-60-
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and attested, all as of
the day and year first above written.
PPG INDUSTRIES, INC.
Attest:
By /s/ Xxxxxxx X. Xxxxxx By /s/ X.X. Xxxxxxxxx
Title: Assistant Secretary Title: Senior Vice President, Finance
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By /s/ Xxxxx Xxxxxxx By /s/ Xxxxxxxx Xxxxxxxx
Title: Assistant Trust Officer Title: Assistant Vice President
-61-
Exhibit A
FORM OF
STATEMENT WITH RESPECT TO
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
PPG INDUSTRIES, INC.
Statement with respect to Series A Junior Participating Preferred
Stock, being the first series of Preferred Stock, without par value, of PPG
Industries, Inc.
In compliance with the requirements of 15 Pa.C.S. Section 1522 the
applicant Corporation hereby certifies under its corporate seal that:
1. The name of the Corporation is PPG Industries, Inc.
2. The resolution duly adopted by the Board of Directors of the
Corporation establishing and designating the Series A Junior Participating
Preferred Stock, which is the first series of the Preferred Stock, without par
value, and fixing and determining the relative rights and preferences thereof is
as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 2,000,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of Common Stock, par
value $1.66-2/3 per share (the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the
A-1
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of Common Stock or
a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first
A-2
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 50 days prior to the date
fixed for the payment thereof.
(D) The annual dividend on the Series A Preferred Stock shall be equal
to the sum of the quarterly dividends in each year.
Section 3. Voting Rights. The holders of shares
of Series A Preferred Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Statement
creating a series of Preferred Stock or any similar stock, or by law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock and
A-3
any other capital stock of the Corporation having general voting rights shall
vote together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined
A-4
by the Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Restated Articles of Incorporation, as amended, of the Corporation, or in any
other Statement creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or
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combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A
Preferred Stock shall not be redeemable.
Section 9. Fractional Shares. The Corporation may issue fractions and
certificates representing fractions of a share of Series A Preferred Stock in
integral multiples of 1/100th of a share of Series A Preferred Stock, or in lieu
thereof, at the election of the Board of Directors of the Corporation at the
time of the first issue of any shares of Series A Preferred Stock evidence such
fractions by depositary receipts, pursuant to an appropriate agreement
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between the Corporation and a depositary selected by it, provided that such
agreement shall provide the holders of such depositary receipts shall have all
the rights, privileges and preferences to which they would be entitled as
beneficial owners of shares of Series A Preferred Stock. In the event that
fractional shares of Series A Preferred Stock are issued, the holders thereof
shall have all the rights provided herein for holders of full shares of Series A
Preferred Stock in the proportion which such fraction bears to a full share.
Section 10. Amendment. The Restated Articles of Incorporation, as
amended, of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, this Statement is executed on behalf of the
Corporation by its Chairman of the Board and attested by its Secretary this ___
day of _____________, 1998.
PPG INDUSTRIES, INC.
---------------------------
Chairman of the Board of
Directors
[CORPORATE SEAL]
Attest:
------------------
Secretary
Approved and filed in the Department of State on the ---------- day of
----------, 1998.
------------------------------
Secretary of the Commonwealth
A-7
Exhibit B
Form of Right Certificate
Certificate No. R- Rights
NOT EXERCISABLE AFTER APRIL 30, 2008 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
PPG INDUSTRIES, INC.
This certifies that _______________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of February 19, 1998 (the "Rights Agreement"),
between PPG Industries, Inc., a Pennsylvania corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent"), to purchase from
the Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., New York City time, on April 30,
2008 at the principal office of the Rights Agent, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, without par value (the
"Preferred Shares"), of the Company, at a purchase price of $320 per one
one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of April 21, 1998, based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
B-1
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for Preferred Shares
or shares of the Company's Common Stock, par value $1.66-2/3 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
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meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper offic-
ers of the Company and its corporate seal. Dated as of
, .
ATTEST: PPG INDUSTRIES, INC.
By
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By
Authorized Signature
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ,
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
Signature
-------------------------------------------------------------
B-4
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the
Right Certificate.)
To: PPG INDUSTRIES, INC.
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ,
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
B-5
Form of Reverse Side of Right Certificate -- continued
-------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
Signature
-------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On February 19, 1998, the Board of Directors of PPG Industries, Inc.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $1.66-2/3 per
share, of the Company. The Rights were issued to stockholders of record on April
6, 1998 and will expire in ten years on April 30, 2008.
Initially, the Rights will not be exercisable, certificates will not
be sent to you, and the Rights will automatically trade with the common shares.
However, ten days after a person or group acquires 20% or more of the Company's
shares, or ten business days (or such later date as may be determined by the
Board) after a person or group announces an offer the consummation of which
would result in such person or group owning 20% or more of the shares (even if
no purchases actually occur), the Rights will become exercisable and separate
certificates representing the Rights will be distributed. We expect that the
Rights will begin to trade independently from the Company's shares at that time.
Until that time, the Rights will be represented by the existing common stock
certificates together with a copy of this summary or by new common stock
certificates which will contain a notation incorporating the terms of the Rights
by reference. At no time will the Rights have any voting power.
When the Rights first become exercisable, unless a person or group has
acquired 20% or more of the Company's shares, a holder will be entitled to buy
from the Company one one-hundredth of a share of a new series of junior
participating preferred stock for $320. If any person or group acquires 20% or
more of the Company's outstanding common stock, the "flip-in" provision of the
Rights will be triggered and each Right will entitle the holder (other than such
person or any member of such group) to buy a number of additional shares of
common stock of the Company (or one one-hundredth of a share of the new series
of junior participating preferred stock described below) having a market value
of twice the exercise price of the Right. Thus, if at the time of the 20%
acquisition the Company's stock were to have a market value per share equal to
$80, the holder of each Right (other than such person or any member of
such group) would be entitled to receive eight shares of PPG common stock for
$320.
If the Company is involved in a merger or other business combination
at any time after a person or group has acquired 20% or more of the Company's
shares, the Rights will entitle a holder to buy a number of shares of common
stock of the acquiring company having a market value of twice the exercise price
of each Right. For example, if at the time of the business combination the
acquiring company's stock has a per share value of $80, the holder of each Right
would be entitled to receive eight shares of the acquiring company's common
stock for $320, i.e., at a 50% discount.
Following the acquisition by any person or group of 20% or more of the
Company's common stock, but only prior to the acquisition by a person or group
of a 50% stake, the Board of Directors will also have the ability to exchange
the Rights (other than Rights held by such person or group), in whole or in
part, for one share of common stock (or one one-hundredth of a share of the new
series of junior participating preferred stock described below) per Right. This
provision will have an economically dilutive effect on the acquiror, and provide
a corresponding benefit to the remaining rightsholders, that is comparable to
the flip-in without requiring rightsholders to go through the process and
expense of exercising their Rights.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of the
outstanding Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
In addition to authorizing the new Rights, your Board designated a
series of junior participating preferred stock as the preferred stock which is
purchasable upon exercise of the Rights. The shares of the junior participating
preferred stock will be nonredeemable. Each preferred share will be entitled to
an aggregate dividend equal to the greater of $1 per share or 100 times the
dividend declared on the common shares. In the event of liquidation, the holders
of the preferred shares will be
C-2
entitled to receive an aggregate liquidation payment equal to the greater of
$100 or 100 times the payment made per share of common stock. Each preferred
share will have 100 votes, voting together with the common shares. Finally, in
the event of any merger, consolidation or other transaction in which common
shares are exchanged, each preferred share will be entitled to receive 100 times
the amount received per common share. These rights are protected by customary
anti-dilution provisions. In the event of issuance of preferred shares upon
exercise of the Rights, in order to facilitate trading a depositary receipt may
be issued for each one one-hundredth of a preferred share. The dividend,
liquidation and voting rights, and the non-redemption feature, of the preferred
shares are designed so that the value of the one-hundredth interest in a
preferred share purchasable with each Right will approximate the value of one
share of common stock.
C-3
