Exhibit 4B
X. X. XXXXXX COMPANY
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
RIGHTS AGREEMENT
DATED AS OF OCTOBER 24, 2006
TABLE OF CONTENTS
Section No. Page No.
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Section 1. Certain Definitions..........................................1
Section 2. Appointment of Rights Agent..................................4
Section 3. Issuance of Rights Certificates..............................5
Section 4. Form of Rights Certificates..................................6
Section 5. Countersignature and Registration............................6
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates................................7
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights...............................................8
Section 8. Cancellation and Destruction of Rights Certificates.........10
Section 9. Reservation and Availability of Capital Stock...............10
Section 10. Common Stock Record Date....................................12
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights...............................12
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares............................................19
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power..................................20
Section 14. Fractional Rights and Fractional Shares.....................23
Section 15. Rights of Action............................................24
Section 16. Agreement of Rights Holders.................................24
Section 17. Rights Certificate Holder Not Deemed a Shareholder..........24
Section 18. Concerning the Rights Agent.................................25
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.......................................................25
Section 20. Duties of Rights Agent......................................26
Section 21. Change of Rights Agent......................................28
Section 22. Issuance of New Rights Certificates.........................29
Section 23. Redemption and Termination..................................29
Section 24. Exchange....................................................30
Section 25. Notice of Certain Events....................................31
Section 26. Notices.....................................................32
Section 27. Supplements and Amendments..................................33
Section 28. Successors..................................................34
Section 29. Determinations and Actions by the Board of
Directors, etc..............................................34
Section 30. Benefits of this Agreement..................................35
Section 31. Severability................................................35
Section 32. Governing Law...............................................35
Section 33. Counterparts................................................35
Section 34. Descriptive Headings........................................36
EXHIBIT A
EXHIBIT B
RIGHTS AGREEMENT
This Rights Agreement, dated as of October 24, 2006 (the "Agreement"), is
made and entered into by and between X.X. Xxxxxx Company, a Pennsylvania
corporation (the "Company"), and American Stock Transfer & Trust Company, a New
York corporation (the "Rights Agent"), with reference to the following
background:
On October 24, 2006 (the "Declaration Date"), the Board of Directors of the
Company authorized and declared a dividend distribution of one Right for each
share of Common Stock, par value $.01 per share, of the Company (the "Common
Stock") outstanding at the close of business on May 15, 2007 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of Section 11(p)) for each
share of Common Stock of the Company issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and the Distribution
Date. This Agreement sets forth the terms of the Rights.
NOW, THEREFORE, with the intention of being legally bound, the parties
agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
(a) "Acquiring Person" means any Person that, together with all Affiliates
and Associates of that Person, is the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, but shall not include:
(i) the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan, or
(ii) any Person who would otherwise become an Acquiring Person solely
as a result of a reduction in the number of shares of Common Stock outstanding
due to the repurchase of shares of Common Stock by the Company, unless and
until that Person shall purchase or otherwise become the Beneficial Owner of
additional shares of Common Stock constituting 0.5% or more of the then
outstanding shares of Common Stock other than pursuant to a Qualifying Offer.
Notwithstanding the foregoing, a Person shall not become an "Acquiring Person"
as the result of the acquisition by the Person of newly issued shares of Common
Stock directly from the Company (it being understood that a purchase from an
underwriter or other intermediary in connection with a public offering by the
Company is deemed for purposes hereof to be a purchase directly from the
Company). If a Person (x) shall become the Beneficial Owner of 20% or more of
the shares of Common Stock of the Company then outstanding by reason of the
receipt of newly-issued shares of Common Stock directly from the Company and (y)
shall, after such direct issuance by the Company, become the Beneficial Owner of
any additional shares of Common Stock of the Company other than pursuant to a
Qualifying Offer (and thereafter remains a Beneficial Owner of 20% or more of
the shares of Common Stock of the Company), then such Person shall be deemed to
be an "Acquiring Person." If a transferee of shares from a Person described in
clause (x) of the preceding sentence, regardless of whether the transferor
acquires additional shares as described in clause (y) of the preceding sentence,
becomes the Beneficial Owner of 20% or more of the shares of Common Stock of the
Company then outstanding, the transferee shall be deemed to be an "Acquiring
Person."
(b) "Act" means the Securities Act of 1933, as amended.
(c) "Affiliate" and "Associate" have the respective meanings ascribed to
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own," any securities:
(i) that the Person or any of the Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
that right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; except that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own":
(A) securities tendered pursuant to a tender or
exchange offer made by the Person or any of the Person's
Affiliates or Associates until the tendered securities are
accepted for purchase or exchange, or
(B) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event, or
(C) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event which Rights
were acquired by the Person or any of the Person's Affiliates
or Associates prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 (the "Original Rights") or pursuant
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to Section 11(a)(i) in connection with an adjustment made with
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respect to any Original Rights;
(ii) that the Person or any of the Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 or any successor
regulation of the General Rules and Regulations under the Exchange Act),
including pursuant to any agreement, arrangement or understanding, whether
or not in writing; except that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this paragraph (ii)
as a result of an agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act,
and
(B) is not also then reportable by the Person on
Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which the Person (or
any of the Person's Affiliates or Associates) has any agreement, arrangement
or understanding (whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
exception to subparagraph (ii) above or disposing of any voting securities of
the Company.
Nothing in this subsection (d) shall cause a Person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired through that Person's participation in good faith
in a firm commitment underwriting until the expiration of 40 days after the date
of such acquisition.
(e) "Business Day" means any day other than a Saturday, Sunday or a day on
which banking institutions in the Commonwealth of Pennsylvania are authorized or
obligated by law or executive order to close.
(f) "Close of business" on a date means 5:00 P.M., Pittsburgh time, on that
date; except that if that date is not a Business Day it shall mean 5:00 P.M.,
Pittsburgh time, on the next succeeding Business Day.
(g) "Common Stock" means the Common Stock, par value $.01 per share, of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock of that Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of that Person.
(h) "Continuing Director" shall mean any member of the Board of Directors
of the Company who is not an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or a nominee or representative of an Acquiring Person or any
such Affiliate or Associate and who was a member of the Board of Directors of
the Company before the Stock Acquisition Date, and any successor to a Continuing
Director who is not an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or nominee or representative of an Acquiring Person or of any
such Affiliate or Associate and who was recommended for election or elected to
succeed the Continuing Director by a majority of the Continuing Directors then
on the Board of Directors of the Company.
(i) "Distribution Date" means the earlier of the following:
(i) the close of business on the tenth day after the Stock Acquisition
Date, or
(ii) the close of business on the tenth Business Day after the date
that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to any such plan) is first published
or sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, the
Person would be the Beneficial Owner of 20% or more of the shares of Common
Stock then outstanding.
(j) "Person" means any individual, firm, corporation, partnership,
association or other entity.
(k) "Purchase Price" means the exercise price at which a holder of a Right
may purchase one share of Common Stock upon exercise of a Right.
(l) "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the members of the Continuing Directors who are not officers
or employees of the Company and who are not representatives, nominees,
Affiliates or Associates of the Person making the offer, to be
(i) at a price that is fair to Stockholders (taking into account
all factors that such Continuing Directors deem relevant) and
(ii) otherwise in the best interests of the Company and its
Stockholders.
(m) "Section 11(a)(ii) Event" means any event described in
Section 11(a)(ii).
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(n) "Section 13 Event" means any event described in clauses (x), (y) or (z)
of Section 13(a).
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(o) "Stock Acquisition Date" means the first date of public announcement
(which, for purposes of this definition, includes, without limitation, a report
filed pursuant to Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(p) "Subsidiary" means, with reference to any Person, any corporation of
which an amount of voting securities sufficient to elect at least a majority of
the directors of that corporation is beneficially owned, directly or indirectly,
by that Person, or otherwise controlled by that Person.
(q) "Triggering Event" means any Section 11(a)(ii) Event or Section 13
Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3, shall prior to the Distribution Date also be the
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holders of the Common Stock) in accordance with the terms of this Agreement, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such Co-Rights Agents as it deems necessary or desirable.
Section 3. Issuance of Rights Certificates.
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(a) Until the Distribution Date:
(i) the Rights will be evidenced (subject to subsection (b))
by the certificates for the Common Stock registered in the names of the holders
of the Common Stock (which certificates for Common Stock shall be deemed
also to be certificates for Rights) and not by separate certificates, and
(ii) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a transfer to the
Company).
As soon as practicable after the Distribution Date, the Rights Agent will send
by first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date, at the
address of the holder shown on the records of the Company, one or more rights
certificates in substantially the form of Exhibit A (the "Rights Certificates"),
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evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided in this Agreement. If an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p) at the
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time of distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with
Section 14(a)) so that Rights Certificates representing only whole numbers of
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Rights are distributed and cash is paid in lieu of any fractional Rights. On
and after the Distribution Date, the Rights will be evidenced solely by
the Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit B (the "Summary of Rights"), by first-class, postage prepaid mail, to
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each record holder of the Common Stock as of the close of business on the Record
Date, at the address of the holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by the certificates
for the Common Stock and the registered holders of the Common Stock shall also
be the registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as defined in Section 7), the transfer
of any certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with those shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock that
are issued (whether originally issued or from the Company's treasury) after the
Record Date but prior to the earlier of the Distribution Date or the Expiration
Date and, in certain circumstances as provided in Section 22, after the
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Distribution Date. Certificates representing those shares of Common Stock shall
also be deemed to be certificates for Rights, and shall bear the following
legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between X.X. Xxxxxx
Company (the "Company") and American Stock Transfer & Trust Company
(the "Rights Agent") dated as of October 24, 2006 (the "Rights
Agreement"), the terms of which are incorporated herein by this
reference and a copy of which is on file at the principal office of the
Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to or held by any Person who is,
was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, may become null and void.
With respect to certificates containing the foregoing legend, until the earlier
of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated
with the Common Stock represented by such certificates shall be evidenced by
such certificates alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. If the Company acquires any
Common Stock after the Record Date but before the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any rights associated with Common
Stock that is no longer outstanding.
Section 4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially in
the form set forth in Exhibit A and may have such marks of identification or
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designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with this Agreement, or
as may be required to comply with any applicable law, rule or regulation,
including any rule or regulation of any stock exchange or other trading facility
on which the Rights may from time to time be listed or traded, or to conform to
usage. Subject to Section 11 and Section 22, the Rights Certificates, whenever
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distributed, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of shares of Common Stock as
shall be set forth therein at the Purchase Price, but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided in this Agreement.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22
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that represents Rights beneficially owned by a Person described in Section 7(e),
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and any Rights Certificate issued pursuant to Section 6 or Section 11 upon
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transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
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(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President, either manually
or by facsimile signature, and shall have affixed thereto the Company's seal or
a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Rights
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. If any officer of the Company
who has signed any of the Rights Certificates ceases to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not ceased
to be such officer of the Company. Any Rights Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Rights Certificate, is a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the appropriate place
for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
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Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
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(a) Subject to Sections 4(b), 7(e) and 14, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
the Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock (or other securities, cash or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for that purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action with respect to the transfer of any
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of the Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4(b), 7 (e) and 14,
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countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) Subject to subsection (e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided in this Agreement) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the principal office or offices of the Rights
Agent designated for that purpose, together with payment of the aggregate
Purchase Price with respect to the total number of shares of Common Stock (or
other securities, cash or other assets, as the case may be) as to which the
surrendered Rights are then exercisable, at or prior to the earliest of (the
earliest of (i), (ii) and (iii) being herein referred to as the "Expiration
Date"):
(i) the close of business on October 24, 2016 (the "Final
Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in
Section 23, or
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(iii) the time at which the Rights are exchanged as provided in
Section 24.
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(b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $30.00 and shall be subject to adjustment
from time to time as provided in Sections 11 and 13(a) and shall be payable in
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accordance with subsection (c).
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per share of Common Stock (or other shares, securities, cash or other
assets, as the case may be) to be purchased as set forth below and an amount
equal to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k), thereupon promptly:
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(i) (A) requisition from any transfer agent of the shares of Common
Stock (or make available, if the Rights Agent is the transfer agent for those
shares) certificates for the total number of shares of Common Stock to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or
(B) if the Company shall have elected to deposit the total number
of shares of Common Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing the number of shares of Common Stock as are to be purchased
(in which case certificates for the shares of Common Stock represented by such
receipts shall be deposited by the transfer agent with the depositary agent)
and the Company will direct the depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14,
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(iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of the
Rights Certificate, registered in such name or names as may be designated
by the holder, and
(iv) after receipt thereof, deliver such cash, if any, to or upon the
order of the registered holder of the Rights Certificate.
The payment of the Purchase Price (as that amount may be reduced pursuant to
Section 11(a)(iii)) shall be made in cash or by certified bank check or bank
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draft payable to the order of the Company. If the Company is obligated to issue
other securities of the Company, to pay cash and/or to distribute other property
pursuant to Section 11(a), the Company will make all arrangements necessary so
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that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) If the registered holder of any Rights Certificate exercises fewer than
all the Rights evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder of the
Rights Certificate, registered in such name or names as may be designated by
such holder, subject to Section 14.
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(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by:
(i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person,
(ii) a transferee of an Acquiring Person (or an Associate or Affiliate
of an Acquiring Person ) who becomes a transferee after the Acquiring
Person becomes such, or
(iii) a transferee of an Acquiring Person (or an Associate or
Affiliate of an Acquiring Person) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either:
(A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in
the Acquiring Person or to any Person with whom the Acquiring
Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights, or
(B) a transfer that the Board of Directors of the
Company has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the
avoidance of this subsection (e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under this Agreement or otherwise. The Company shall use all reasonable efforts
to ensure that this subsection (e) and Section 4(b) are complied with, but shall
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have no liability to any holder of Rights Certificates or other Person as a
result of its failure to make any determinations hereunder with respect to an
Acquiring Person or its Affiliates, Associates or transferees.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless the registered holder shall have:
(i) completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of the Rights or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
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Certificates surrendered for exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or any of its agents, be delivered
to the Rights Agent for cancellation or in canceled form, or, if surrendered to
the Rights Agent, shall be canceled by it, and no Rights Certificates shall be
issued in lieu thereof except as expressly permitted by this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
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(a) The Company covenants and agrees that it will from and after such time
as the Rights become exercisable use its best reasonable efforts to cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock (and any other securities for which the Rights become exercisable), the
number of shares of Common Stock (and/or other securities) that, as provided in
this Agreement, including without limitation Section 11(a)(iii), will be
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sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock (and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange or authorized for quotation on the National
Association of Securities Dealers, Inc. Automated Quotation System ("Nasdaq"),
the Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be
authorized for such quotation or to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to:
(i) file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event, a registration statement
under the Act, with respect to the securities purchasable upon exercise of the
Rights on an appropriate form,
(ii) cause that registration statement to become effective as
soon as practicable after such filing, and
(iii) cause that registration statement to remain effective
(with aprospectus at all times meeting the requirements of the Act) until the
earlier of:
(A) the date as of which the Rights are no longer
exercisable for such securities, and
(B) the Expiration Date.
The Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily
suspend, for up to 90 days after the date set forth in clause (i) of the first
sentence of this subsection (c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in effect. In
addition, if the Company shall determine that a registration statement is
required following the Distribution Date, the Company may temporarily suspend
the exercisability of the Rights until such time as a registration statement has
been declared effective so long as the Company uses good faith efforts to that
end. Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
that jurisdiction has not been obtained, the exercise thereof is not permitted
under applicable law or a registration statement has not been declared
effective.
(d) The Company will take all such action as may be necessary to ensure
that all Common Stock and/or other shares of capital stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for Common Stock (and/or other securities, as the case may be)
issued upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of Common Stock
(and/or other securities, as the case may be) in respect of a name other than
that of the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for Common
Stock (and/or other securities, as the case may be), in a name other than that
of the registered holder upon the exercise of any Rights until such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each Person in whose name any
----------------------------
certificate for Common Stock (and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of that Common Stock and/or other securities, as the
case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing those Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made. If the date of surrender and payment is a date upon which the
Common Stock (and/or other securities, as the case may be) transfer books of the
Company are closed, the Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Stock (and/or other
securities, as the case may be) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided in this Agreement.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
-------------------------------------------------------------
Number of Rights. The Purchase Price, the number and kind of shares covered by
-----------------
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) If the Company at any time after the Distribution Date:
(A) declares a dividend on the Common Stock payable
in shares of Common Stock,
(B) subdivides the outstanding Common Stock,
(C) combines the outstanding Common Stock into a
smaller number of shares, or
(D) issues any shares of its capital stock in a
reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation),
except as otherwise provided in this subsection (a) and Section 7(e), the number
------------
and kind of shares of Common Stock or capital stock, as the case may be,
issuable on the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the aggregate number
and kind of shares of Common Stock or capital stock, as the case may be, that,
if such Right had been exercised immediately prior to such date and at a time
when the Common Stock transfer books of the Company were open, the holder would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.
(ii) If any Person becomes an Acquiring Person other than pursuant to a
transaction subject to Section 13(a) or a Qualifying Offer, then,
-------------
promptly following the occurrence of such event, proper provision shall be made
so that each holder of a Right (except as provided below and in Section 7(e))
--------------
shall thereafter have the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with this Agreement, such
number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
shares of Common Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by 50%
of the current market price (determined pursuant to subsection (d)) per share of
Common Stock on the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) If the number of shares of Common Stock authorized by the Company's
certificate of incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing paragraph (ii)
of this subsection (a), the Company shall:
(A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess, the
"Spread"), and
(B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price:
(1) cash,
(2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of
the Company (including, without limitation, shares, or units
of shares, of Preferred Stock that the Board of Directors of
the Company has deemed to have the same value as shares of
Common Stock (such shares of Preferred Stock being "common
stock equivalents")),
(4) debt securities of the Company,
(5) other assets, or
(6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of
Directors.
If the Company shall not have made adequate provision to deliver value pursuant
to subparagraph (B) of this paragraph (iii) within 30 days following the later
of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company's right of redemption pursuant to Section 23(a) expires (the
-------------
later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price, shares
of Common Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company determines in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek Stockholders approval
for the authorization of such additional shares (such period, as it may be
extended, the "Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e), that such action shall apply
-------------
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall be the current
market price (as determined pursuant to subsection (d)) per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common Stock on such
date.
(b) If the Company fixes a record date for the issuance of rights, options
or warrants to all holders of Common Stock entitling them to subscribe for or
purchase (for a period expiring within 45 calendar days after such record date)
Common Stock (or shares having the same rights, privileges and preferences as
the shares of Common Stock ("equivalent stock")) or securities convertible into
Common Stock or equivalent stock at a price per share of Common Stock or per
share of equivalent stock (or having a conversion price per share, if a security
convertible into Common Stock or equivalent stock) less than the current market
price (as determined pursuant to subsection (d)) per share of Common Stock on
such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
before such record date by a fraction, the numerator of which is the number of
shares of Common Stock outstanding on such record date, plus the number of
shares of Common Stock that the aggregate offering price of the total number of
shares of Common Stock and/or equivalent stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the denominator of
which shall be the number of shares of Common Stock outstanding on such record
date, plus the number of additional shares of Common Stock and/or equivalent
stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). If such subscription
price may be paid by delivery of consideration part or all of which may be in a
form other than cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Shares of Common Stock owned by
or held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. An adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date had not been
fixed.
(c) If the Company fixes a record date for a distribution to all holders of
Common Stock (including any distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in Common Stock, but including any dividend payable in stock other than
Common Stock) or subscription rights or warrants (excluding those referred to in
subsection (b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
the record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to subsection (d)) per share of Common
Stock on the 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
cash, assets or evidences of indebtedness so to be distributed or of the
subscription rights or warrants applicable to a share of Common Stock and the
denominator of which shall be the current market price (as determined pursuant
to subsection (d)) per share of Common Stock. Adjustments shall be made
successively whenever such a record date is fixed, and if the distribution is
not so made, the Purchase Price shall be adjusted to be the Purchase Price that
would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than computations
made pursuant to Section 11(a)(iii) and Section 24(c), the "current market
--------------
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of Common Stock for the 30 consecutive
Trading Days (as defined below) immediately prior to that date; for purposes of
computations made pursuant to Section 11(a)(iii), the "current market price" per
share of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of that Common Stock for the 10 consecutive Trading
Days immediately following that date; and for purposes of computations made
pursuant to Section 24(c), the "current market price" per share of Common Stock
-------------
shall be deemed to be the closing price per share of Common Stock on the Trading
Day immediately preceding the date of exchange pursuant to Section 24. If the
----------
current market price per share of Common Stock is determined during a period
following the announcement by the issuer of the Common Stock of:
(i) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such
Common Stock (other than the Rights), or
(ii) any subdivision, combination or reclassification of such Common
Stock;
and prior to the expiration of the requisite 30 Trading-Day or 10 Trading-Day
period, as set forth above, after the ex-dividend date for the dividend or
distribution, or the record date for the subdivision, combination or
reclassification, then, and in each such case, the "current market price" shall
be properly adjusted to take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities exchange, the
last quoted sale 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 shares of Common Stock are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Common Stock, the fair value of such shares on
such date as determined in good faith by the Board of Directors of the Company
shall be used. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(e) Notwithstanding anything in this Agreement to the contrary, no
adjustment in the Purchase Price shall be required unless the adjustment would
require an increase or decrease of at least 1% in the Purchase Price, but any
adjustments that by reason of this subsection (e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a share of Common Stock or other share, as the
case may be. Notwithstanding the first sentence of this subsection (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 that mandates
such adjustment, or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 13(a), the
--------------
holder of any Right thereafter exercised becomes entitled to receive any shares
of capital stock other than Common Stock, the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof 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 Common Stock
contained in subsections (a), (b), (c), (e), (g), (h), (i), (j), (k) and (m),
and Sections 7, 9, 10, 13 and 14 with respect to the Common Stock shall apply on
----------------------------
like terms to any such other shares.
(g) All Rights originally issued by the Company after any adjustment of the
Purchase Price shall evidence the right to purchase, at the adjusted Purchase
Price, the number of shares of Common Stock purchasable from time to time 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
subsection (i), upon each adjustment of the Purchase Price as a result of the
calculations made in subsections (b) and (c), each Right outstanding immediately
prior to the making of the adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares of Common Stock
(calculated to the nearest one-thousandth) obtained by:
(i) multiplying (x) the number of shares covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of shares of Common Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of shares of Common Stock for which a Right was
exercisable immediately prior to the adjustment. Each Right held of record prior
to the adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this subsection (i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14, the additional Rights to which the holders
----------
shall be entitled as a result of the adjustment, or, at the option of the
Company, shall cause to be distributed to the holders of record in substitution
and replacement for the Rights Certificates held by the holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which the holders shall be
entitled after the adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for in this Agreement
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Rights Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares that were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated or par value, if any, of the number of
shares of Common Stock issuable upon exercise of the Rights, the Company shall
take any corporate action that may, in the opinion of its counsel, be necessary
for the Company validly to issue fully paid and nonassessable shares of Common
Stock at the adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of that event the
issuance to the holder of any Right exercised after that record date the number
of shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of shares of
Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to the adjustment. In that case , the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing the holder's right to receive
such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring the 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 adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any:
(i) consolidation or subdivision of the Common Stock,
(ii) issuance wholly for cash of any shares of Common Stock at less
than the current market price,
(iii) issuance wholly for cash of shares of Common Stock or securities
that by their terms are convertible into or exchangeable for shares of Common
Stock,
(iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 11,
hereafter made by the Company to holders of its Common Stock shall not be
taxable to such Stockholders.
(n) The Company covenants and agrees that it will not, at any time after
the Distribution Date:
(i) consolidate with or merge with or into any other Person (other
than a Subsidiary of the Company in a transaction that complies with subsection
(o)), or
(ii) sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction, or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with subsection (o));
if:
(x) at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or
securities outstanding or agreements in effect that would substantially
diminish or otherwise eliminate the benefits intended to be afforded by
the Rights; or
(y) prior to, simultaneously with or immediately after such
consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) shall have received a distribution of Rights previously
-------------
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23 or Section 27, take (or permit any
------------------------
Subsidiary to take) any action if at the time the action is taken it is
reasonably foreseeable that the action will diminish substantially or eliminate
the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if the
Company at any time after the Declaration Date and before the Distribution Date:
(i) declares a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock,
(ii) subdivides the outstanding shares of Common Stock, or
(iii) combines the outstanding shares of Common Stock into a smaller
number of shares,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights associated
with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
--------------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 or Section 13 (other
------------------------
than adjustments occurring prior to the Distribution Date or any Triggering
Event), the Company shall:
(i) promptly prepare a certificate setting forth the adjustment and a brief
statement of the facts accounting for the adjustment,
(ii) promptly file with the Rights Agent, and with each transfer agent for
the Common Stock, a copy of the certificate, and
(iii) mail a brief summary thereof to each holder of a Rights Certificate
in accordance with Section 26.
Promptly after the Distribution Date or any Triggering Event, the Company shall
comply with the foregoing for any adjustment that occurred prior to the
Distribution Date or the Triggering Event. The Rights Agent shall be fully
protected in relying on any certificate delivered by the Company pursuant to
this Section 12 and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. ---------------------------------------------------------------
-----
(a) If, following the Stock Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge into, any
other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o)), and the Company shall not be the
--------------
continuing or surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o)) shall consolidate with,
--------------
or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of the consolidation or merger and,
in connection with the consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other
property, or
(z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one
or more transactions each of which and all of which comply with
Section 11(o));
--------------
then, and in each such case (except as contemplated by subsection (d)), proper
provision shall be made so that:
(i)each holder of a Right, except as provided in Section 7(e),
------------
shall thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the
Principal Party (as defined below), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims or
restrictions, as shall be equal to the result obtained by:
(1) multiplying the then current Purchase Price by the
number of shares of Common Stock for which a Right is exercisable immediately
prior to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such shares for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event by
the Purchase Price in effect immediately prior to such first occurrence) and
(2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of the current
market price (determined pursuant to Section 11(d)(i)) per share of the Common
-----------------
Stock of such Principal Party on the date of consummation of such Section 13
Event;
(ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 shall apply only to such Principal Party following the first
----------
occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and
(v) Section 11(a)(ii) shall be of no effect following the first
-----------------
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of subsection (a), the Person that is the issuer
of any securities into which shares of Common Stock of the Company are converted
in the merger or consolidation, and if no securities are so issued, the Person
that is the other party to the merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of subsection (a), the Person that receives the greatest portion
of the assets or earning power transferred pursuant to such
transaction or transactions;
In the case of either paragraph (i) or (ii) of this subsection (b):
(1) if the Common Stock of such Person is not at such time or has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly,
of more than one Person, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and the Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in subsections (a) and (b) and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in subsection (a), the Principal Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts to cause such
registration statement to:
(A) become effective as soon as practicable after
such filing, and
(B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration
Date; and
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates that comply in all respects
with the requirements for registration on Form 10 under the Exchange Act.
This Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers. If a Section 13 Event occurs at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights that have not theretofore
been exercised shall thereafter become exercisable in the manner described in
subsection (a), subject to Section 7(e).
------------
(d) Notwithstanding anything in this Agreement to the contrary, this
Section 13 shall not apply to a transaction described in clauses (x) and (y) of
the first sentence of subsection (a) if:
(i) the transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a Qualifying Offer (or a wholly
owned subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in the transaction is
not less than the highest price paid per share pursuant to the Qualifying Offer,
and
(iii) the form of consideration being offered to the remaining holders
of shares of Common Stock pursuant to the transaction is the same as the form
of consideration paid pursuant to the Qualifying Offer.
Upon consummation of a transaction contemplated by this subsection (d), all
Rights shall expire.
Section 14. Fractional Rights and Fractional Shares.
----------------------------------------
(a) The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(p), or to distribute
-------------
Rights Certificates that evidence fractional Rights. After the Distribution
Date, in lieu of fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this subsection (a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which the fractional Rights
would have been otherwise issuable. The closing price of the Rights 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 consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading, or if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by Nasdaq
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates that
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time the Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one share of
Common Stock. For purposes of this subsection (b), the current market value of
one share of Common Stock shall be the closing price of one share of Common
Stock (as determined pursuant to Section 11(d)) for the Trading Day immediately
--------------
prior to the date of exercise.
(c) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
------------------
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock). Any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights Agent
or of the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, on his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
-------------------------------
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for that purpose, duly endorsed
or accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f), the Company and the Rights
------------- -------------
Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agent) for all purposes, and neither the Company
nor the Rights Agent, subject to the last sentence of Section 7(e), shall be
-------------
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of such
obligation, but the Company shall use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No holder,
---------------------------------------------------
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of shares of Common Stock
or any other securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained in this
Agreement or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate have been exercised in accordance with the
provisions of this Agreement.
Section 18. Concerning the Rights Agent.
----------------------------
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, suit, action, proceeding or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
any action taken or suffered by the Rights Agent in connection with the
acceptance and administration of this Agreement and the exercise and performance
of its duties hereunder, including the costs and expenses of defending against
and appealing any claim of liability arising therefrom, directly or indirectly.
(b) 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
acceptance and administration of this Agreement or the exercise and performance
of its duties hereunder in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, instruction or other paper
or document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20.
-----------
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
----------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of either of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates in
this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent shall have only the
------------------------
duties and obligations expressly set forth in this Agreement. There shall be no
implied duties or obligations of the Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who may
be legal counsel for the Company), and the advice of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
advice.
(b) Whenever in the administration, exercise and performance of its duties
under this Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of any Acquiring
Person and the determination of "current market price") be proved or established
by the Company prior to taking, suffering or omitting any action hereunder, such
fact or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, any Vice Chairman of
the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and any such certificate shall be full authorization and
protection to the Rights Agent for any action taken, suffered or omitted in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall not be liable or responsible hereunder to the
Company except for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable or responsible for or by reason of
any of the representations, warranties, statements of fact or recitals contained
in this Agreement or in the Rights Certificates (except as to the fact that it
has countersigned the Rights Certificates) or be required to verify the same,
but all such representations, warranties, statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability or responsibility in
respect of the legality, validity or enforceability of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the legality, validity, enforceability or execution of
any Rights Certificate (except its countersignature thereof); nor shall it be
liable or responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it be liable
or responsible for any adjustment including, without limitation, as required
under the provisions of Section 11 or 13 (including any adjustment which results
----------------
in the Rights becoming void) or liable or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a notice or certificate
pursuant to Section 12 describing any such adjustment); nor shall it by any act
----------
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or other securities
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or other securities will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent or the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions or directions with respect to the administration of this Agreement
and the execution and performance of its duties hereunder and certificates
delivered pursuant to any provision hereof from the Chairman of the Board, any
Vice Chairman of the Board, the President, any Vice President, the Secretary,
any Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company, and is authorized to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable or responsible for any
action taken, suffered or omitted to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for such instructions.
(h) The Rights Agent and any Affiliate, shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though the Rights Agent were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such Affiliate, shareholder, director, officer or employee 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 liable or responsible
for any act, omission, default, neglect or misconduct of any such attorneys or
agents or for any loss or damages to the Company or to the holders of the Rights
resulting from any such act, omission, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment thereof.
The Rights Agent shall not be under any duty or responsibility to insure
compliance with any applicable federal or state securities laws in connection
with the issuance, transfer or exchange of the Rights Certificates.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise, transfer, split up, combination or exchange, the Certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise, transfer, split up, combination or
exchange without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
------------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' prior notice in writing mailed to the Company, and to each
transfer agent of the Common Stock, by registered or certified mail, and, after
the Distribution Date, to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' prior notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within 30
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then any
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the Commonwealth of Pennsylvania (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the Commonwealth of Pennsylvania), in good standing, having a
principal office in the Commonwealth of Pennsylvania, which is authorized under
such laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Rights 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 appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
------------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
this Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company:
(i) shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or warrants or under any employee
plan or arrangement, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and
(ii) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company;
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale. No such Rights Certificate shall be
issued if, and to the extent that, the Company shall be advised by counsel that
such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate would
be issued, or appropriate adjustment has otherwise been made in lieu of the
issuance thereof.
Section 23. Redemption and Termination.
---------------------------
(a) The Board of Directors of the Company may, at its option, at any time
before the earlier of:
(i) the close of business on the tenth day following the Stock
Acquisition Date, or
(ii) the Final Expiration Date;
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.05 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being referred to as the "Redemption Price").
Notwithstanding the foregoing, if the Board of Directors of the Company
authorizes redemption of the Rights in either of the circumstances set forth in
clauses (x) or (y) below, then there must be Continuing Directors then in office
and the authorization shall require the concurrence of a majority of such
Continuing Directors:
(x) the authorization occurs on or after the time a Person becomes
an Acquiring Person, or
(y) the authorization occurs on or after the date of a change
(resulting from a proxy or consent solicitation) in a majority of the directors
in office at the commencement of such solicitation if any Person who is a
participant in such solicitation has stated (or, if upon the commencement of
such solicitation, a majority of the Board of Directors of the Company has
determined in good faith) that such Person (or any of its Affiliates or
Associates) intends to take, or may consider taking, any action that would
result in such Person becoming an Acquiring Person or that would cause the
occurrence of a Triggering Event.
Notwithstanding anything in this Agreement to the contrary, the Rights shall not
be exercisable at any time when the Company may redeem them pursuant to this
Section 23. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the "current market price", as defined in
Section 11(d), of the Common Stock at the time of redemption) or any other form
-------------
of consideration deemed appropriate by the Board of Directors.
(b) At such time as specified in the resolution of the Board of Directors
ordering redemption of the Rights (or at such time as is determined by, a
committee of the Board of Directors authorized by the Board of Directors to
specify such time at the time of the board's adoption of such resolution or
immediately upon such action of the Board of Directors if the board does not
specify a date or so empower a committee) and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice 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.
Any failure to give or inadequacy of such notice shall not affect the validity
of the redemption. The Redemption Price shall be payable to those Persons who
are record holders of the Rights at the close of business on a date determined
by the Board of Directors, which date shall be at least eleven days after the
Board of Directors orders redemption of the Rights. Neither the Company nor any
of its Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time except:
(i) in the manner specifically set forth in this Section 23 or in
Section 24, or
----------
(ii) in connection with the purchase of Common Stock prior to
the Distribution Date.
Section 24. Exchange.
---------
(a) The Board of Directors of the Company may, at its option, at any time
and from time to time on or after a Section 11(a)(ii) Event, exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e)) for
--------------
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding shares of Common Stock for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock then outstanding. In the
event that there shall not be sufficient Common Stock issued but not outstanding
or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall use its best reasonable
efforts to take all such action as may be necessary to authorize additional
Common Stock for issuance upon exchange of the Rights.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange, but the failure to give, or any defect
in, such notice shall not affect the validity of the exchange. The Company
promptly shall mail a notice of any the exchange to all of the holders of 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 notice of exchange
shall state the method by which the exchange of the Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights that
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights that have become void pursuant to the
provisions of Section 7(e)) held by each holder of Rights.
-------------
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of Common Stock exchangeable for a Right:
(i) "common stock equivalents,"
(ii) cash,
(iii) debt securities of the Company,
(iv) other assets, or
(v) any combination of the foregoing, having an aggregate value
which a majority of the Continuing Directors and the Board of Directors of the
Company shall have determined in good faith to be equal to the current market
price of one share of Common Stock (determined pursuant to Section 11(d)).
--------------
Section 25. Notice of Certain Events.
-------------------------
(a) In case the Company shall propose, at any time after the Distribution
Date:
(i) to pay any dividend payable in stock of any class to the
holders of Common Stock, or
(ii) to offer to the holders of Common Stock rights or warrants
to subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or
(iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o)), or to effect any sale or other transfer (or to permit one
---------------
or more of its Subsidiaries to effect any sale or other transfer), in
one transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which and all of which comply
with Section 11(o)), or
--------------
(v) to effect the liquidation, dissolution or winding up of the
Company;
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26, a notice
----------
of the proposed action, which shall specify the record date for the purposes of
the stock dividend, distribution of rights or warrants, or the date on which the
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Common Stock for purposes of the action,
and in the case of any other action, at least 20 days prior to the date of the
taking of the proposed action or the date of participation therein by the
holders of the shares of Common Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case:
(i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26, a notice of the occurrence of such event, which shall specify the
----------
event and the consequences of the event to holders of Rights under
Section 11(a)(ii), and
-----------------
(ii) all references in subsection (a) to Common Stock shall be
deemed thereafter to refer to Common Stock and/or, if appropriate, other
securities.
Section 26. Notices. Notices or demands authorized by this Agreement to be
--------
given or made by the Rights Agent or by the holder of any Rights to or on the
Company shall be sufficiently given or made if and when sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
X.X. Xxxxxx Company
000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Secretary
Subject to Section 21, any notice or demand authorized by this Agreement to be
----------
given or made by the Company or by the holder of any Rights Certificate to or on
the Rights Agent shall be sufficiently given or made if and when sent by first
class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust 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 Rights Certificate (or, if
before the Distribution Date, to the holder of certificates representing shares
of Common Stock) shall be sufficiently given or made if and when sent by first
class mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments.
---------------------------
(a) Prior to the Distribution Date and subject to subsection (f), the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock.
(b) From and after the Distribution Date and subject to subsection (f), the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights in order:
(i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein that
may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder (which
lengthening or shortening, following the first occurrence of an event set forth
in clauses (i) or (ii) of the first sentence to Section 23(a), shall be
--------------
effective only if there are Continuing Directors and shall require the
concurrence of a majority of such Continuing Directors), or
(iv) to change or supplement the provisions hereunder in any manner
that the Company deems necessary or desirable and that does not adversely affect
the interests of the holders of Rights Certificates (other than any
Acquiring Person).
(c) This Agreement may not be supplemented or amended to lengthen, pursuant
to subsection (b)(iii):
(i) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable, or
(ii) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights.
(d) Without limiting the other provisions of this section, the Company may
at any time or from time to 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 1(i) to not less than 10%.
----------------------
(e) Upon the delivery of a certificate from an appropriate officer of the
Company stating that the proposed supplement or amendment is in compliance with
this Section 27, the Rights Agent shall execute such supplement or amendment.
(f) Notwithstanding anything in this Agreement to the contrary, no
supplement or amendment shall be made pursuant to this Section 27 that changes
the Redemption Price, the Final Expiration Date, the Purchase Price or the
number of shares of Common Stock for which a Right is exercisable.
(g) Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this Agreement
-----------
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc. For
-----------------------------------------------------------
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act as in effect on the date of this Agreement. The Board of
Directors of the Company (with, where specifically provided for herein, the
concurrence of the Continuing Directors) shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the board (with, where specifically provided for herein,
the concurrence of the Continuing Directors) or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to interpret this Agreement, and make
all determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (i) below, all omissions with
respect to the foregoing) that are done or made by the board (with, where
specifically provided for herein, the concurrence of the Continuing Directors)
in good faith, shall:
(i) be final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other parties, and
(ii) not subject the board or the Continuing Directors to any
liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
---------------------------
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 31. Severability. If any term of this Agreement is held by a court
-------------
of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; except that notwithstanding
anything in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be invalid, void
or unenforceable, and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement would
materially adversely affect the purpose or effect of this Agreement, the right
of redemption set forth in Section 23 shall be reinstated and shall not expire
until the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and each Rights
---------------
Certificate issued hereunder shall be governed by and interpreted and enforced
in accordance with the substantive laws of the Commonwealth of Pennsylvania,
without reference to the principles governing the conflict of laws applicable in
that or any other jurisdiction.
Section 33. Counterparts. This Agreement may be executed in any number of
-------------
counterparts, each which shall be an original, and all of which shall together
constitute a single instrument.
Section 34. Descriptive Headings. Descriptive headings of the provisions of
--------------------
this Agreement are inserted for convenience only and shall not affect the
meaning of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
X. X. XXXXXX COMPANY
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President and
Chief Financial Officer
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By: /s/ Xxxxxxx Xxxxxx
--------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R _____ Rights
NOT EXERCISABLE AFTER OCTOBER 24, 2016 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.O5 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.](1)
RIGHTS CERTIFICATE
X. X. XXXXXX COMPANY
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entities
the owner thereof, subject to the terms of the Rights Agreement dated as of
October 24, 2006 (the "Rights Agreement") between X. X. Xxxxxx Company, a
Pennsylvania corporation (the "Company"), and American Stock Transfer & Trust
Company, a New York corporation (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M. (Pittsburgh time) on October 24, 2016 at
the office or offices of the Rights Agent designated for such purpose, or its
successor as Rights Agent, one fully paid, non-assessable share of Class A
Common Stock of the Company ("Common Stock"), at a purchase price of $30.00 per
share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of shares that may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of October 24, 2006, based on the Common Stock as constituted at such
date.
Upon the occurrence of a Section 11(a)(ii) Event (as defined in the Rights
Agreement), if the Rights evidenced by this Rights Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
(1) The portion of the legend in brackets shall be inserted in the place of the
preceding sentence if applicable.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Common Stock or other securities that may be purchased upon
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the occurrence of certain events, including a
Triggering Event (as defined in the Rights Agreement).
This Rights Certificate is subject to the terms of the Rights Agreement,
which terms are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Common Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate is exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the Rights Agreement, the Rights evidenced by this Certificate
may be (i) redeemed by the Company at its option at a redemption price of $.05
per Right at any time prior to the earlier of the close of business on (A) the
tenth day following the Stock Acquisition Date (as such time period may be
extended pursuant to the Rights Agreement), and (B) the Final Expiration Date
(as defined in the Rights Agreement) or (ii) exchanged by the Company under
certain circumstances, at its option, in whole or in part, for one share of
Common Stock per Right (or, in certain cases, other securities, cash or assets
of the Company), subject in each case to adjustment in certain events as
provided in the Rights Agreement. Under certain circumstances set forth in the
Rights Agreement, the decision to redeem shall require the concurrence of a
majority of the Continuing Directors.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Common Stock or
of any other securities of the Company issuable upon the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
unless countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of
ATTEST: X. X. XXXXXX COMPANY
By: ____________________________ By:___________________________
Secretary Title:
Countersigned: AMERICAN STOCK TRANSFER
& TRUST COMPANY
By:___________________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder to transfer the Rights Certificate.)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein and
does hereby irrevocably constitute and appoint ____________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________ __, _____
-------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [_] is [_] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [_]
did [_] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:______________ ___, _____
-------------------------
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise Rights represented by the Rights
Certificate.)
To: X. X. Xxxxxx Company:
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Rights Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
------------------------------
Please insert social security
or other identifying number
------------------------------
------------------------------
------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
------------------------------
Please insert social security
or other identifying number
------------------------------
------------------------------
------------------------------
(Please print name and address)
Dated:_____________ ___, _____
------------------------------
Signature
Signature Guaranteed::
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [_] are [_] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [_]
did [_] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:_______________ __, ______
-------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular.
EXHIBIT B
SUMMARY OF RIGHTS
On October 24, 2006, the Board of Directors of X. X. Xxxxxx Company (the
"Company") declared a dividend distribution of one right (a "Right") for each
outstanding share of the Company's Common Stock, par value $0.01 per share
("Common Stock"), to shareholders of record at the close of business on May 15,
2007. Except as described below, each Right, when exercisable, entitles the
registered holder to purchase from the Company one share of Common Stock at a
purchase price of $30.00 (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 American Stock Transfer & Trust
Company, as Rights Agent. The following is a general description only and is
subject to the detailed terms and conditions of the Rights Agreement. A copy of
the Rights Agreement, including the form of Rights Certificate and the Summary
of Rights to be provided to shareholders of the Company, is being filed with the
Securities and Exchange Commission as an Exhibit to the Company's Registration
Statement on Form 8-A and is incorporated herein by reference.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons other
than the Company, its subsidiaries or any person receiving newly-issued shares
of Common Stock directly from the Company or indirectly via an underwriter in
connection with a public offering by the Company (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of Common Stock (the "Stock Acquisition Date"), or
(ii) 10 business days following the commencement of a tender offer or exchange
offer that would result in a person or group beneficially owning 20% or more of
such outstanding shares of Common Stock. Until the Distribution Date, (i) the
Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new Common
Stock certificates issued after May 15, 2007 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on October 24, 2016, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
If any person becomes an Acquiring Person other than pursuant to a
Qualifying Offer (as defined below), each holder of a Right will thereafter have
the right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
times the exercise price of the Right. The Rights Agreement contains an
exemption for any issuance of Common Stock by the Company directly to any person
(for example, in a private placement or an acquisition by the Company in which
Common Stock is used as consideration) or indirectly via an underwriter in
connection with a public offering by the Company, even if that person would
become the beneficial owner of 20% or more of the outstanding Common Stock,
provided that such person does not acquire any additional shares of Common
Stock. Notwithstanding any of the foregoing, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void. However, Rights are not
exercisable in any event until such time as the Rights are no longer redeemable
by the Company as set forth below.
A "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the Continuing Directors (as defined below) who are not
officers or employees of the Company and who are not related (as specified in
the Rights Agreement) to the Person making such offer, to be fair to and in the
best interests of the Company and its shareholders.
If at any time following the Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction in which the
Common Stock is changed or exchanged or in which the Company is not the
surviving corporation (other than a merger that follows a Qualifying Offer and
satisfies certain other requirements), or (ii) 50% or more of the Company's
assets or earning power is sold or transferred, each holder of a Right (except
Rights that have been previously voided as set forth above) shall thereafter
have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the Right. The events
set forth in this paragraph and in the second preceding paragraph are referred
to as the "Triggering Events."
The Purchase Price payable, and the number of shares of Common Stock 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 Common
Stock, (ii) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.05 per
Right (payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority of
the Continuing Directors. Immediately upon the action of the Board of Directors
ordering redemption of the Rights or at such other time as may be specified by
the Board when it orders redemption, with, where required, the concurrence of a
majority of the Continuing Directors, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.05 redemption price.
The term "Continuing Directors" means any member of the Board of Directors
of the Company who was a member of the Board prior to the Stock Acquisition
Date, and any person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person, or an affiliate or associate of an Acquiring
Person, or any representative of the foregoing entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income if the Rights become exercisable for
Common Stock (or other consideration) of the Company or for common stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors) in order to
cure any ambiguity, to make changes that do not adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at a time when the Rights are not redeemable.
As of October 24, 2006, there were 10,520,245 shares of Common Stock
outstanding and 727,000 shares of Common Stock reserved for issuance under
outstanding options to purchase Common Stock. Each outstanding share of Common
Stock at the close of business on May 15, 2007 will receive one Right. In
addition, Rights shall be issued in respect of all shares of Common Stock that
are issued (whether originally issued or from the Company's treasury) after that
date but prior to the earlier of the Distribution Date or the Expiration Date
and, in certain circumstances as provided in the Rights Agreement, after the
Distribution Date.
