MET-PRO CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
Rights Agent
RIGHTS AGREEMENT
Dated as of January 6, 2000
TABLE OF CONTENTS
Section 1. Certain Definitions................................................................................. 1
Section 2. Appointment of Rights Agent......................................................................... 5
Section 3. Issuance of Rights Certificates..................................................................... 5
Section 4. Form of Rights Certificates......................................................................... 7
Section 5. Countersignature and Registration................................................................... 8
Section 6. Transfer, Split Up, Combination and Exchange of Rights.............................................. 8
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates........................................................................... 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................... 9
Section 8. Cancellation and Destruction of Rights Certificates.................................................11
Section 9. Availability of Common Stock........................................................................11
Section 10. Common Stock Record Date............................................................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares of Number of Rights.........................13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.........................................20
Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or Earning Power.....................20
Section 14. Fractional Rights and Fractional Shares.............................................................22
Section 15. Rights of Action....................................................................................23
Section 16. Agreement of Rights Holders.........................................................................24
Section 17. Rights Certificate Holder Not Deemed a Stockholder..................................................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..........................................................................................33
Section 29. Determinations and Actions by the Board of Directors, etc..........................................33
Section 30. Benefits of this Agreement..........................................................................34
Section 31. Severability........................................................................................34
Section 32. Governing Law.......................................................................................34
Section 33. Counterparts........................................................................................34
Section 34. Descriptive Headings................................................................................34
EXHIBITS
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 6, 2000 (the "Agreement"), between
MET-PRO CORPORATION, a Delaware corporation (the "Company"), and AMERICAN STOCK
TRANSFER & TRUST COMPANY (the "Rights Agent").
____________________________
On January 6, 2000 (the "Rights Dividend Declaration Date") the Board of
Directors of the Company authorized and declared a dividend distribution of one
Right (as hereinafter defined) for each share of Common Stock outstanding as of
the close of business on January 14, 2000 (the "Record Date"), and authorized
the issuance of one Right for each share of Common Stock issued (whether as an
original issuance or from the Company's treasury) between the Record Date and
the earliest of the Distribution Date or the Expiration Date (as such terms are
hereinafter defined), each Right initially representing the right to purchase
one share of Common Stock of the Company upon the terms and subject to the
conditions hereinafter set forth (the "Rights").
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% (fifteen
percent) or more of the Common Stock of the Company then outstanding, but
shall not include the Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity holding Common Stock for or
pursuant to the terms of any such plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an acquisition
of Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% (fifteen percent) or more of the Common Stock
of the Company then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 15% (fifteen percent) or more of the Common
Stock of the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Stock of the Company, then such
Person shall be deemed to be an "Acquiring Person."
(b) "Adjustment Shares" shall have the meaning specified in Section
11(a)(ii) hereof.
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(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, beneficially owns (as determined
pursuant to Rule 13d-3 under the Exchange Act, as in effect on the
date of this Agreement);
(ii) which such Person or any of such Person's Affiliates or
Associates has:
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the
satisfaction of any conditions or both) pursuant to any
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange; or
(B) the right to vote (whether such right is exercisable
immediately or only after the passage of time or upon the
satisfaction of any conditions or both) pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(d)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference
to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued
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and outstanding which such Person would be deemed to own beneficially
hereunder.
(e) "Business Day" shall mean 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 any given date shall mean 5:00. P.M.,
Philadelphia time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Philadelphia time, on the next
succeeding Business Day.
(g) "Closing Price" shall mean for each day the last sale price or, in
case no such sale takes place on such day, the average of the closing bid
and asked prices, 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 securities in question
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 securities in question are listed or admitted to trading or,
if the securities in question are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system then in use, or,
if on any such date the securities in question are not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker selected by the Board of Directors of the
Company and making a market in the securities in question. If on any such
date no market maker is making a market in the securities in question, the
fair value of such securities on such date as determined in good faith by
the Board of Directors of the Company shall be used. If the securities in
question are not publicly held or not as 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.
(h) "Common Stock" shall mean the common stock, par value $.10 per
share, of the Company.
(i) "common stock equivalents" shall have the meaning specified in
Section 11(a)(iii) hereof.
(j) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(k) "Distribution Date" shall mean the earlier of
(i) the first Business Day (or such later date as may be
determined by outstanding action of the Board of Directors of the
Company prior to such time as any Person becomes an Acquiring Person)
after the Stock Acquisition Date, or
(ii) the first Business Day (or such later date as may be
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determined by outstanding action of the Board of Directors of the
Company prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement 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 entity holding
Common Stock for or pursuant to the terms of any such plan) of, or the
first public announcement of the intention of 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 entity
holding Common Stock for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would
result in any Person becoming the Beneficial Owner of Common Stock
aggregating 15% (fifteen percent) or more of the then Common Stock
(including any such date which is after the date of this Agreement and
prior to the issuance of the Rights).
(l) "Expiration Date" shall mean the earliest of (i) the close of
business on the 10th (tenth) anniversary of the Record Date (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof or (iii) the time at which the Rights are
exchanged pursuant to Section 24 hereof.
(m) "Person" shall mean any individual, firm, corporation, limited
liability company, partnership or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(n) "Principal Party" shall have the meaning specified in Section
13(b) hereof.
(o) "Purchase Price" shall have the meaning specified in Section 4(a)
and Section 7(b) hereof, as modified by Section 13(a) hereof.
(p) "Redemption Price" shall have the meaning specified in Section
23(a) hereof.
(q) "Rights Certificates" shall have the meaning specified in Section
3(a) hereof.
(r) "Securities Act" shall have the meaning specified in Section 9(d)
hereof.
(s) "Section 11(a)(ii) Event" shall have the meaning specified in
Section 11(a)(ii) hereof.
(t) "Section 11(a)(ii) Trigger Date" shall have the meaning specified
in Section 11(a)(iii) hereof.
(u) "Section 13 Event" shall have the meaning specified in Section
13(a) hereof.
(v) "Spread" shall have the meaning specified in Section 11(a)(iii)
hereof.
(w) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed or amended pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
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(x) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or
indirectly, by such Person or any entity otherwise controlled by such
Person.
(y) "Substitution Period" shall have the meaning specified in Section
11(a)(iii) hereof.
(z) "Summary of Rights" shall have the meaning specified in Section
3(b) hereof.
(aa) "Trading Day" shall mean a day on which the principal national
securities exchange on which the securities in question are listed or
admitted to trading is open for the transaction of business or, if such
securities are not listed or admitted to trading on any national securities
exchange, a Business Day.
(bb) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall, prior to the Distribution Date, also be the holders of the Common Stock)
in accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable, upon ten days prior
written notice to the Rights Agent. In the event the Company appoints one or
more co-Rights Agents, the respective duties of the Rights Agent and any
co-Rights Agents shall be as the Company shall determine.
Section 3. Issuance of Rights Certificates.
(a) Until the Distribution Date, the Rights will be evidenced 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 the
Rights will be transferred with and only 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 mail, insured, postage prepaid, to each record holder of the
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit A hereto (the
"Rights Certificates"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 11(a)(i) hereof, at the time of distribution of the
Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed, and cash is paid in lieu of any fractional Rights. As of and
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after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) 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, upon the written request of
any holder of Common Stock, as of the close of business on the Record Date,
at the address of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of the Record
Date or issued subsequent to the Record Date, until the Distribution Date,
the Rights will be evidenced by such 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, 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 such shares of
Common Stock.
(c) Subject to Section 22 hereof, Rights shall be issued in respect of
all shares of Common Stock which are outstanding on the Record Date and
which 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. Certificates representing such 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 Met-Pro Corporation and the
Rights Agent thereunder (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
offices of Met-Pro Corporation. 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. Met-Pro Corporation 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 any Person who becomes an Acquiring Person (as defined in the
Rights Agreement) shall become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Stock represented
by such certificates shall be evidenced by such certificates alone and the
registered holders of Common Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates. In the event that the Company purchases or
acquires any shares of Common Stock after the Record Date but prior to the
Distribution Date and does not subsequently reissue such shares, any Rights
associated with such shares shall be deemed to be canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with such
shares which are no longer outstanding as of the Distribution Date; provided,
however, that such Rights shall not be deemed to be cancelled and retired as to
such shares that the Company, subsequent to such purchase or acquisition, shall
reissue and which shall be outstanding as of the Distribution Date.
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Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall each
be substantially in the form set forth in Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase such
number of shares of Common Stock as shall be set forth therein at the price
set forth in Section 7(b) hereof (such exercise price, the "Purchase
Price"), but the number of such shares that may be purchased upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a), Section
11(i) or Section 22 hereof that represents Rights beneficially owned by:
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any Associate or
Affiliate of such Acquiring Person) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any Associate or Affiliate of such 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 such Acquiring Person or to any Person with whom such Acquiring Person
has any agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board of
Directors has determined is part of a plan, arrangement or understanding
(whether or not in writing) which has as a primary purpose or effect
avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in
this sentence, shall (to the extent feasible) contain 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 shall become null and void in the circumstances specified in Section 7(e)
of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its President or
its Vice President- Finance either manually or by facsimile signature, and
shall be attested by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer of the Company, either manually or by
facsimile signature. The Rights Certificates shall not be valid for any
purpose unless countersigned by the Rights Agent. In case any officer of
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the Company who shall have signed any of the Rights Certificates shall
cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights Agent, and
issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be
such officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who holds any such office at the actual
date of the execution of 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 Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Rights Certificates (other than
Rights Certificates representing Rights that have been exchanged pursuant
to Section 24 hereof), may be transferred, split up, combined or exchanged
for another Rights Certificate or Rights Certificates, entitling the
registered holder to purchase a like number of shares of Common Stock (or,
following a Triggering Event, Common Stock, cash, property, debt securities
or other assets, or any combination thereof, as the case may be) as the
Rights Certificate or Rights 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 Rights Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer, split up, combination or exchange of any such
surrendered Rights Certificate until the registered holder thereof shall
have completed and signed the form of assignment and related certificate on
the reverse side of such 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 Section
4(b), Section 7(e), Section 14 and Section 24 hereof, 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
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mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions
on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section
23(a) hereof) 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 related certificate on the reverse side thereof duly executed,
to the Rights Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate
Purchase Price for the total number of shares of Common Stock (or cash,
property, debt securities or other assets, or any combination thereof, as
the case may be) as to which such surrendered Rights are then exercisable,
at or prior to the Expiration Date.
(b) On its face, each Rights Certificate shall entitle the holders
thereof to purchase, for each Right, one share of Common Stock, or other
securities or property as provided herein, at the price per share of $50.00
(fifty dollars) (the "Purchase Price"); provided, however, that the
Purchase Price and the number of shares of Common Stock or other securities
or consideration to be acquired upon exercise of a Right shall be subject
to adjustment as provided in Sections 11 and 13(a) hereof. The Purchase
Price shall be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and related certificate duly
executed, accompanied by payment with respect to each Right as exercised,
of the Purchase Price per share of Common Stock (or cash, property, equity
or debt securities or other assets, or any combination thereof, as the case
may be) to be purchased and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(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 such
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 such 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) when appropriate,
requisition from the Company the amount of cash, if any, to be paid in lieu
of fractional shares in accordance with Section 14 hereof, (iii) promptly
after receipt of such certificates or depositary receipts, cause the same
to be delivered to or, upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated
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by such holder, and (iv) when appropriate, after receipt thereof, promptly
deliver such cash, if any, to or upon the order of the registered holder of
such Rights Certificate. In the event that the Company is obligated to
issue other securities (including Common Stock) of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise 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 the
registered holder of such Rights Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(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 of any
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 of any such 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 such Acquiring Person or to any Person
with whom the Acquiring Person has any agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(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 any provision of this
Agreement or otherwise from and after such occurrence. The Company shall
use all reasonable efforts to insure that the provisions of this Section
7(e) and Section 4(b) hereof are complied with, but shall have no liability
to any holder of Rights Certificates or any 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 of any of them.
(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 such 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) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
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split up, combination or exchange shall, if surrendered to the Company or any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Availability of Common Stock.
(a) In the event that there shall not be a sufficient number of shares
of Common Stock authorized but unissued to permit the exercise or exchange
of Rights in accordance with Section 11, the Company covenants and agrees
that it will take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon the exercise or
exchange of Rights pursuant to Section 11; provided, however, that if the
Company is unable to cause the authorization of additional shares of Common
Stock, then the Company shall, or in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, either, in its sole discretion
(A) effect a reverse stock split (which shall result in an adjustment to
the Purchase Price under the provisions of Section 11(a)(i) hereof and
which shall otherwise be subject to Section 11 (a)(i), notwithstanding any
provision of such Section 11(a)(i) limiting such adjustments and its
application to events occurring prior to the Distribution Date), (B) upon
surrender of a Right, pay cash equal to the Purchase Price in lieu of
issuing shares of Common Stock and requiring payment therefor, (C) upon due
exercise of a Right and payment of the Purchase Price for each share of
Common Stock as to which such Right is exercised, issue equity and/or debt
securities having a value equal to the value of the shares of Common Stock
which otherwise would have been issuable pursuant to Section 11, which
value shall be determined by a nationally recognized investment banking
firm selected by the Board of Directors of the Company or (D) upon due
exercise of a Right and payment of the Purchase Price for each share of
Common Stock as to which such Right is exercised, distribute a combination
of shares of Common Stock, cash and/or other equity and/or debt securities
having an aggregate value equal to the value of the shares of Common Stock
which otherwise would have been issuable pursuant to Section 11, which
value shall be determined by a nationally recognized investment banking
firm selected by the Board of Directors of the Company. To the extent that
any legal or contractual restrictions (pursuant to agreements or
instruments in effect prior to the Distribution Date to which it is party)
prevent the Company from paying the full amount payable in accordance with
the foregoing sentence, the Company shall pay to holders of the Rights as
to which such payments are being made all amounts which are not then
restricted on a pro rata basis as such payments become permissible under
such legal or contractual restrictions until such payments have been paid
in full.
(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 automated quotation system, the Company
shall use its best efforts to cause, from and after such time as the Rights
-11-
become exercisable, all shares of Common Stock issued or reserved for such
issuance to be so listed, upon official notice of issuance, on the
principal national securities exchange, if any, on which the Common Stock
is otherwise listed or, if the principal market for the Common Stock is not
on any national securities exchange, to be eligible for quotation on the
NASDAQ National Market or any successor thereto or other comparable
quotation system.
(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 on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or, if required by law, the Distribution Date, a
registration statement (a "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such Registration Statement to become effective as soon as
practicable after such filing, and (iii) cause such Registration Statement
to remain effective (with a prospectus at all times meeting the
requirements of the Securities 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 a period of time not
to exceed ninety (90) days after the date set forth in clause (i) of the
first sentence of this Section 9(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 each case with prompt written notice
to the Rights Agent. 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.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification
in such 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 covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Common Stock delivered
upon exercise of the 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) From and after the Distribution Date, the Company further
covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Rights Certificates and of any
certificates for Common Stock and/or other securities, as the case may be,
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax which may be payable in respect of any transfer or
delivery of 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
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respect of a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for transfer or 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 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 the shares of
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 such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided, however,
that if the date of such 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, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the 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 stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares of 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) In the event the Company shall at any time after the date of
this Agreement and prior to the Distribution Date (A) declare a
dividend on the Common Stock payable in shares of Common Stock, (B)
subdivide the outstanding Common Stock, (C) combine the outstanding
Common Stock into a smaller number of shares, or (D) issue 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 Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive the aggregate number and
kind of shares of capital stock which, 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, such holder would have
owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon
exercise of a Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of a right. If
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an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
(ii) Subject to Sections 23 and 24 of this Agreement, in the
event (a "Section 11(a)(ii) Event") any Person (other than an employee
benefit plan 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) shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring Person, 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)
hereof) shall thereafter have the right to receive, upon exercise
thereof and payment of the then current Purchase Price in accordance
with the terms of 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 by fifty percent (50%) of the current market price
(determined pursuant to Section 11(d) hereof) per share of Common
Stock on the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
which is authorized by the Company's Restated 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 subparagraph (ii) of this Section 11(a) notwithstanding the
Company's declaration of a reverse stock split under Section 9 (a)(A)
hereof or in the event of the Company's determination not to declare
such a reverse stock split, 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
(subject to Section 7(e) hereof), make adequate provision to
substitute for the Adjustment Shares, upon the exercise of a Right and
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 (referred to herein as "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
(less the amount of any reduction in the Purchase Price), 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 of the Company;
provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty
(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 shall
determine 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 thirty (30) day period set forth above may
-14-
be extended to the extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended,
referred to herein as the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the
first and/or second sentence of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, 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 such stockholder approval for
such authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first
sentence 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 each Adjustment Share shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of the Common
Stock on the Section 11(a)(ii) Trigger Date and the per share or per
unit value of any common stock equivalent shall be deemed to equal the
current market price (as so determined) per share of the Common Stock
on such date.
(b) If the Company shall fix 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 forty-five (45)
calendar days after such record date) Common Stock or common stock
equivalents, or securities convertible into Common Stock or common stock
equivalents, at a price per share of Common Stock or per share of common
stock equivalents (or having a conversion price per share, if a security
convertible into Common Stock or common stock equivalents) less than the
current market price (as determined pursuant to Section 11(d) hereof) 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 prior to such record date by a
fraction, the numerator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares of
Common Stock and/or common stock equivalents to be offered (and/or the
aggregate initial conversion price of the convertible securities 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
common stock equivalents to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the consideration
to be paid upon the exercise of a Right be less than the aggregate par
value of the shares of capital stock of the Company issuable upon exercise
of a Right. In case 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; provided, however, that if at
the time of such determination there exists an Acquiring Person, the
current market value of such consideration on such date shall be determined
by a nationally recognized investment banking firm selected by the Board of
Directors, which determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders
-15-
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. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for a distribution to all
holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly or other expected periodic cash dividend out of the
earnings or retained earnings of the Company or, following the Distribution
Date, a dividend not out of the earnings or retained earnings of the
Company unless the Board at such time shall determine not to include such a
dividend within the exception provided for by this parenthetical), 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 Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share of
Common Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such convertible securities, subscription rights or
warrants applicable to each share of Common Stock and the denominator of
which shall be such current market price (as determined pursuant to Section
11(d) hereof) per share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall be adjusted to
be the Purchase Price which would have been in effect if such record date
had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current
market price" per share of any security (a "Security", for purposes of this
Section 11(d)(i)) on any date shall be deemed to be the average of the
daily Closing Prices per share of such Security for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes
of computations made pursuant to Section 11(a)(iii) hereof, the "current
market price" per share of the Security on any date shall be deemed to be
the average of the daily Closing Prices per share of such Common Stock for
the ten (10) consecutive Trading Days immediately following such date;
provided, however, that in the event that the current market price per
share of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or
securities convertible into shares of such shares (other than the Rights),
or (B) any subdivision, combination or reclassification of such Security,
and prior to the expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, after the ex- dividend date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the "current
market price" shall be properly adjusted to take into account ex-dividend
trading.
(ii) For the purpose of any computation hereunder, the "current
-16-
market price" per share of Common Stock shall be determined in the
same manner as set forth in Section 11(d)(i) hereof. If the current
market price per share of Common Stock cannot be determined in the
manner provided above or if the Common Stock is not publicly held or
listed or traded in a manner described in subsection (g) of Section 1
hereof, the "current market price" per share of Common Stock 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; provided, however, that if at the time of such
determination there exists an Acquiring Person, the "current market
value" of the Common Stock on such date shall be determined by a
nationally recognized investment banking firm selected by the Board of
Directors, which 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.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a
share of Common Stock or other security, as the case may be, or to such
other figure as the Board of Directors may deem appropriate.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Common
Stock, thereafter 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 Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) hereof,
and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Common Stock shall apply on like terms to any such other shares;
provided, however, that the Company shall not be liable for its inability
to reserve and keep available for issuance upon exercise of the Rights
pursuant to Section 11(a)(ii) a number of shares of Common Stock greater
than the number then authorized by the Restated Certificate of
Incorporation of the Company but not outstanding or reserved for other
purposes.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common
Stock purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of shares of Common Stock (calculated to the nearest ten- thousandth)
obtained by (i) multiplying (x) the number of shares of Common Stock for
-17-
which a Right may be exercised 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 as obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of 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 such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates to be so distributed
shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of 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
which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value attributable to the number of
shares of Common Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date of the number of shares of Common Stock and other capital stock
-18-
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 such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such
additional shares or securities upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that the Board of Directors of the Company, in its good faith
judgment, 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
which 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 shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other
than a consolidation with a Subsidiary of the Company in a transaction
which does not violate the provisions of Section 11(o) hereof), (ii) merge
with or into any other Person (other than a merger with a Subsidiary of the
Company in a transaction which does not violate the provisions of Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction or a series of related transactions,
assets, earning power or cash flow aggregating fifty percent (50%) or more
of the assets, earning power or cash flow of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than
a sale or transfer to the Company and/or any of its Subsidiaries in one or
more transactions each of which does not violate the provisions of Section
11(o) hereof), 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 which 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 stockholders of the Person
who constitute, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof 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 earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) The exercise of Rights under Section 11(a)(ii) shall only result
in the loss of rights under Section 11(a)(ii) to the extent so exercised
and shall not otherwise affect the rights of holders of Rights Certificates
under this Agreement, including rights to purchase securities of the
Principal Party following a Section 13 Event which has occurred or may
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thereafter occur, as set forth in Section 13 hereof. Upon exercise of a
Rights Certificate under Section 11(a)(ii), the Rights Agent shall return
such Rights Certificate duly marked to indicate that such exercise has
occurred.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Rights Certificate in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or
Earning Power.
(a) In the event (a "Section 13(a) Event") that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), 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 which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall
be the continuing or surviving corporation of such consolidation or merger
and, in connection with such 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, earning power or
cash flow aggregating fifty percent (50%) or more of the assets, earning
power or cash flow 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 complies with Section
11(o) hereof), then, and in each such case, proper provision shall be made
so that: (i) each holder of a Right (other than Rights that heretofore
became null and void pursuant to Section 7(e) hereof) shall thereafter have
the right to receive, upon the exercise thereof and payment of the then
current Purchase Price in accordance with the terms of this Agreement (or,
if any Section 11(a)(ii) event has occurred prior to the first occurrence
of a Section 13(a) Event, at the Purchase Price in effect immediately prior
to the first occurrence of a Section 11(a)(ii) event), such number of
validly authorized and issued, fully paid, non-assessable and freely
tradable shares of common stock of the Principal Party (as such term is
hereinafter defined), free and clear of any liens, encumbrances, rights of
first refusal or other adverse claims, 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 shares of Common Stock 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
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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
fifty percent (50%) of the current market price (determined pursuant to
Section 11(d)(i) hereof) 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 hereof 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) the provisions of Section 11(a) (ii) hereof 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 Section 13(a) hereof, the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are as issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets, earning power or
cash flow transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the common stock of
such Person is not, at such time and has not been continuously over
the preceding twelve (12) month period, registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect Subsidiary
or Affiliate of another Person 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 or Affiliate,
directly or indirectly, of more than one Person, the common stock of
two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the
common stock having the greatest aggregate market value and (z) in
case such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (x) and (y)
above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a "Subsidiary" of
both or all of such ventures and the Principal Parties in each such
chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear
to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have sufficient
authorized and unissued shares of common stock not reserved for other
purposes to permit the full exercise of the Rights in accordance with this
Section 13, and unless prior thereto the Company and each Principal Party
(and any Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer) shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set
forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation, merger,
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sale or transfer of assets mentioned in paragraph (a) of this Section 13,
the Principal Party, at its own expense, will:
(i) prepare and file a Registration Statement under the
Securities 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 Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility
requirements for quotation on the NASDAQ National Market; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.
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(a) hereof,
or to distribute Rights Certificates which evidence fractional Rights. If
the Company elects not to issue fractional rights, then in lieu of such
fractional Rights, the Company shall pay to the registered holders of the
Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a),
the current market value of a whole Right shall be the Closing Price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The Closing Price of
the Rights for any day shall be the last sale price, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, 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
-22-
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not as 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
which 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 such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
price of one share of Common Stock. For purposes of this Section 14(b), the
current market price of one share of Common Stock shall be as determined
pursuant to Section 11(d)(ii) hereof for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which 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 such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market price of one share of Common
Stock. For purposes of this Section 14(c), the current market price of one
share of Common Stock shall be the Closing Price of one share of Common
Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right, by the acceptance of such Right, expressly
waives such holder's 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, other than rights of
action vested in the Rights Agent pursuant to Sections 18 and 20 of this
Agreement, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, the registered holders 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, the registered holders of the Common
Stock), may, in such holder's behalf and for such holder's benefit, enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights evidenced by such Rights Certificate (or, prior to the Distribution Date,
certificates for Common Stock) in the manner provided in such Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies available
-23-
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement. Holders of Rights shall be
entitled to recover from the Company the reasonable costs and expenses,
including attorneys' fees, incurred by them in any action to enforce the
provisions 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 of the Rights Agent designated for such 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) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, 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; provided, however,
the Company must 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 Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights evidenced by either a certificate for Common Stock or by
-24-
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such certificate for Common Stock or Rights Certificate, as the
case may be, shall have been exercised in accordance with the provisions hereof.
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,
or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of
this Agreement, including the reasonable costs and expenses of defending
against any claim of liability arising directly or indirectly therefrom.
(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 administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document reasonably believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
(c) The Rights Agent shall not be liable for consequential damages
under any provision of this Agreement or for any consequential damages
arising out of any act or failure to act hereunder.
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 stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto; provided,
however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case
at the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
-25-
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 and 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 undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel selected by it
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or any
Affiliate or Associate thereof and the determination of "current market
price") be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman
of the Board, the Chief Executive Officer, the President, the Vice
President-Finance , the Treasurer, any Assistant Treasurer, the Secretary
or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
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of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11, Section 13 or Section 24
hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock 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 for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the Chief Executive Officer, the President, the
Vice President-Finance, or the Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it
in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; provided, however, reasonable
care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
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Rights Agent for exercise or 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 or
transfer without first consulting with the Company.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days' notice in writing
mailed to the Company by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, by registered
or certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
(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 such holder's 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)
a corporation or other legal business entity organized and doing business under
the laws of the United States or of any state thereof, in good standing, which
is authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a
corporation or other legal business entity described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and the transfer agent of the Common Stock,
and mail a notice thereof in writing to the registered holders of the Rights
Certificates or, if prior to the Distribution Date, to the registered holders of
Common Stock. 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.
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Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
Certificates to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board of
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement. 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 (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of securities
issued by the Company hereinafter but prior to the Distribution Date, and (b)
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; provided, however,
that (i) 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, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have 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 on or before such time that any Person shall become an Acquiring
Person, redeem all but not less than all the then outstanding Rights at a
redemption price of $.0001 (one one-hundredth of a cent) 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 hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be made
effective at such time, and on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
If, following the occurrence of a Stock Acquisition Date and following
the expiration of the right of redemption hereunder but prior to the
occurrence of any event specified in Section 13 hereof, (A) a Person who is
an Acquiring Person shall have transferred or otherwise disposed of a
number of shares of Common Stock in one transaction or series of
transactions, not directly or indirectly involving the Company or any of
its Subsidiaries, which did not result in the occurrence of any event
specified in Section 13 hereof such that such Person is thereafter a
Beneficial Owner of 10% or less of the outstanding Common Stock and (B)
there are no other Persons, immediately following the occurrence of the
event described in clause (A) of this sentence, who are Acquiring Persons,
then the right of redemption shall be reinstated and thereafter be subject
to the provisions of this Section 23. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable after
the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company may, at
its option, pay the Redemption Price in cash, shares of Common Stock (based
-29-
on the "current market price," as defined in Section 11(d)(i) hereof, of
the Common Stock at the time of redemption) or any other form of
consideration, or any combination of any of the foregoing, deemed
appropriate by the Board of Directors of the Company.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have
been furnished to the Rights Agent and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price 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 which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
(c) Notwithstanding anything herein to the contrary, the Board of
Directors of the Company shall also have the authority to redeem the Rights
after a Person shall have become an Acquiring Person if such Person shall
(x) certify in writing to the Board of Directors, no later than five (5)
days of the date of such Person having become an Acquiring Person or, if
later, no later than five (5) days after the Company shall be advised that
such Person shall have become an Acquiring Person, to the satisfaction of
the Board in its sole discretion, that such Person became an Acquiring
Person without knowledge of the terms of the Rights and (y) no later than
five (5) days after such certification, such Person, together with all
Affiliates and Associates, shall cease to be the Beneficial Owner of 15% or
more of the Common Stock of the Company then outstanding as a result of the
disposition of shares of Common Stock.
(d) The Company may, at its option, discharge all of its obligations
with respect to the Rights by (x) issuing a press release announcing the
manner of the redemption of the Rights in accordance with this Agreement
and (y) mailing payment of the Redemption Price to the registered holders
of the Rights at their last addresses as they appear on the registry books
of the Rights Agent, or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the shares of Common Stock, and upon such
action, all outstanding Rights and Rights Certificates shall be null and
void without any further action by the Company.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof)
for 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 of the Company shall not be empowered to
-30-
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 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 fifty percent (50%) or more of
the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Company. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) 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 take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares of Common Stock, there
shall be paid to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the current
market value of a whole share of Common Stock. For the purposes of this
subsection (e), the current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, 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 to make any other distribution to the
holders of Common Stock (other than a regular quarterly or other expected
periodic cash dividend out of earnings or retained earnings of the Company,
including the initiation thereof), 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
-31-
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 which complies
with Section 11(o) hereof), 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 fifty
percent (50%) or more of the assets, earning power or cash flow 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 Section 11(o) hereof), (v) to
effect the liquidation, dissolution or winding up of the Company, or (vi)
to declare or pay any dividend on the Common Stock payable in Common Stock
or to effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in
Common Stock), then, in each such case, the Company shall give to each
holder of a Rights Certificate and to the Rights Agent, to the extent
feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of 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 twenty (20) days
prior to the record date for determining holders of the shares of Common
Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of 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 and to the Rights Agent, to the extent
feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificates to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Met-Pro Corporation
000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificates to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
-32-
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
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
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments.
Prior to the Distribution Date, 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. From and after the Distribution Date, 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 Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, (iii)
to shorten or lengthen any time period hereunder or (iv) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Rights Certificates; provided, from and after the Distribution Date, this
Agreement may not be supplemented or amended to lengthen any time period
hereunder pursuant to clause (iii) of this sentence unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. 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. Notwithstanding anything contained herein to the
contrary, this Agreement may not be amended at a time when the Rights are not
redeemable.
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 rules promulgated under the
Exchange Act as in effect on the date hereof. The Board of Directors of the
-33-
Company shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Company, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable or 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 (ii)
below, all omissions with respect to the foregoing) which are done or made by
the Board of Directors of the Company 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 of Directors of the
Company 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, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, 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, void or
unenforceable language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
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 of
the Company.
Without limiting the foregoing, if any provision of this Agreement
requiring that a determination be made by less than the entire Board of
Directors is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, such determination shall then be made by the
entire Board of Directors.
Section 32. Governing Law.
This Agreement, each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts made and to be performed entirely
-34-
within such State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
MET-PRO CORPORATION
By /s/ Xxxxxxx X. Xxxxx
---------------------------------------------
Xxxxxxx X. Xxxxx, Chairman, CEO and President
Attest: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx, Vice President of
Finanace, Secretary and Treasurer,
Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Xxxxxxx X. Xxxxxx, Vice Presedent
Attest: /s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx, Assistant Secretary
-35-
Exhibit A
{Form of Rights Certificate}
Certificate No. R- _______________________ Rights
NOT EXERCISABLE AFTER JANUARY 14, 2010 OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.0001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS "BENEFICIALLY OWNED" BY AN "ACQUIRING
PERSON" OR ANY "AFFILIATE" OR "ASSOCIATE" THEREOF (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL 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 SHALL BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.}*
Rights Certificate
MET-PRO CORPORATION
This certifies that ___________________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of January 6, 2000 (as from time to time amended
or supplemented, the "Rights Agreement"), between Met-Pro Corporation, a
Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company (the "Rights Agent"), to purchase from the Company at any time prior to
5:00 P.M. (Philadelphia time) on January 14, 2010 (the "Final Expiration Date"),
unless earlier redeemed or exchanged by the Company, at the office or offices of
the Rights Agent designated for such purpose, or its successors as Rights Agent,
one share of the Common Stock (the "Common Stock") of the Company, at a price of
$50.00 (fifty dollars) (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 which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of January 6, 2000 based on the Common Stock as
constituted at such date and may be adjusted in accordance with the provisions
of the Rights Agreement.
______________________
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentences.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is 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 such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Affiliate or Associate 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.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Common Stock or other securities which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific 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 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. The Rights evidenced by this Rights Certificate may be transferred,
in whole or in part, upon surrender of this Rights Certificate at the principal
office of the Rights Agent designated for such purpose, with the Form of
Assignment and related Certificate duly executed. If the Rights evidenced by
this Rights Certificate shall be transferred or 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 transferred or exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may generally be redeemed by the Company at its option at a
redemption price of $0.0001 per Right at any time on or before such date as any
Person shall become an Acquiring Person.
The Company is not obligated to issue fractional shares of Stock 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 which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of ________________, _____
ATTEST: MET-PRO CORPORATION
______________________________ By _____________________________
Title
Countersigned:
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By __________________________
Authorized Signature
{Form of Reverse Side of Rights Certificate}
FORM OF ASSIGNMENT
{Form of Reverse Side of Rights Certificate}
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _________________________ 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:
_______________________________
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
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:
_____________________________
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
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, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: MET-PRO CORPORATION
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 consideration or other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and deliverable to:
Please insert social security or other identifying number
__________________________________________________________________
(Please printname 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:
_____________________________
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
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 became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated:________________, _____
________________________________
Signature
Signature Guaranteed:
_____________________________
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
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, without alteration or enlargement or any change whatsoever.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
Dividend of Rights to Purchase Common Stock
On January 6, 2000, the Board of Directors of Met-Pro Corporation (the
"Company") declared a dividend distribution of one Right for each outstanding
share of common stock, par value $.10 per share, of the Company (the "Common
Stock") to stockholders of record at the close of business on January 14, 2000
(the "Record Date"). After the Distribution Date, each Right entitles the
registered holder to purchase from the Company one share of Common Stock of the
Company at a price of $50.00 (fifty dollars) (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 "Rights Agent").
Distribution of the Rights; Rights Certificates
Until the Distribution Date (or earlier redemption or expiration of the
Rights), which is defined below, the Rights will be evidenced, with respect to
any of the Common Stock certificates outstanding prior to the Distribution Date,
by such Common Stock certificates. Until the Distribution Date (or earlier
redemption or expiration of the Rights), (i) the Rights will be transferred with
and only with the Common Stock, (ii) new Common Stock certificates issued after
the Record Date upon transfer, replacement or new issuance of Common Stock will
be deemed to be issued with Rights and will contain a notation incorporating the
Rights Agreement by reference and (iii) the transfer of any certificate for
Common Stock will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. Only Common Stock issued prior to
the Distribution Date will be issued with Rights.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date. From and after the Distribution Date, such separate Rights
Certificates alone will evidence the Rights.
Definition of Distribution Date
"Distribution Date" shall mean the earlier of (i) the first Business Day
following the date of a public announcement that a person, together with persons
affiliated or associated with it, has acquired beneficial ownership of 15% or
more of the outstanding Common Stock or (ii) the first Business Day following
the earlier of the commencement of, or the first public announcement of the
intent to commence, a tender offer or exchange offer by a person other than the
Company if, upon consummation of the offer, such person, together with persons
affiliated or associated with it, would be the beneficial owner of 15% or more
of the outstanding Common Stock.
Exercise and Expiration of the Rights
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on January 14, 2010 (the "Final Expiration
Date"), unless earlier redeemed or exchanged by the Company as described below.
Adjustment of the Purchase Price
The Purchase Price payable and the number of shares of Common Stock or
number and kind of 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) upon the grant to holders of the
Common Stock of certain rights, options or warrants to subscribe for Common
Stock (or shares having the same rights, privileges and preferences as the
shares of Common Stock) 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, securities, cash or assets (excluding regular periodic
dividends out of earnings or retained earnings or certain other 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 require an adjustment of at least 1% in the Purchase
Price. No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights, and in lieu thereof an adjustment in cash will be made
based on the current market price of the Common Stock on the last trading day
prior to the date of exercise.
Effect of a Triggering Event
Any of the events described in the succeeding second and fourth paragraphs
are defined as a "Triggering Event."
"Acquiring Person" shall mean any Person (generally defined to include any
individual, firm, corporation, limited liability company, partnership or other
entity) who or which, together with all Affiliates and Associates (as such terms
are defined in Rule 12b-2 of the General Rules and Regulations under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act")) of such
Person, shall be the Beneficial Owner (as such term is defined in the Rights
Agreement) of 15% or more of the Common Stock of the Company then outstanding,
but shall not include the Company, any Subsidiary (generally defined to mean any
corporation or other entity of which a majority of the voting power of the
voting securities or equity interest is owned by a Person or entity controlled
by such Person) of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any entity holding Common Stock for or
pursuant to the terms of any such plan.
In the event that a person, together with persons affiliated or associated
with it, becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, except as provided below, shall thereafter have the
right to receive, upon exercise thereof, Common Stock (or, in certain
circumstances as determined by the Company, other securities, cash, or other
property) having a value of two times the Purchase Price. Notwithstanding any of
the foregoing, following the occurrence of the event set forth in this
paragraph, all Rights that are, or (under certain circumstances set forth in the
Rights Agreement) were, beneficially owned by any Acquiring Person (or by
certain related parties and transferees) will be null and void. Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable by the Company, as set forth below.
For example, at an exercise price of $50.00 (fifty dollars) per Right, each
Right not owned by an Acquiring Person (or by certain related parties and
transferees) following an event set forth in the preceding paragraph would
entitle its holder to purchase $100.00 (one hundred dollars) worth of Common
Stock (or other consideration, as noted above) for $50.00 (fifty dollars).
In the event that, at any time following the Stock Acquisition Date, which
is defined below, (i) the Company is acquired in a merger or other business
combination transaction in which the Company is not the surviving corporation
(other than a merger which follows an offer described in the second preceding
paragraph), or (ii) fifty percent or more of the Company's assets, cash flow or
earning power is sold or transferred, proper provision shall be made so that
each holder of a Right (other than Rights that theretofore become null and void
as described in the second preceding paragraph) shall thereafter have the right
to receive, upon exercise thereof, common stock of the acquiring company having
a value equal to two times the exercise price of the Right.
Redemption of the Rights
At any time until any Person shall become an an Acquiring Person (the
"Stock Acquisition Date"), the Company may redeem all, but not less than all, of
the then outstanding Rights at a redemption price of $0.0001 per Right (the
"Redemption Price"). Immediately upon the action of the Board of Directors of
the Company ordering redemption of the Rights, the Rights will terminate and the
only right of the holder of Rights will be to receive the Redemption Price. The
Board may also redeem the Rights under certain other circumstances.
Exchange of the Rights
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
shares of Common Stock and prior to the acquisition by such person or group of
50% or more of the outstanding shares of Common Stock, the Board of Directors
may exchange the Rights (other than Rights owned by such person or group which
have become void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
Amendment of the Rights Agreement
Any of the provisions of the Rights Agreement may be amended by the Board
of Directors of the Company prior to the Distribution Date. Thereafter, the
provisions of the Rights Agreement may be amended by the Board of Directors of
the Company in order to (i) cure any ambiguity, (ii) to correct or supplement
any provision contained in the Rights Agreement which may be defective or
inconsistent with any other provisions therein, (iii) shorten or lengthen any
time period under the Rights Agreement, or (iv) make changes that will not
adversely affect the interests of the holders of Rights; provided such
lengthening described in (iii) above is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights; and
further provided, that no amendment may be made at such time as the Rights are
not redeemable.
Exercise of the Right Entitles the Right Holder to the Rights of a Stockholder
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending on the
circumstances, recognize taxable income in the event that 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. Copy of the Rights
Agreement available
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of the
Rights Agreement will be available free of charge from the Company to
stockholders submitting written requests therefore to: 000 Xxxxxxx Xxxx,
Xxxxxxxxxxxx, XX 00000, Attention: Chief Financial Officer. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is incorporated herein
by reference. In the event of any conflict between the description in this
Summary and the terms of the Rights Agreement, the Rights Agreement shall
govern.
