Exhibit 99(b)
CONFORMED COPY
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RIGHTS AGREEMENT
dated as of
February 1, 1996
between
Sun Company, Inc.
and
First Chicago Trust Company of New York,
as Rights Agent
TABLE OF CONTENTS(1)
Page
----
Section 1. Definitions........................... 1
Section 2. Appointment of Rights Agent........... 6
Section 3. Issue of Right Certificates........... 6
Section 4. Form of Right Certificates............ 8
Section 5. Countersignature and Registration..... 9
Section 6. Transfer and Exchange of Right
Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates... 9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights........... 10
Section 8. Cancellation and Destruction of Right
Certificates........................ 12
Section 9. Reservation and Availability of
Capital Stock....................... 12
Section 10. Preference Stock Record Date.......... 14
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or Number
of Rights........................... 14
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares........... 24
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. 25
Section 14. Fractional Rights and Fractional
Shares.............................. 27
Section 15. Rights of Action...................... 29
Section 16. Agreement of Right Holders............ 29
Section 17. Right Certificate Holder Not Deemed
a Stockholder....................... 30
Section 18. Concerning the Rights Agent........... 31
Section 19. Merger or Consolidation or Change of
Name of Rights Agent................ 31
Section 20. Duties of Rights Agent................ 32
Section 21. Change of Rights Agent................ 35
Section 22. Issuance of New Right Certificates.... 36
Section 23. Redemption............................ 36
Section 24. Exchange.............................. 37
Section 25. Notice of Proposed Actions............ 38
Section 26. Notices............................... 39
Section 27. Supplements and Amendments............ 40
Section 28. Successors............................ 40
Section 29. Determinations and Actions
by the Board of Directors, etc...... 40
Section 30. Benefits of this Agreement............ 41
Section 31. Severability.......................... 41
Section 32. Governing Law......................... 42
Section 33. Counterparts.......................... 42
Section 34. Descriptive Headings.................. 42
Exhibit A - Form of Certificate of Designation
of Preference Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary of the Rights
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(1) The Table of Contents is not a part of this Agreement.
RIGHTS AGREEMENT
AGREEMENT dated as of February 1, 1996, between Sun Company, Inc., a
Pennsylvania corporation (the "Company"), and First Chicago Trust Company of
New York, as Rights Agent (the "Rights Agent"),
W I T N E S S E T H
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WHEREAS, on February 1, 1996 the Board of Directors of the
Company authorized and declared a dividend of one preference stock purchase
right (a "Right") for each share of Common Stock (as hereinafter defined) and
two Rights for each share of Series A Preference Stock (as hereinafter
defined) outstanding at the close of business on February 12, 1996 (the
"Record Date") and has authorized the issuance, upon the terms and subject to
the conditions hereinafter set forth, of one Right in respect of each share of
Common Stock issued after the Record Date, each Right representing the right
to purchase, upon the terms and subject to the conditions hereinafter set
forth, one one-hundredth of a share of Series B Preference Stock (as
hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. The following terms, as used herein, have
the following meanings:
"Acquiring Person" means any Person who, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more
of the shares of Voting Stock then outstanding, but shall not include the
Company, any of its Subsidiaries, any employee benefit plan of the Company
or any of its Subsidiaries or any Person organized, appointed or
established by the Company or any of its Subsidiaries for or pursuant to
the terms of any such plan; provided that the term "Acquiring Person" shall
not include any Person, who, together with all Affiliates and Associates of
such Person, is the Beneficial Owner on the date hereof of Common Stock
which, together with the Common Stock acquired by such Persons upon the
redemption of the Series A Preferred Stock held by such Persons equals 15%
or more of the shares of Voting Stock outstanding at the time of such
redemption, provided further, however, that such Person, together with all
Affiliates and Associates of such Person, shall not have become the
Beneficial Owner of any additional shares of Voting Stock after the date
hereof. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" solely as a result of an acquisition of shares of Voting
Stock by the Company which, by reducing the number of shares of Voting
Stock outstanding, increases the proportionate number of shares of Voting
Stock beneficially owned by such Person (together with all Affiliates and
Associates of such Person) to 15% or more of the shares of Voting Stock
then outstanding.
"Affiliate" and "Associate" have the respective meanings ascribed to
such terms in Rule 12b-2 under the Exchange Act as in effect on the date
hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
(a) which such Person or any of its 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 hereof);
(b) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of certain
events or the passage of time or both) pursuant to any
agreement, arrangement or understanding (whether or not in
writing) or otherwise (other than pursuant to the Rights);
provided 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 its Affiliates or Associates until such
tendered securities are accepted for payment or exchange; or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of certain
events or the passage of time or both) pursuant to any
agreement, arrangement or understanding (whether or not in
writing) or otherwise; provided that a Person shall not be
deemed the "Beneficial Owner" of or to "beneficially own" any
security under this clause (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from
a revocable proxy or consent given in response to a public
proxy or consent solicitation made pursuant to the applicable
rules and regulations under the Exchange Act and (B) is not
also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person or any of its Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in subparagraph (b)(ii) immediately above) or
disposing of any such securities.
"Business Day" means any day other than a Saturday, Sunday or a day
on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Close of business" on any given date means 5:00 P.M., New York City
time, on such date; provided that if such date is not a Business Day "close
of business" means 5:00 P.M., New York City time, on the next succeeding
Business Day.
"Common Stock" means the Common Stock, par value $1.00 per share, of
the Company, except that, when used with reference to any Person other than
the Company, "Common Stock" means the capital stock of such Person with the
greatest voting power, or the equity securities or other equity interest
having power to control or direct the management, of such Person.
"Continuing Director" means any member of the Board of Directors of
the Company, while such Person is a member of the Board, who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or a
representative or nominee of an Acquiring Person or of any such Affiliate
or Associate and either (a) was a member of the Board immediately prior to
the time any Person becomes an Acquiring Person or (b) subsequently becomes
a member of the Board, if such Person's nomination for election or election
to the Board is recommended or approved by a majority of the Continuing
Directors.
"Deposit Agreement" means the Deposit Agreement dated as of June 13,
1995 between the Company and First Chicago Trust Company of New York, as
Depositary, as amended.
"Depositary Receipt" means a depositary receipt issued pursuant to
the Deposit Agreement to evidence one or more Series A Depositary Shares,
whether in temporary or definitive form.
"Distribution Date" means the earlier of (a) the close of business on
the tenth day (or such later day as may be designated by action of a
majority of the Continuing Directors) after the Stock Acquisition Date and
(b) the close of business on the tenth Business Day (or such later day as
may be designated by action of a majority of the Continuing Directors)
after the date of the commencement of a tender or exchange offer by any
Person if, upon consummation thereof, such Person would be an Acquiring
Person.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" means the earliest of (a) the Final Expiration
Date, (b) the time at which all Rights are redeemed as provided in Section
23 or exchanged as provided in Section 24 and (c) with respect to any
Rights associated with any share of Series A Preference Stock, the date of
redemption by the Company of such share of Series A Preference Stock in
accordance with the terms of the certificate of designation for such stock.
"Final Expiration Date" means the close of business on February 12,
2006.
"Person" means an individual, corporation, partnership, association,
trust or any other entity or organization.
"Purchase Price" means the price (subject to adjustment as provided
herein) at which a holder of a Right may purchase one one-hundredth of a
share of Series B Preference Stock (subject to adjustment as provided
herein) upon exercise of a Right, which price shall initially be $100.00.
"Section 11(a)(ii) Event" means any event described in the first
clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x), (y) or
(z) of Section 13(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Depositary Share" means an interest in one-half of a share
of Series A Preference Stock deposited with the Depositary pursuant to the
Deposit Agreement.
"Series A Preference Stock" means the Series A Cumulative Preference
Stock, without par value, of the Company.
"Series B Preference Stock" means the Series B Participating
Cumulative Preference Stock, without par value, of the Company, having the
terms set forth in the form of certificate of designation attached hereto
as Exhibit A.
"Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D under the
Exchange Act (or any comparable or successor report)) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such.
"Subsidiary" of any Person means any other Person of which securities
or other ownership interests having ordinary voting power, in the absence
of contingencies, to elect a majority of the board of directors or other
Persons performing similar functions are at the time directly or indirectly
owned by such first Person.
"Trading Day" means a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any Section
13 Event.
"Voting Stock" means all of the outstanding shares of Common Stock,
and the outstanding shares of any class or series of stock having
preference over the Common Stock as to dividends or as to liquidation
entitled to vote on each matter on which the holders of Common Stock shall
be entitled to vote, and reference to a percentage of shares of Voting
Stock shall refer to the percentage of votes entitled to be cast by such
shares.
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
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. If 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. Issue of Right Certificates. (a) Prior to the
Distribution Date, (i) the Rights will be evidenced by the certificates for
the Common Stock and the certificates for the Series A Preference Stock and
not by separate Right Certificates (as hereinafter defined) and the registered
holders of the Common Stock and the Series A Preference Stock shall be deemed
to be the registered holders of the associated Rights, and (ii) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock and Series A Preference Stock. From and after the
Record Date, each Series A Depositary Share (evidenced by a Depositary
Receipt) will represent an interest in one-half of a share of Series A
Preference Stock, together with one Right attached thereto, subject to
adjustment as provided herein. Upon the request of a record holder of Common
Stock or Series A Preference Stock, the Company will send a summary of the
Rights substantially in the form of Exhibit C hereto, by first-class, postage
prepaid mail, to such holder.
(b) As soon as practicable after the Company has notified the
Rights Agent of the occurrence of the Distribution Date, the Rights Agent will
send, by first-class, insured, postage prepaid mail, (i) 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
Right Certificates evidencing one Right (subject to adjustment as provided
herein) for each share of Common Stock so held and (ii) to each record holder
of the Series A Preference 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 Right Certificates evidencing two Rights (subject to
adjustment as provided herein) for each share of Series A Preference Stock so
held. If an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(p), the Company shall, at the time of
distribution of the Right Certificates, make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a)) so that Right
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. From and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) Rights shall be issued in respect of all shares of Common
Stock and all shares of Series A Preference Stock outstanding as of the
Record Date. Rights shall also be issued in respect of all shares of
Common Stock issued (on original issuance or out of treasury) after the
Record Date but prior to the earlier of the Distribution Date and the
Expiration Date, including without limitation upon the redemption of any
shares of Series A Preference Stock; provided that unless otherwise
adjusted pursuant to Section 11, not more than one Right shall attach to
any one share issued from treasury. In addition, in connection with the
issuance or sale of shares of Common Stock following the Distribution Date
and prior to the Expiration Date, the Company (i) shall, with respect to
shares of Common Stock so issued or sold (x) pursuant to the exercise of
stock options or under any employee plan or arrangement or (y) upon the
exercise, conversion, redemption or exchange of other securities issued by
the Company prior to the Distribution Date and (ii) may, in any other case,
if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided that no such
Right Certificate shall be issued if, and to the extent that, (i) 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 Right Certificate would be issued or (ii) appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
(d) Certificates for the Common Stock issued, and certificates for
the Series A Preference Stock delivered in accordance with the Deposit
Agreement, in each case after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between Sun Company, Inc. and First Chicago Trust
Company of New York dated as of February 1, 1996 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge promptly
after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may
be evidenced by separate certificates and no longer be evidenced by
this certificate, may be redeemed or exchanged or may expire. As set
forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or
by any subsequent holder, may be null and void.
Section 4. Form of Right Certificates. (a) The certificates
evidencing the Rights (and the forms of assignment, election to purchase and
certificates to be printed on the reverse thereof) (the "Right Certificates")
shall be substantially in the form of Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law, rule or regulation 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. The Right Certificates, whenever distributed,
shall be dated as of the Record Date.
(b) Any Right Certificate representing Rights beneficially owned by
any Person referred to in clauses (i), (ii) or (iii) of the first sentence of
Section 7(d) shall (to the extent feasible) contain the following legend:
The Rights represented by this Right 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). This Right
Certificate and the Rights represented hereby may be or may become
null and void in the circumstances specified in Section 7(d) of
such Agreement.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any
officer of the Company whose manual or facsimile signature is affixed to
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates may, nevertheless, be countersigned by the
Rights Agent and issued and delivered with the same force and effect as
though the Person who signed such Right Certificates had not ceased to be
such officer of the Company. Any Right Certificate may be signed on behalf
of the Company by any Person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
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 place
for surrender of Right Certificates upon exercise, transfer or exchange, books
for registration and transfer of the Right Certificates. Such books shall
show with respect to each Right Certificate the name and address of the
registered holder thereof, the number of Rights indicated on the certificate
and the certificate number.
Section 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates. (a) At any time after the
Distribution Date and prior to the Expiration Date, any Right Certificate or
Certificates may, upon the terms and subject to the conditions set forth below
in this Section 6(a), be transferred or exchanged for another Right
Certificate or Certificates evidencing a like number of Rights as the Right
Certificate or Certificates surrendered. Any registered holder desiring to
transfer or exchange any Right Certificate or Certificates shall surrender
such Right Certificate or Certificates (with, in the case of a transfer, the
form of assignment and 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. Neither the Rights Agent nor the Company shall
be obligated to take any action whatsoever with respect to the transfer of any
such surrendered Right Certificate or Certificates until the registered holder
of the Rights has complied with the requirements of Section 7(e). Upon
satisfaction of the foregoing requirements, the Rights Agent shall, subject to
Sections 4(b), 7(d), 14 and 24, countersign and deliver to the Person entitled
thereto a Right Certificate or Certificates as so requested. The Company may
require payment of a sum sufficient to cover any transfer tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of any Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, 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 Right Certificate if mutilated, the Company will issue and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d) and (e), 9(c), 11(a), 23 and 24) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date upon surrender
of the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the principal office or offices of the Rights Agent designated for such
purpose, together with payment (in lawful money of the United States of
America by certified check or bank draft payable to the order of the Company)
of the aggregate Purchase Price with respect to the Rights then to be
exercised and an amount equal to any applicable transfer tax or other
governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and
subject to Section 20(k), the Rights Agent shall thereupon promptly (i)(A)
requisition from any transfer agent of the Series B Preference Stock (or make
available, if the Rights Agent is the transfer agent therefor) certificates
for the total number of one one-hundredths of a share of Series B Preference
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 shares of Series B Preference Stock issuable upon
exercise of the Rights with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of one
one-hundredths of a share of Series B Preference Stock as are to be purchased
(in which case certificates for the shares of Series B Preference Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of issuance of fractional shares in accordance with
Section 14 and (iii) after receipt of such certificates or depositary receipts
and cash, if any, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate (with such certificates or
receipts registered in such name or names as may be designated by such
holder). If the Company is obligated to deliver Common Stock, other
securities or assets pursuant to this Agreement, the Company will make all
arrangements necessary so that such other securities and assets are available
for delivery by the Rights Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Right Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14.
(d) 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 such
Associate or Affiliate) 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) 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
(or any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or in any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Continuing Directors have determined or
determine is part of a course of conduct, plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(d)
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. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(d) and
Section 4(b) are complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates and
Associates or any transferee of any of them hereunder.
(e) 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 of Rights upon the
occurrence of any purported transfer pursuant to Section 6 or exercise
pursuant to this Section 7 unless such registered holder (i) shall have
completed and signed the certificate contained in the form of assignment or
election to purchase, as the case may be, set forth on the reverse side of
the Right Certificate surrendered for such transfer or exercise, as the
case may be, (ii) shall not have indicated an affirmative response to
clause 1 or 2 thereof and (iii) 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 request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for exercise, transfer or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by this Agreement. The Company
shall deliver to the Rights Agent for cancellation, and the Rights Agent shall
cancel, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy or cause to be destroyed such canceled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Series B Preference Stock which are authorized
but not outstanding or otherwise reserved for issuance sufficient to permit
the exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Series B Preference Stock issuable upon the
exercise of Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all securities reserved for such issuance to be
listed on any such exchange upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Securities Act with
respect to the securities issuable upon exercise of the Rights, (ii) to cause
such registration statement to become effective as soon as practicable after
such filing and (iii) to 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 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. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable for securities
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, such exercise therefor shall not be permitted under
applicable law or a registration statement in respect of such securities shall
not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all one one-hundredths of a share of
Series B Preference Stock or all shares of Common Stock, as the case may be,
issuable upon exercise of Rights shall, at the time of delivery of the
certificates for such securities (subject to payment of the Purchase Price),
be duly and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and other
governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Series B
Preference Stock upon the exercise of Rights. The Company shall not, however,
be required to pay any transfer tax or other governmental charge which may be
payable in respect of any transfer involved in the issuance or delivery of any
Right Certificates or of any certificates for Series B Preference Stock to a
Person other than the registered holder of the applicable Right Certificate,
and prior to any such transfer, issuance or delivery any such tax or other
governmental charge shall have been paid by the holder of such Right
Certificate or it shall have been established to the Company's satisfaction
that no such tax or other governmental charge is due.
Section 10. Series B Preference Stock Record Date. Each Person
(other than the Company) in whose name any certificate for Series B
Preference Stock is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such Series B
Preference Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any transfer taxes
or other governmental charges) was made; provided that if the date of such
surrender and payment is a date upon which the transfer books of the
Company relating to the Series B Preference Stock 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 applicable transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a stockholder of the Company with
respect to shares for which the Rights shall be exercisable, including the
right to vote, to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any notice of
any proceedings of the Company except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. (a)(i) If the Company shall at any time after the date
of this Agreement (A) pay a dividend on the Series B Preference Stock payable
in shares of Series B Preference Stock, (B) subdivide the outstanding Series B
Preference Stock into a greater number of shares, (C) combine the outstanding
Series B Preference Stock into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the Series B Preference
Stock (including any such reclassification in connection with a consolidation
or merger involving the Company), the Purchase Price in effect immediately
prior to 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 Series B Preference Stock or other capital stock issuable on such
date shall be proportionately adjusted so that each holder of a Right shall
(except as otherwise provided herein, including Section 7(d)) thereafter be
entitled to receive, upon exercise thereof at the Purchase Price in effect
immediately prior to such date, the aggregate number and kind of shares of
Series B Preference Stock or other capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such date and at a time
when the applicable transfer books of the Company were open, such holder would
have been entitled to receive upon such exercise and by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
which requires an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement, become an
Acquiring Person, then proper provision shall promptly be made so that each
holder of a Right shall (except as otherwise provided herein, including
Section 7(d)) thereafter be entitled to receive, upon exercise thereof on or
after the Distribution Date at the Purchase Price in effect immediately prior
to the first occurrence of a Section 11(a)(ii) Event, in lieu of Series B
Preference Stock, such number of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock of the Company (such shares being
referred to herein as the "Adjustment Shares") as shall be equal to the result
obtained by dividing
(x) the product obtained by multiplying the Purchase Price in effect
immediately prior to the first occurrence of a Section 11(a)(ii) Event by
the number of one one-hundredths of a share of Series B Preference Stock
for which a Right was exercisable immediately prior to such first
occurrence (such product being thereafter referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by
(y) 50% of the current market price (determined pursuant to Section
11(d)(i)) per share of Common Stock on the date of such first occurrence;
provided that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then
only the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock which are authorized
by the Company's articles of incorporation but not outstanding or reserved
for issuance other than upon exercise of the Rights is not sufficient to
permit the exercise in full of the Rights in accordance with Section
11(a)(ii), the Company shall, with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
Purchase Price then in effect, (A) (to the extent available) Common Stock
and then, (B) (to the extent available) other equity securities of the
Company which a majority of the Continuing Directors has determined to be
essentially equivalent to shares of Common Stock in respect to dividend,
liquidation and voting rights (such securities being referred to herein as
"common stock equivalents") and then, if necessary, (C) other equity or
debt securities of the Company, cash or other assets, a reduction in the
Purchase Price or any combination of the foregoing, having an aggregate
value (as determined by the Continuing Directors based upon the advice of a
nationally recognized investment banking firm selected by the Continuing
Directors) equal to the value of the Adjustment Shares; provided that (x)
the Company may, and (y) if the Company shall not have made adequate
provision as required above to deliver value within 30 days following the
later of the first occurrence of a Section 11(a)(ii) Event and the first
date that the right to redeem the Rights pursuant to Section 23 shall
expire, then the Company shall be obligated to, deliver, upon the surrender
for exercise of a Right and without requiring payment of the Purchase
Price, (1) (to the extent available) Common Stock and then (2) (to the
extent available) common stock equivalents and then, if necessary, (3)
other equity or debt securities of the Company, cash or other assets or any
combination of the foregoing, having an aggregate value (as determined by
the Continuing Directors based upon the advice of a nationally recognized
investment banking firm selected by the Continuing Directors) equal to the
excess of the value of the Adjustment Shares over the Purchase Price. If
the Continuing 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 30 day
period set forth above (such period, as it may be extended, being referred
to herein as the "Substitution Period") may be extended to the extent
necessary, but not more than 90 days following the first occurrence of a
Section 11(a)(ii) Event, in order that the Company may seek stockholder
approval for the authorization of such additional shares. To the extent
that the Company determines that some action is to 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(d), that such action shall apply
uniformly to all outstanding Rights and (Y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form and value of any consideration to be delivered as referred
to in such first and/or second sentence. If any such suspension occurs,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of the Common Stock
shall be the current market price per share of Common Stock (as determined
pursuant to Section 11(d)) on the later of the date of the first occurrence
of a Section 11(a)(ii) Event and the first date that the right to redeem
the Rights pursuant to Section 23 shall expire; any common stock equivalent
shall be deemed to have the same value as the Common Stock on such date;
and the value of other securities or assets shall be determined pursuant to
Section 11(d)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Series B Preference Stock
entitling them to subscribe for or purchase (for a period expiring within
45 calendar days after such record date) Series B Preference Stock (or
securities having the same rights, privileges and preferences as the shares
of Series B Preference Stock ("equivalent preference stock")) or securities
convertible into or exercisable for Series B Preference Stock (or
equivalent preference stock) at a price per share of Series B Preference
Stock (or equivalent preference stock) (in each case, taking account of
any conversion or exercise price) less than the current market price (as
determined pursuant to Section 11(d)) per share of Series B Preference
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 date by a fraction, the numerator of which shall
be the number of shares of Series B Preference Stock outstanding on such
record date, plus the number of shares of Series B Preference Stock which
the aggregate price (taking account of any conversion or exercise price) of
the total number of shares of Series B Preference Stock (and/or equivalent
preference stock) so to be offered would purchase at such current market
price and the denominator of which shall be the number of shares of Series
B Preference Stock outstanding on such record date plus the number of
additional shares of Series B Preference Stock (and/or equivalent
preference stock) so to be offered. In case such subscription price may be
paid by delivery of consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. Shares of Series B Preference Stock owned by
or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and if such rights,
options or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of Series B Preference Stock (including any
such distribution made in connection with a consolidation or merger
involving the Company) of evidences of indebtedness, equity securities
other than Series B Preference Stock, assets (other than a regular periodic
cash dividend out of the earnings or retained earnings of the Company) or
rights, options or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d)) per share of Series
B Preference Stock on such record date, less the value (as determined
pursuant to Section 11(d)(iii)) of such evidences of indebtedness, equity
securities, assets, rights, options or warrants so to be distributed with
respect to one share of Series B Preference Stock and the denominator of
which shall be such current market price per share of Series B Preference
Stock. Such adjustment shall be made successively whenever such a record
date is fixed, and if such distribution is not so made, 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.
(d)(i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date; for purposes of
computations made pursuant to Section 11(a)(iii), the "current market price"
per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the 10 consecutive
Trading Days immediately following such date; and for purposes of computations
made pursuant to Section 14, the "current market price" per share of Common
Stock for any Trading Day shall be deemed to be the closing price per share of
Common Stock for such Trading Day; provided that if the current market price
per share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities exercisable for or convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, after
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then, and in each such
case, the "current market price" shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
or, if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use or, if on any
such date the shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors of the Company, or, if at the time of such selection there is an
Acquiring Person, by a majority of the Continuing Directors. If on any such
date no market maker is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the Board of Directors
of the Company (or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors) shall be used. If the
Common Stock is not publicly held or not so listed or traded, the "current
market price" per share means the fair value per share as determined in good
faith by the Board of Directors of the Company, or, if at the time of such
determination there is an Acquiring Person, by a majority of the Continuing
Directors, or if there are no Continuing Directors, by a nationally recognized
investment banking firm selected by the Board of Directors having no current
or former relationship with an Acquiring Person, which determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Series B Preference Stock shall be determined in
the same manner as set forth above for the Common Stock in Section 11(d)(i)
(other than the last sentence thereof). If the current market price per share
of Series B Preference Stock cannot be determined in such manner, the "current
market price" per share of Series B Preference Stock shall be conclusively
deemed to be an amount equal to 100 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of
this Agreement) multiplied by the current market price per share of Common
Stock (as determined pursuant to Section 11(d)(i) (other than the last
sentence thereof)). If neither the Common Stock nor the Series B Preference
Stock is publicly held or so listed or traded, the "current market price" per
share of the Series B Preference Stock shall be determined in the same manner
as set forth in the last sentence of Section 11(d)(i). For all purposes of
this Agreement, the "current market price" of one one-hundredth of a share of
Series B Preference Stock shall be equal to the "current market price" of one
share of Series B Preference Stock divided by 100.
(iii) For the purpose of any computation hereunder, the value of any
securities or assets other than Common Stock or Series B Preference Stock
shall be the fair value as determined in good faith by the Board of Directors
of the Company, or, if at the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors then in office, or, if there
are no Continuing Directors, by a nationally recognized investment banking
firm selected by the Board of Directors having no current or former
relationship with an Acquiring Person, which determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Purchase Price; provided that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or one-millionth of a share of Series B Preference Stock, as the
case may be.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a), the holder of any Right shall be entitled
to receive upon exercise of such Right any shares of capital stock other than
Series B Preference 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 Series B
Preference Stock contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Series B Preference Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one
one-hundredths of a share of Series B Preference Stock and other capital stock
of the Company issuable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Series B Preference Stock (calculated to the
nearest one-millionth) obtained by (i) multiplying (x) the number of one
one-hundredths of a share for which a Right was exercisable immediately prior
to this adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-hundredths of a share of Series B Preference Stock
issuable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Series B Preference Stock for which such
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 Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right 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 Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, 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
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and 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 Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a share of Series B Preference Stock
issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the number of
one one-hundredths of a share of Series B Preference 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 such number of
one one-hundredths of a share of Series B Preference 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
the number of one one-hundredths of a share of Series B Preference Stock or
other capital stock of the Company, if any, issuable upon such exercise over
and above the number of one one-hundredths of a share of Series B Preference
Stock or other capital stock of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided that the Company shall deliver to such holder a due xxxx
or other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Series B Preference Stock,
issuance wholly for cash of any Series B Preference Stock at less than the
current market price, issuance wholly for cash of Series B Preference Stock or
securities which by their terms are convertible into or exercisable for Series
B Preference Stock, stock dividends or issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to the holders
of its Series B Preference Stock, shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate, merge or otherwise combine
with or (ii) sell or otherwise transfer (and/or permit any of its
Subsidiaries to sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries, taken
as a whole, to any other Person or Persons if (x) at the time of or
immediately after such consolidation, merger, combination or sale there are
any rights, warrants or other instruments or securities outstanding or any
agreements or arrangements 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, combination or sale, the stockholders of a Person who constitutes,
or would constitute, the "Principal Party" for the purposes of Section 13
shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27, 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 substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if
at any time after the date hereof and prior to the Distribution Date the
Company shall (i) pay a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock
into a larger number of shares or (iii) combine the outstanding Common Stock
into a smaller number of shares, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered thereafter as
contemplated by Section 3(c), shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior
to such event by a fraction the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13, 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
Series B Preference Stock, the Common Stock and the Series A Preference Stock
a copy of such certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate (or, if prior to the Distribution Date, to each holder
of a certificate representing shares of Common Stock and Series A Preference
Stock) in the manner set forth in Section 26. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) If, following the Stock Acquisition Date, directly or
indirectly,
(x) the Company shall consolidate with, merge into, or otherwise
combine with, any other Person, and the Company shall not be the continuing
or surviving corporation of such consolidation, merger or combination,
(y) any Person shall merge into, or otherwise combine with, the
Company, and the Company shall be the continuing or surviving corporation
of such merger or combination and, in connection with such merger or
combination, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for other stock or securities of the Company or
any other Person, cash or any other property, or
(z) the Company and/or one or more of its Subsidiaries shall sell or
otherwise transfer, in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries, taken as a whole, to any other
Person or Persons,
then, and in each such case, proper provision shall promptly be made so that
(1) each holder of a Right shall thereafter be entitled to receive,
upon exercise thereof at the Purchase Price in effect immediately prior to the
first occurrence of any Triggering Event, such number of duly authorized,
validly issued, fully paid and nonassessable shares of freely tradeable Common
Stock of the Principal Party (as hereinafter defined), not subject to any
rights of call or first refusal, liens, encumbrances or other claims, as shall
be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase Price in effect
immediately prior to the first occurrence of any Triggering Event by the
number of one one-hundredths of a share of Series B Preference Stock for
which a Right was exercisable immediately prior to such first occurrence
(such product being thereafter referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by
(B) 50% of the current market price (determined pursuant to Section
11(d)(i)) per share of the Common Stock of such Principal Party on the date
of consummation of such consolidation, merger, combination, sale or
transfer;
(2) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, combination, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement;
(3) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 shall apply only to such Principal Party following the first occurrence of
a Section 13 Event; and
(4) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its Common
Stock to permit exercise of all outstanding Rights in accordance with this
Section 13(a)) 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 the shares of its
Common Stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section 13(a)(x) or
(y), the Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger, consolidation or
combination, and if no securities are so issued, the Person that survives
or results from such merger, consolidation or combination; and
(ii) in the case of any transaction described in Section 13(a)(z), the
Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions;
provided that in any such case, (A) if the Common Stock of such Person is not
at such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to such other Person; and
(B) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
combination, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which are not
outstanding or otherwise reserved for issuance to permit the exercise in full
of the Rights in accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
Section 13(a) and (b) and providing that, as soon as practicable after the
date of any consolidation, merger, combination, sale or transfer mentioned in
Section 13(a), the Principal Party will
(i) prepare and file a registration statement under the Securities
Act with respect to the securities issuable upon exercise of the Rights,
and will use its best efforts to cause such registration statement (A) to
become effective as soon as practicable after such filing and (B) to remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date and
(ii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates 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,
consolidations, combinations, sales or other transfers. If any 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).
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights, except prior to
the Distribution Date as provided in Section 11(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
price of a whole Right. For purposes of this Section 14(a), the current
market price of a whole Right shall be the closing price of a Right for the
Trading Day immediately prior to the date on which such fractional Rights
would otherwise have been issuable. The closing price of a Right for any day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company or, if at the time of
such selection there is an Acquiring Person, by a majority of the Continuing
Directors. If on any such date no such market maker is making a market in the
Rights, the current market price of the Rights on such date shall be as
determined in good faith by the Board of Directors of the Company or, if at
the time of such determination there is an Acquiring Person, by a majority of
the Continuing Directors.
(b) The Company shall not be required to issue fractions of shares
of Series B Preference Stock (other than fractions which are multiples of one
one-hundredth of a share of Series B Preference Stock) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Series B Preference Stock (other than fractions which are multiples of one
one-hundredth of a share of Series B Preference Stock). In lieu of any such
fractional shares of Series B Preference Stock, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market price of one one-hundredth of a share of Series B Preference Stock. For
purposes of this Section 14(b), the current market price of one one-hundredth
of a share of Series B Preference Stock shall be one one-hundredth of the
closing price of a share of Series B Preference Stock (as determined pursuant
to Section 11(d)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of any Triggering Event or upon any
exchange pursuant to Section 24, 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 shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
or exchanged as herein provided an amount in cash equal to the same fraction
of the current market price of a share of Common Stock. For purposes of this
Section 14(c), the current market price of a share of Common Stock shall be
the closing price of a share of Common Stock (as determined pursuant to
Section 11(d)(i)) for the Trading Day immediately prior to the date of such
exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock and Series A Preference Stock; and any
registered holder of any Right Certificate (or, prior to the Distribution
Date, of any certificate representing Common Stock or Series A Preference
Stock, without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of any certificate
representing Common Stock or Series A Preference Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations
of, any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock and Series A Preference
Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights Agent
may deem and treat the Person in whose name a Right Certificate (or, prior to
the Distribution Date, a certificate representing shares of Common Stock or
Series A Preference Stock is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or on the certificate representing shares of
Common Stock or Series A Preference Stock 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(d),
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 that 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. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (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 execution or administration of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability.
(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 the administration of this Agreement or the exercise or performance of
its duties hereunder in reliance upon any Right Certificate or certificate for
Common Stock or Series A Preference Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 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 that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
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 Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (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" and the
determination of "current market price") be proved or established by the
Company prior to taking, suffering or omitting to take 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
President or any Vice President and by the Treasurer or any Assistant
Treasurer or 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, suffered or omitted in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right 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 Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(d)) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23 or 24, or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right 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 or Series B Preference Stock to be issued pursuant
to this Agreement or any Right Certificate or as to whether any shares of
Common Stock or Series B Preference Stock will, when issued, be duly
authorized, validly 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 President or any Vice President or the Secretary or
any Assistant Secretary or the Treasurer or any Assistant Treasurer 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,
suffered or omitted 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 the 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 Person.
(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 or to any holders of
Rights resulting from any such act, default, neglect or misconduct, provided
that 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,
nor shall the Rights Agent be under any duty or responsibility to institute
any action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more holders of Rights
Certificates shall furnish the Rights Agent with security and indemnity to its
satisfaction for any costs and expenses which may be incurred.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the cases may be, has either
not been completed or indicates an affirmative response to clause 1 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.
(l) The Rights Agent shall not be liable for failure to perform any
duties except as specifically set forth herein and no implied covenants or
obligations shall be read into this Agreement against the Rights Agent whose
duties and obligations are ministerial and shall be determined solely by the
express provisions hereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock, the Series A Preference Stock and the
Series B Preference Stock by registered or certified mail, and, subsequent to
the Distribution Date, to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Stock, the Series A Preference Stock and the Series B Preference Stock by
registered or certified mail, and, subsequent to the Distribution Date, to the
holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice
of such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any
state of the United States, in good standing, having a principal office in the
State of New York, which is authorized under such laws to exercise stock
transfer or corporate trust powers and is subject to supervision or
examination by federal or state authority and which, at the time of its
appointment as Rights Agent, has, or is an Affiliate of a corporation which
has, a combined capital and surplus of at least $50,000,000 or (b) an
Affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Stock, the Series A Preference Stock and the Series B Preference Stock,
and, subsequent to the Distribution Date, mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares of stock issuable upon exercise of the Rights made in accordance with
the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to the earlier of (i) the close of
business on the tenth day after the Stock Acquisition Date (or such later date
as a majority of the Continuing Directors may designate prior to such time as
the Rights are no longer redeemable) and (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $.01 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"); provided that after any Person has become an Acquiring
Person, any redemption of the Rights shall be effective only if there are
Continuing Directors then in office, and such redemption shall have been
approved by a majority of such Continuing Directors. Notwithstanding anything
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.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights and without any further action and
without any notice, the right to exercise the Rights will terminate and
thereafter the only right of the holders of Rights shall be to receive the
Redemption Price for each Right so held. The Company shall promptly
thereafter give notice of such redemption to the Rights Agent and the holders
of the Rights in the manner set forth in Section 26; provided that the failure
to give, or any defect in, such notice shall not affect the validity of such
redemption. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in Section 23 or 24 (except
by reason of the initial distribution of the Rights to holders of record of
Common Stock and Series A Preference Stock on the Record Date), and other than
in connection with the purchase, acquisition or redemption of shares of Common
Stock or Series A Preference Stock prior to the Distribution Date.
Section 24. Exchange. (a) At any time after any Person becomes an
Acquiring Person, a majority of the Continuing Directors may, at their option,
exchange all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to Section 7(d)) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any of its
Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries or any Person organized, appointed or established by the Company
or any of its Subsidiaries for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Voting Stock then
outstanding.
(b) Immediately upon the action of the Continuing Directors
electing to exchange any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights
will terminate and thereafter the only right 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 thereafter give notice of such exchange to the
Rights Agent and the holders of the Rights to be exchanged in the manner
set forth in Section 26; provided that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to Section 7(d)) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute common stock equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the initial
rate of one common stock equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of common stock equivalents pursuant to the terms thereof, so
that each common stock equivalent delivered in lieu of each share of Common
Stock shall have essentially the same dividend, liquidation and voting rights
as one share of Common Stock.
Section 25. Notice of Proposed Actions. (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 Series B
Preference Stock or to make any other distribution to the holders of Series
B Preference Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the
holders of its Series B Preference Stock rights or warrants to subscribe
for or to purchase any additional shares of Series B Preference Stock or
shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Series B Preference Stock
(other than a reclassification involving only the subdivision or
combination of outstanding shares of Series B Preference Stock) or (iv) to
effect any consolidation or merger with any other Person, or to effect
and/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
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries, taken as a whole, to any other
Person or Persons, or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Right, to the extent feasible and in accordance with Section
26, a notice of such proposed action, which shall specify the record date
for the purposes of any such dividend, distribution or offering of rights
or warrants, or the date on which any 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 Series B
Preference Stock, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least 20 days prior to the record date for determining holders of the
Series B Preference Stock entitled to participate in such dividend,
distribution or offering, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of Series B Preference
Stock, whichever shall be the earlier. The failure to give notice required
by this Section or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such
action.
(b) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a public filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the
holders of securities of the Company, including the Rights, for purposes of
this Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case,
(1) the Company shall as soon as practicable thereafter give to each holder
of a Right, in accordance with Section 26, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) or 13, as the case may be, and
(2) all references in Section 25(a) to Series B Preference Stock shall be
deemed thereafter to refer to Common Stock or other capital stock, as the
case may be.
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
Right to or on the Company shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the address of the Company indicated on
the signature page hereof or such other address as the Company shall specify
in writing to the Rights Agent. Subject to the provisions of Section 21, any
notice or demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail (postage prepaid) to
the address of the Rights Agent indicated on the signature page hereof or such
other address as the Rights Agent shall specify in writing to the Company.
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior
to the Distribution Date, to the holder of any certificate representing shares
of Common Stock or Series A Preference Stock) shall be sufficiently given or
made if sent by first-class mail (postage prepaid) to the address of such
holder 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 or Series A
Preference 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 Right Certificates in order
(a) to cure any ambiguity, (b) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein or (c) to change or supplement the provisions hereof in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).
Notwithstanding the foregoing, after any Person has become an Acquiring
Person, any supplement or amendment shall be effective only if there are
Continuing Directors then in office, and such supplement or amendment shall
have been approved by a majority of such Continuing Directors. 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, 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 and Series A Preference Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors,
etc. (a) For all purposes of this Agreement, any calculation of the number of
shares of Voting Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares
of Voting 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) under the Exchange
Act as in effect on the date of this Agreement.
(b) The Board of Directors of the Company (or, after any Person has
become an Acquiring Person, a majority of the Continuing Directors) shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board or to the Company, or
as may be necessary or advisable in the administration of this Agreement,
including the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
exchange or not to redeem or exchange the Rights or to amend the Agreement).
(c) All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board (or, after
any Person has become an Acquiring Person, by the Continuing Directors) in
good faith shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company or the Continuing Directors to
any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, of the certificates representing the shares of Common Stock
and Series A Preference 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
Right Certificates (and, prior to the Distribution Date, the certificates
representing the shares of Common Stock and Series A Preference 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 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 (or, after any Person has become an Acquiring Person,
a majority of the Continuing Directors) determines in its good faith judgment
that severing the invalid 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 or Continuing Directors, as the case may be.
Section 32. Governing Law. This Agreement, each Right and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Pennsylvania and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State, except that the
rights and obligations of the Rights Agent shall be governed by the law of the
State of New York.
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
one and the same instrument.
Section 34. Descriptive Headings. The captions herein are included
for convenience of reference only, do not constitute a part of this Agreement
and shall be ignored in the construction and interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and
year first above written.
SUN COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Senior Vice President
and Chief Financial
Officer
Ten Penn Center
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Senior Vice
President and Chief
Financial Officer
with a copy to:
Vice President and
General Counsel
(at the same address)
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Vice
President
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Tenders and
Exchanges
Administration
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES B PARTICIPATING CUMULATIVE
PREFERENCE STOCK
OF
SUN COMPANY, INC.
Pursuant to Section 1522 of the
Business Corporation Law of the
Commonwealth of Pennsylvania
We, _________________, [Title], and ____________, [Title], of Sun
Company, Inc., a corporation organized and existing under the Business
Corporation Law of the Commonwealth of Pennsylvania ("Pennsylvania Law"), in
accordance with the provisions thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Articles of Incorporation of the Corporation, the Board of Directors on
February 1, 1996, adopted the following resolution creating a series of Series
B Preference Stock in the amount and having the designation, voting powers,
preferences and relative, participating, optional and other special rights and
qualifications, limitations and restrictions thereof as follows:
Section 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series B Participating Cumulative Preference
Stock" (the "Series B Preference Stock"), and the number of shares
constituting such series shall be 1,743,019. Such number of shares of the
Series B Preferred Stock may be increased or decreased by resolution of the
Board of Directors; provided that no decrease shall reduce the number of
shares of Series B Preference Stock to a number less than the number of shares
then outstanding plus the number of shares issuable upon exercise or
conversion of outstanding rights, options or other securities issued by the
Corporation.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series B Preference Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable on or
before March 13, June 13, September 13 and December 13 (or, if any such day is
not a business day, on the next succeeding business day) of each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of any share or fraction of a share of Series B Preference Stock, in
an amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 and (b) subject to the provision for adjustment hereinafter set forth,
100 times the aggregate per share amount of all cash dividends or other
distributions and 100 times the aggregate per share amount of all non-cash
dividends or other distributions (other than (i) a dividend payable in shares
of Common Stock, par value $1.00 per share, of the Corporation (the "Common
Stock")) or (ii) a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise)), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series B Preference Stock. If the Corporation shall
at any time after February 1, 1996 (the "Rights Declaration Date") pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of shares of
Series B Preference Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior
to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series B Preference Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other
than as described in clauses (i) and (ii) of the first sentence of
paragraph (A)); provided that if no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment
Date (or, with respect to the first Quarterly Dividend Payment Date, the
period between the first issuance of any share or fraction of a share of
Series B Preference Stock and such first Quarterly Dividend Payment Date),
a dividend of $1.00 per share on the Series B Preference Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preference Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series B Preference
Stock, unless the date of issue of such shares is on or before the record
date for the first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue and be cumulative from the date of
issue of such shares, or unless the date of issue is a date after the
record date for the determination of holders of shares of Series B
Preference Stock entitled to receive a quarterly dividend and on or before
such Quarterly Dividend Payment Date, in which case dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
shares of Series B Preference Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series B Preference Stock entitled to
receive payment of a dividend or distribution declared thereon, which
record date shall not be more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. Except as otherwise provided by Article
FOURTH of the Articles of Incorporation of the Corporation or by statute,
holders of Series B Preference Stock shall have no voting rights, and their
consent shall not be required for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preference Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding shares of Series B
Preference Stock shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions on,
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preference Stock;
(ii) declare or pay dividends on, or make any other distributions on,
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preference Stock,
except dividends paid ratably on the Series B Preference Stock and all such
other parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem, purchase or otherwise acquire for value any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preference Stock; provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of stock of the
Corporation ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series B Preference Stock; or
(iv) redeem, purchase or otherwise acquire for value any shares of
Series B Preference Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up)
with the Series B Preference Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of Series B Preference Stock and all such other
parity stock upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for value any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in such
manner.
Section 5. Reacquired Shares. Any shares of Series B Preference
Stock redeemed, purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Series B Preference Stock without
designation as to series and may be reissued as part of a new series of
Series B Preference Stock to be created by resolution or resolutions of the
Board of Directors as permitted by the Articles of Incorporation or as
otherwise permitted under Pennsylvania Law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series B
Preference Stock unless, prior thereto, the holders of shares of Series B
Preference Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment; provided that the holders of shares of
Series B Preference Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of
Common Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Preference Stock, except distributions made ratably on the Series B Preference
Stock and all such other parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. If the Corporation shall at any time after the
Rights Declaration Date pay any dividend on Common Stock payable in shares of
Common Stock or effect a subdivision or combination of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series B Preference Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. If the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash or any other property, then in any such case the shares of
Series B Preference Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash or any other property, as the case may be, into which or for
which each share of Common Stock is changed or exchanged. If the Corporation
shall at any time after the Rights Declaration Date pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision or combination
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Preference Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The Series B Preference Stock shall not
be redeemable.
Section 9. Rank. The Series B Preference Stock shall rank junior
(as to dividends and upon liquidation, dissolution and winding up) to all
other series of the Corporation's preferred stock except any series that
specifically provides that such series shall rank junior to the Series B
Preference Stock.
Section 10. Fractional Shares. Series B Preference Stock may be
issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series B Preference Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
this __ day of February, 1996.
_________________________
[Title]
Attest:
______________________
[Title]
Exhibit B
[Form of Right Certificate]
No. R- ____________ Rights
[NOT EXERCISABLE AFTER THE EARLIER OF FEBRUARY 12, 2006 AND THE DATE ON WHICH
THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET
FORTH IN THE RIGHTS AGREEMENT.](1) [NOT EXERCISABLE AFTER THE EARLIEST OF
FEBRUARY 12, 2006, THE DATE ON WHICH THE RIGHTS EVIDENCED HEREBY ARE REDEEMED
OR EXCHANGED BY THE COMPANY AS SET FORTH IN THE RIGHTS AGREEMENT AND THE DATE
OF REDEMPTION BY THE COMPANY OF THE SHARE OF SERIES A CUMULATIVE PREFERENCE
STOCK, WITHOUT PAR VALUE, OF THE COMPANY TO WHICH THE RIGHTS EVIDENCED HEREBY
RELATE IN ACCORDANCE WITH THE CERTIFICATE OF DESIGNATION FOR SUCH STOCK.](2)
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON
WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY
HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(d) OF THE RIGHTS AGREEMENT.](3)
-------------
(1) To be inserted on Rights Certificates that relate to Common Stock.
(2) To be inserted on Rights Certificates that relate to Series A Preference
Stock.
(3) If applicable, insert this portion of the legend and delete the preceding
sentence.
RIGHT CERTIFICATE
SUN COMPANY, INC.
This Right Certificate certifies that ______________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Rights Agreement dated as of February 1, 1996 (the
"Rights Agreement") between Sun Company, Inc., a Pennsylvania corporation (the
"Company"), and First Chicago Trust Company of New York (the "Rights Agent"))
to purchase from the Company, at any time after the Distribution Date and
prior to the Expiration Date, ___ one-hundredth[s] of a fully paid,
nonassessable share of Series B Participating Cumulative Preference Stock (the
"Series B Preference Stock") of the Company at a purchase price of $100.00 per
one one-hundredth of a share (the "Purchase Price"), payable in lawful money
of the United States of America, upon surrender of this Right Certificate,
with the form of election to purchase and related certificate duly executed,
and payment of the Purchase Price at an office of the Rights Agent designated
for such purpose.
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the
number and kind of shares issuable upon exercise of each Right) and the
Purchase Price set forth above are as of February 12, 1996, and may have been
or in the future be adjusted as a result of the occurrence of certain events,
as more fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a transferee
of an Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such, 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.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights Agent
designated for such purpose and subject to the terms and conditions set forth
in the Rights Agreement, any Rights Certificate or Certificates may be
transferred or exchanged for another Rights Certificate or Certificates
evidencing a like number of Rights as the Rights Certificate or Certificates
surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors of the Company may, at its option, (a) at any time prior to the
earlier of (i) the close of business on the tenth day after the Stock
Acquisition Date (or such later date as a majority of the Continuing Directors
may designate prior to such time as the Rights are no longer redeemable) and
(ii) the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right; or (b) at any time
after any Person becomes an Acquiring Person (but before such Person becomes
the Beneficial Owner of 50% or more of the shares of Voting Stock then
outstanding), exchange all or part of the then outstanding Rights (other than
Rights held by the Acquiring Person and certain related Persons) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right. If
the Rights shall be exchanged in part, the holder of this Right Certificate
shall be entitled to receive upon surrender hereof another Right Certificate
or Certificates for the number of whole Rights not exchanged.
No fractional shares of Series B Preference Stock are required to be
issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are multiples of one one-hundredth of a share of Series B
Preference Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Certificates for the number of whole
Rights not exercised.
No holder of this Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock 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 Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers.
Dated as of ________________, 199_
SUN COMPANY, INC.
By______________________
Title:
[SEAL]
Attest:
______________________
Secretary
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK,
as Rights Agent
By____________________
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________________________
hereby sells, assigns and transfers unto _________________
__________________________________________________________
(Please print name and address of transferee)
__________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _____________________, 19__
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ___are ___are not
being assigned 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 in 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 Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, 19 __ ________________________
Signature
__________
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
__________
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights represented by the Right Certificate.)
To: Sun Company, Inc.
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase shares of Series B
Preference Stock issuable upon the exercise of the Rights (or such 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 securities
be issued in the name of and delivered to:
Please insert social security
or other identifying number
__________________________________________________________
(Please print name and address)
___________________________________________________________
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right 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: ________________, 19__
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right 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 in 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 Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, 19 __ ________________________
Signature
__________
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
__________
Exhibit C
SUN COMPANY, INC.
STOCKHOLDER RIGHTS PLAN
Summary of Terms
Form of Security: The Board of Directors has declared a
dividend of one preference stock purchase
right for each outstanding share of the
Company's Common Stock and two preference
stock purchase rights for each outstanding
share of the Company's Series A Cumulative
Preference Stock, without par value (the
"Series A Preference Stock") (equivalent to
one purchase right for each outstanding
Depositary Receipt (as defined below)),
payable to holders of record as of the close
of business on February 12, 1996 (each a
"Right" and collectively, the "Rights").
Transfer: Prior to the Distribution Date,(1) the Rights
will be evidenced by the certificates for and
will be transferred with the Common Stock and
the Series A Preference Stock, and the
registered holders of the Common Stock and the
Series A Preference Stock will be deemed to be
the registered holders of the Rights. Each
Series A Depositary Share (evidenced by a
Depositary Receipt) will represent an interest
in one-half of a share of Series A Preference
Stock, together with one Right attached
thereto. Upon the redemption of any share of
Series A Preference Stock for Common Stock,
the Right or Rights associated with such share
of Series A Preference Stock will expire and
the former holder of such share will be issued
Rights in connection with the Common Stock
received upon such redemption.
After the Distribution Date, the Rights Agent will
mail separate certificates evidencing the Rights to
each record holder of the Common Stock and the
Series A Preference Stock as of the close of
business on the Distribution Date, and thereafter
the Rights will be transferable separately from the
Common Stock and the Series A Preference Stock.
Exercise: Prior to the Distribution Date, the Rights
will not be exercisable.
After the Distribution Date, each Right will be
exercisable to purchase, for $100.00 (the "Purchase
Price"), one one-hundredth of a share of Series B
Participating Cumulative Preference Stock, without
par value, of the Company.
Flip-In: If any person or group (with certain
exceptions) (an "Acquiring Person") becomes
the beneficial owner of 15% or more of the
Company's Voting Stock, then each Right
(other than Rights beneficially owned by the
Acquiring Person and certain affiliated
persons) will entitle the holder to purchase,
for the Purchase Price, a number of shares of
the Company's Common Stock having a market
value of twice the Purchase Price.
Flip-Over: If, after any person has become an Acquiring
Person, (1) the Company is involved in a merger or
other business combination in which the Company is
not the surviving corporation or its Common Stock
is exchanged for other securities or assets or (2)
the Company and/or one or more of its subsidiaries
sell or otherwise transfer assets or earning power
aggregating more than 50% of the assets or earning
power of the Company and its subsidiaries, taken as
a whole, then each Right will entitle the holder to
purchase, for the Purchase Price, a number of
shares of common stock of the other party to such
business combination or sale (or in certain
circumstances, an affiliate) having a market value
of twice the Purchase Price.
Exchange: At any time after any person has become an
Acquiring Person (but before any person
becomes the beneficial owner of 50% or more
of the Company's Voting Stock), a majority of
the Continuing Directors may exchange all or
part of the Rights (other than the Rights
beneficially owned by the Acquiring Person
and certain affiliated persons) for shares of
Common Stock at an exchange ratio of one
share of Common Stock per Right.
Redemption: The Board of Directors may redeem all of the Rights
at a price of $.01 per Right at any time prior to
the close of business on the 10th day after public
announcement that any person has become an
Acquiring Person (subject to extension by a
majority of the Continuing Directors).
After any person has become an Acquiring Person,
the Rights may be redeemed only with the approval
of a majority of the Continuing Directors.
Expiration: The Rights will expire on February 12, 2006, unless
earlier exchanged or redeemed or, in the case of
Rights associated with shares of Series A
Preference Stock, until such Rights expire upon the
redemption of such stock by the Company.
Amendments: Prior to the Distribution Date, the Rights
Agreement may be amended in any respect.
After the Distribution Date, the Rights Agreement
may be amended in any respect that does not
adversely affect the Rights holders (other than any
Acquiring Person and certain affiliated persons).
After any person has become an Acquiring Person,
the Rights Agreement may be amended only with the
approval of a majority of the Continuing Directors.
Voting Rights: Rights holders have no rights as a
stockholder of the Company, including the
right to vote and to receive dividends.
Antidilution The Rights Agreement includes
Provisions: antidilution provisions designed to prevent efforts
to diminish the efficacy of the Rights.
Taxes: While the dividend of the Rights will not be
taxable to stockholders or to the Company,
stockholders or the Company may, depending upon the
circumstances, recognize taxable income in the
event that the Rights become exercisable as set
forth above.
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(1)"Distribution Date" means the earlier of:
(1) the 10th day after public announcement that any person or group
has become the beneficial owner of 15% or more of the Company's
Voting Stock and
(2) the 10th business day after the date of the commencement of a
tender or exchange offer by any person which would, if consummated,
result in such person becoming the beneficial owner of 15% or more of
the Company's Voting Stock,
in each case, subject to extension by a majority of the Continuing
Directors.
"Continuing Director" means any member of the Board of Directors who
was a member of the Board prior to the time an Acquiring Person (as
defined below) becomes such or any person who is subsequently elected
to the Board if such person is recommended or approved by a majority
of the Continuing Directors. Continuing Directors do not include an
Acquiring Person, an affiliate or associate of an Acquiring Person or
any representative or nominee of the foregoing.
"Voting Stock" means all of the outstanding shares of Common Stock,
and the outstanding shares of any class or series of stock having
preference over the Common Stock as to dividends or as to liquidation
entitled to vote on each matter on which the holders of Common Stock
shall be entitled to vote, and reference to a percentage of shares of
Voting Stock shall refer to the percentage of votes entitled to be
cast by such shares.
________________
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of
the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement.
