Exhibit 1
The description below is from the Form 8-A, dated November
9, 1990, as amended by a Form 8, dated August 20, 1991 and a
Form 8-A, dated December 8, 1994, and does not reflect
the amendments to the Rights Agreement effected on October
9, 1997 which are described in the amendment on Form 8-A/A
dated October 13, 1997.
Item 1. Description of Securities To Be Registered.
On November 5, 1990, the Board of Directors of
Melamine Chemicals, Inc. (the "Company") declared a dividend
of one preferred share purchase right (a "Right") for each
outstanding share of common stock, par value $.01 per share
(the "Common Shares"), of the Company. The dividend was
paid on November 15, 1990 (the "Record Date") to the
stockholders of record on that date. Each Right entitles
the registered holder to purchase from the Company one one-
hundredth of a share of Series A Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred
Shares"), of the Company at a price of $30.00 per one one-
hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Wachovia Bank and Trust
Company, N.A., as Rights Agent (the "Rights Agent"), as
amended on August 7, 1991 and August 3, 1994.
Until the earlier to occur of (i) 10 days
following a public announcement that a person or group of
affiliated or associated persons other than Ashland
Chemicals, Inc., First Mississippi Corporation, or any of
their affiliates or associates have acquired beneficial
ownership of 10% or more of the outstanding Common Shares,
(ii) 10 days following a public announcement that Ashland
Chemicals, Inc., First Mississippi Corporation, or any of
their affiliates or associates has acquired beneficial
ownership of any Common Shares in addition to those owned by
such parties as of the adoption of the Rights Agreement (any
such person or group in foregoing clauses (i) or (ii), an
"Acquiring Person"), or (iii) 10 business days (or such
later date as may be determined by action of the Board of
Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person
or group of 10% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate with a copy of the
Summary of Rights attached thereto.
The Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of
the Rights), the Rights will be transferred with and only
with the Common Shares. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common
Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares will contain a
notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record
Date, even without such notation or a copy of the Summary of
Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the
Distribution Date. The Rights will expire on November 15,
1997 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier
redeemed or exchanged by the Company, in each case, as
described below.
The Purchase Price payable, and the number of
Preferred Shares or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the
grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at
a price, or securities convertible into Preferred Shares
with a conversion price, less than the then-current market
price of the Preferred Shares or (iii) upon the distribution
to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or
dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of
one one-hundredths of a Preferred Share issuable upon
exercise of each Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the
Distribution Date.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend
payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common
Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled
to an aggregate payment of 100 times the payment made per
Common Share. 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
antidilution provisions.
Because of the nature of the Preferred Shares'
dividend, liquidation and voting rights, the value of the
one one-hundredth interest in a Preferred Share purchasable
upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold,
proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right,
that number of shares of common stock of the acquiring
company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the
Right.
At any time after any Person becomes an Acquiring
Person and prior to the acquisition by such person or group
of 50% or more of the outstanding Common Shares, the Board
of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of
one Common Share, or one one-hundredth of a Preferred Share
(or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to any person or group of
affiliated or associated persons becoming an Acquiring
Person, 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 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.
The terms of the Rights may be amended by the
Board of Directors of the company without the consent of the
holders of the Rights, except that from and after such time
as any person or group of affiliated or associated persons
becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to
receive dividends.
The Rights have certain anti-takeover effects.
The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company on terms not
approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of
Rights being acquired. The Rights should not interfere with
any merger or other business combination approved by the
Board of Directors since the Rights may be redeemed by the
Company at the Redemption Price prior to the time that a
person or group becomes an Acquiring Person.
The Rights Agreement, dated as of November 5, 1990
between the Company and Wachovia Bank and Trust Company,
N.A., as Rights Agent, specifying the terms of the Rights
and including the form of the Certificate of Designation,
Preferences and Rights setting forth the terms of the
Preferred Shares as an exhibit thereto and the form of press
release announcing the declaration of the Rights were
attached as exhibits to the Registrant's Form 8-A, which is
amended hereby, and are incorporated herein by reference.
The foregoing description of the Rights is qualified in its
entirety by reference to such exhibits.
