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Exhibit 99.6
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LOCTITE CORPORATION
and
THE FIRST NATIONAL BANK OF BOSTON, as
Rights Agent
Rights Agreement
Dated as of April 14, 1994
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions........................... 1
Section 2. Appointment of Rights Agent................... 8
Section 3. Issue of Right Certificates................... 8
Section 4. Form of Right Certificate..................... 10
Section 5. Countersignature and Registration............. 11
Section 6. Transfer, Split-Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificate...................... 12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights..................... 12
Section 8. Cancellation and Destruction of
Right Certificates............................ 15
Section 9. Reservation and Availability of
Common Shares................................. 15
Section 10. Common Shares Record Date..................... 16
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of
Rights........................................ 16
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares........................... 25
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.................... 25
Section 14. Fractional Rights and Fractional Shares....... 28
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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................... 30
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........................ 34
Section 22. Issuance of New Right Certificates............ 35
Section 23. Redemption and Termination.................... 35
Section 24. Exchange......................................38
Section 25. Notice of Certain Events...................... 38
Section 26. Notices....................................... 39
Section 27. Supplements and Amendments.................... 40
Section 28. Determination and Actions by the Board
of Directors of the Corporation, etc.......... 41
Section 29. Successors.................................... 41
Section 30. Benefits of this Agreement.................... 41
Section 31. Severability.................................. 42
Section 32. Governing Law................................. 42
Section 33. Counterparts.................................. 42
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Section 34. Descriptive Headings.......................... 42
Signatures.................................... 43
Exhibit A-1 - Form of Transferee Agreement
Exhibit A-2 - Form of Transferee Executive Officer's Certificate
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Common Shares
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Defined Term Cross Reference Sheet
Acquiring Person---------------------------------Section 1(a)
Act----------------------------------------------Section 1(b)
Adjustment Shares--------------------------------Section 11(a)(ii)
Adjusted Number of Shares------------------------Section 11(a)(iii)
Adjusted Purchase Price--------------------------Section 11(a)(iii)
Adverse Person-----------------------------------Section 1(c)
Affiliate----------------------------------------Section 1(d)
Agreement----------------------------------------Preface
Associate----------------------------------------Section 1(e)
Beneficial Owner---------------------------------Section 1(f)
beneficially own---------------------------------Section 1(f)
Business Day-------------------------------------Section 1(g)
capital stock equivalent-------------------------Section 11(a)(iii)
Close of business--------------------------------Section 1(h)
Common Shares------------------------------------Section 1(i)
Corporation--------------------------------------Preface
current per share market price-------------------Section 11(d)(i)
Disinterested Director---------------------------Section 1(j)
Distribution Date--------------------------------Section 1(k)
Distribution Transaction-------------------------Section 1(l)
equivalent common shares-------------------------Section 11(b)
Exchange Act-------------------------------------Section 1(d)
Exchange Ratio-----------------------------------Section 24(a)
Final Expiration Date----------------------------Section 7(a)
Grandfathered Stockholder------------------------Section 1(n)
Henkel-------------------------------------------Section 1(o)
Henkel Percentage--------------------------------Section 1(p)
Interested Stockholder---------------------------Section 1(q)
Xxxxxxx Family Group-----------------------------Section 1(n)
Permitted Offer----------------------------------Section 1(r)
Permitted Transfer-------------------------------Section 1(s)
Permitted Transferee-----------------------------Section 1(t)
Person-------------------------------------------Section 1(u)
Principal Party----------------------------------Section 13(b)
Proration Factor---------------------------------Section 11(a)(iii)
Purchase Price-----------------------------------Section 4(a)
Record Date--------------------------------------Preface
Redemption Date----------------------------------Section 7(a)
Redemption Price---------------------------------Section 23(a)(i)
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Right--------------------------------------------Preface
Right Certificate--------------------------------Section 3(a)
Rights Agents------------------------------------Preface
Rights Agreement---------------------------------Section 3(c)
Section 11(a)(ii) Event--------------------------Section 1(w)
Section 13 Event---------------------------------Section 1(x)
Security.----------------------------------------Section 11(d)
Shares Acquisition Date--------------------------Section 1(y)
Subsidiary---------------------------------------Section 1(z)
Summary of Rights--------------------------------Section 3(b)
then outstanding---------------------------------Section 1(f)(iii)
Trading Day--------------------------------------Section 11(d)(i)
Transfer-----------------------------------------Section 1(aa)
Transferee Agreement-----------------------------Section 1(c)
Transferee Certificate---------------------------Section 1(c)
Transfer Percentage------------------------------Section 1(bb)
Triggering Event---------------------------------Section 1(cc)
Unaffiliated Director----------------------------Section 1(dd)
voting securities--------------------------------Section 13(a)
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of April 14, 1994 (the
"Agreement"), between Loctite Corporation, a Delaware corporation (the
"Corporation"), and The First National Bank of Boston, a national banking
association (the "Rights Agent").
The Board of Directors of the Corporation has authorized and
declared a dividend of one right (a "Right") for each Common Share (as
hereinafter defined) of the Corporation outstanding at the close of business on
April 29, 1994 (the "Record Date"), each Right representing the right to
purchase one Common Share, upon the terms and subject to the conditions herein
set forth, and has further authorized and directed the issuance of one Right
with respect to each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be issued with respect to Common Shares that shall
become outstanding after the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date in accordance with the provisions
of Section 22 of this Agreement.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 10% or more of the then outstanding Common Shares (other
than as a result of a Permitted Offer (as hereinafter defined)) or was such a
Beneficial Owner at any time after the date hereof, whether or not such person
continues to be the Beneficial Owner of 10% or more of the then outstanding
Common Shares. Notwithstanding the foregoing, (A) the term "Acquiring Person"
shall not include (i) the Corporation, (ii) any Subsidiary of the Corporation,
(iii) any employee benefit plan of the Corporation or of any Subsidiary of the
Corporation, (iv) any Person or entity organized, appointed or established by
the Corporation for or pursuant to the terms of any such plan, or (v) any
Grandfathered Stockholder and (B) no Person (including, without limitation, any
Grandfathered Stockholder) shall become an "Acquiring Person" (and no
Grandfathered Stockholder shall cease to be a Grandfathered Stockholder):
(i) as a result of the acquisition of Common Shares
by the Corporation which, by reducing the number of Common Shares outstanding,
increases the proportional number of shares beneficially owned by such Person
together with all
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Affiliates and Associates of such Person; provided that if (1) a Person
(including, without limitation, any Grandfathered Stockholder) would become an
Acquiring Person (but for the operation of this subclause (i)) as a result of
the acquisition of Common Shares by the Corporation, and (2) after such share
acquisition by the Corporation, such Person, or an Affiliate or Associate of
such Person, becomes the Beneficial Owner of any additional Common Shares, then
such Person shall be deemed an Acquiring Person; or
(ii) if (1) within five Business Days after such
Person would otherwise have become an Acquiring Person (but for the operation of
this subclause (ii)), such Person notifies the Board of Directors that such
Person did so inadvertently, and (2) within two Business Days after such
notification, such Person divests itself of a sufficient number of Common Shares
so that such Person is the Beneficial Owner of such number of Common Shares that
such Person no longer would be an Acquiring Person.
(b) "Act" shall mean the Securities Act of 1933, as amended
and as in effect on the date of this Agreement.
(c) "Adverse Person" shall mean any Person declared to be an
Adverse Person by a majority of the Unaffiliated Directors of the Board of
Directors of the Corporation after having determined in its business judgment
that beneficial ownership by such Person of 10% or more of the outstanding
Common Shares would be reasonably likely to materially adversely affect the
Corporation or its stockholders. In the event that in reliance upon the
representations and warranties of any Person set forth in the Transferee
Agreement for such Person, the Transfer Certificate for such Person and any
other instrument or document delivered to Loctite by such Person, the
Unaffiliated Directors determined that such Person was not an Adverse Person,
the Unaffiliated Directors may at any time thereafter declare such Person to be
an Adverse Person as of the date of such declaration if the Unaffiliated
Directors should at any time determine that any representation and warranty made
by such Person in its Transferee Agreement, its Transferee Certificate or any
such other document or instrument delivered to Loctite by such Person was
incorrect at the time that it was made, and upon such declaration by the
Unaffiliated Directors, such Person shall no longer be deemed to be a Permitted
Transferee for any purpose under this Agreement (including, without limitation,
the definition of Grandfathered Stockholder).
(d) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended and in effect on the date of this Agreement (the
"Exchange Act").
(e) "Associate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Exchange Act;
provided, however,
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that notwithstanding anything herein to the contrary, no Person shall be deemed
an Associate of Henkel for any purpose hereof or at any time hereunder.
(f) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (other than an agreement by Henkel to
Transfer to a proposed Permitted Transferee those Common Shares subject to such
proposed Permitted Transfer and customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) relating to the acquisition, holding, voting (except to
the extent contemplated by the proviso to Section l(f)(ii)(B)) or disposing of
any securities of the Corporation.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, (A) Henkel shall not be deemed the Beneficial Owner
of, or to beneficially own, any Common Shares held by any member of the Xxxxxxx
Family Group as a result of the right of first refusal over such Common Shares
held by Henkel until and to the extent that Henkel has exercised its right of
first refusal and purchased such Common Shares; (B)
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the phrase "then outstanding", when used with reference to a Person's Beneficial
Ownership of securities of the Corporation, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be
deemed to own beneficially hereunder; and (C) the Corporation shall not be
deemed the Beneficial Owner of, or to beneficially own, any Common Shares held
by any member of the Xxxxxxx Family Group as a result of the right of first
refusal over such Common Shares that may from time to time be held by the
Corporation and such Common Shares shall be deemed issued and outstanding for
all purposes hereunder, in each case, until and to the extent that the
Corporation has exercised its right of first refusal and purchased such Common
Shares.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday or federal holiday.
(h) "Close of business" on any given date shall mean 5:00
P.M., Boston time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston time, on the next succeeding
Business Day.
(i) "Common Shares" when used with reference to the
Corporation shall mean the shares of Common Stock, par value $0.01 per share, of
the Corporation or, in the event of a subdivision, combination or consolidation
with respect to such shares of Common Stock, the shares of Common Stock
resulting from such subdivision, combination or consolidation. "Common Shares"
when used with reference to any Person other than the Corporation shall mean the
capital stock (or equity interest) with the greatest voting power of such other
Person or, if such other Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(j) "Disinterested Director" means any director of the Board
of Directors of the Corporation who is neither an officer or employee of the
Corporation nor any Person proposing or attempting to effect a business
combination or similar transaction with the Corporation (including, without
limitation, a merger, tender offer or exchange offer, sale of substantially all
of the Corporation's assets, or liquidation of the Corporation's assets), any
Affiliate or Associate of such Person or any other Person acting directly or
indirectly on behalf of, or as a representative of, or in concert with, any such
Person, Affiliate or Associate.
(k) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
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(l) "Distribution Transaction" means any Transfer of Common
Shares by Henkel (i) pursuant to a public offering of those Common Shares
registered under Section 5 of the Securities Act of 1933, as amended (the
"Securities Act"), in connection with which, each of the underwriters for such
public offering certifies to the Corporation that such Common Shares were widely
distributed in connection with such public offering and that, to the best of
such underwriter's knowledge, (A) no transferee of such Common Shares in such
public offering beneficially owns, together with the Affiliates and Associates
of such transferee and after giving effect to the sale of such Common Shares in
such public offering, more than 1.0% of the then outstanding Common Shares and
(B) no more than three transferees of such Common Shares in such public offering
beneficially own, in each case together with the Affiliates and Associates of
such transferee and after giving effect to the sale of such Common Shares in
such public offering, more than 0.5% of the then outstanding Common Shares; or
(ii) pursuant to a broker's transaction made in compliance with the requirements
of Rule 144 promulgated under the Securities Act and in connection with which,
the broker who effects such broker's transaction certifies to the Corporation
that such Common Shares were widely distributed in connection with such broker's
transaction and, to the best of such broker's knowledge, (A) no transferee of
such Common Shares in such broker's transaction beneficially owns, together with
the Affiliates and Associates of such transferee and after giving effect to the
sale of such Common Shares in such broker's transaction, more than 1.0% of the
then outstanding Common Shares and (B) no more than three transferees of such
Common Shares in such broker's transaction beneficially own, in each case
together with the Affiliates and Associates of such transferee and after giving
effect to the sale of such Common Shares in such broker's transaction, more than
0.5% of the then outstanding Common Shares.
(m) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(n) "Grandfathered Stockholder" shall mean (i) Henkel, (ii)
Xx. Xxxxxx X. Xxxxxxx, Xx. Xxxxx X. Xxxxxxx, Xx. Xxxxxxxxx X. Xxxxxxx, Xx.
Xxxxxxxx X. Xxxxxxx, Xx. Xxxxx X. Xxxxxxx, Xx. Xxxxx X. Xxxxxxx, Xx. Xxxxxx
Xxxxxx, Management I, Limited and Management II, Limited, as a "group" (as such
term is defined or used under Rule 13d-5(b) of the General Rules and Regulations
under the Exchange Act) (collectively as such group, the "Xxxxxxx Family Group")
and (iii) any Permitted Transferee; provided, however, that, except as provided
in Section 1(a)(B) hereof, (A) Henkel shall cease to be a Grandfathered
Stockholder at the time after the date hereof, Henkel, together with all
Affiliates of Henkel, beneficially owns a percentage of the outstanding Common
Shares in excess of the Henkel Percentage then in effect (other than as a result
of a Permitted Offer), (B) the Xxxxxxx Family Group shall cease to be a
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Grandfathered Stockholder at the time after the date hereof any member of the
Xxxxxxx Family Group, or an Affiliate or Associate of any such member of the
Xxxxxxx Family Group, beneficially owns any additional Common Shares (other than
as a result of a stock dividend, a stock split, a grant by the Corporation
pursuant to a directors benefit plan established by the Corporation of Common
Shares or options to purchase Common Shares (and the exercise thereof) or a
Permitted Offer), and (C) any Permitted Transferee shall cease to be a
Grandfathered Stockholder at the time such Permitted Transferee, or an Affiliate
or Associate of such Permitted Transferee, beneficially owns any additional
Common Shares (other than as a result of a stock dividend, a stock split or a
Permitted Offer).
(o) "Henkel" shall mean Xxxxxx Corporation, a Delaware
corporation.
(p) "Henkel Percentage" shall mean 35% on the date hereof.
From and after the date hereof, the Henkel Percentage shall be subject to
adjustment, as follows: (i) in the event of any Transfer of Common Shares by
Henkel or any of its Affiliates (other than to an Affiliate of Henkel) by any
means other than a Distribution Transaction, the Henkel Percentage then in
effect shall be reduced by the Transfer Percentage in respect of such Transfer,
(ii) in the event of Transfers of Common Shares aggregating more than 10% of the
outstanding Common Shares by Henkel or any of its Affiliates by means of
Distribution Transactions, the Henkel Percentage then in effect shall be reduced
by the aggregate Transfer Percentages in respect of such Transfers aggregating
more than 10% of the outstanding Common Shares and (iii) in the event the
Corporation acquires any Common Shares, the Henkel Percentage immediately
following such acquisition shall be equal to the greater of (A) the Henkel
Percentage immediately prior to such acquisition and (B) the percentage of the
outstanding Common Shares beneficially owned by Henkel immediately following
such acquisition.
(q) "Interested Stockholder" shall mean any Acquiring Person
or any Affiliate or Associate of an Acquiring Person or any other Person in
which any such Acquiring Person, Affiliate or Associate has an interest, or any
other Person acting directly or indirectly on behalf of or in concert with any
such Acquiring Person, Affiliate or Associate.
(r) "Permitted Offer" shall mean a tender or exchange offer
for all outstanding Common Shares (A) which is at a price and on terms
determined, prior to the purchase of shares under such tender or exchange offer,
by at least (i) a majority of the Disinterested Directors and (ii) a majority of
all of the members of the Board of Directors, to be adequate (taking into
account all factors that such directors deem relevant) and otherwise in the best
interests of the Corporation, its stockholders and its other relevant
constituencies (other than the Person or any Affiliate or Associate thereof on
whose basis
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the offer is being made) taking into account all factors that such directors may
deem relevant or (B) (i) which remains open for a period of at least 60 days
after the tender or exchange offer has commenced and (ii) the consummation of
which results in the Person on whose basis the tender or exchange offer is made
becoming the Beneficial Owner of more than 50% of the outstanding Common Shares.
(s) "Permitted Transfer" means any Transfer of Common Shares
by Henkel, by the Xxxxxxx Family Group as a whole, or by any Permitted
Transferee (i) to any Person that (A) has not been declared an Adverse Person by
the Unaffiliated Directors, (B) does not beneficially own, after giving effect
to such Transfer, (1) in the case of a Transfer from the Xxxxxxx Family Group or
any Permitted Transferee, any Common Shares other than the Common Shares
transferred by the Xxxxxxx Family Group or such Permitted Transferee, as
applicable, to such Person in such Transfer, or (2) in the case of a Transfer
from Henkel, a percentage of the then outstanding Common Shares in excess of the
lesser of (I) the Henkel Percentage in effect immediately prior to such proposed
Permitted Transfer and (II) the sum of 0.3% of the then outstanding Common
Shares and the percentage of the then outstanding Common Shares to be
transferred by Henkel to such Person in such proposed Permitted Transfer, (C) at
least 30 days prior to the consummation of such Transfer, executes and delivers
to the Corporation an agreement, substantially in the form of Exhibit A-1
attached hereto (a "Transferee Agreement") and (D) immediately prior to the
consummation of such Transfer, executes and delivers to the Corporation an
executive officer's certificate, substantially in the form of Exhibit A-2
attached hereto (a "Transferee Certificate") and (ii) that is consummated on the
"Closing Date" referred to in the Transferee Agreement for such proposed
Permitted Transfer and pursuant to the terms and conditions set forth in the
"Acquisition Agreement" referred to in such Transferee Agreement.
(t) "Permitted Transferee" means any transferee of Common
Shares pursuant to a Permitted Transfer.
(u) "Person" shall mean any individual, firm, partnership,
corporation, trust, association, joint venture or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(v) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(w) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.
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(x) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(y) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the
Corporation or an Acquiring Person that an Acquiring Person has become such.
(z) "Subsidiary" of any Person shall mean any corporation or
other Person of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
(aa) "Transfer" shall mean any sale, assignment, transfer or
other disposition.
(bb) "Transfer Percentage" means with respect to any Transfer
of Common Shares, the percentage of the then outstanding Common Shares subject
to such Transfer.
(cc) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
(dd) "Unaffiliated Director" means, with respect to any
proposed Permitted Transfer, any director of the Board of Directors of the
Corporation who is neither a designee or representative of the proposed
transferor in respect of such Proposed Transfer, or any Affiliate or Associate
of such proposed transferor, nor an officer or employee of the Corporation.
Section 2. Appointment of Rights Agent. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of Common Shares) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier
of (i) the Shares Acquisition Date or (ii) the close of business on the tenth
day (or such later date as may be determined by action of the Corporation's
Board of Directors) after the date of the commencement by any Person (other than
the Corporation, any Subsidiary of the Corporation, any employee benefit plan of
the Corporation or of any Subsidiary of the Corporation or any Person or entity
organized, appointed or established by the Corporation for or pursuant to the
terms of any such plan) of, or of the first public
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announcement of the intention of any Person (other than the Corporation, any
Subsidiary of the Corporation, any employee benefit plan of the Corporation or
of any Subsidiary of the Corporation or any Person or entity organized,
appointed or established by the Corporation for or pursuant to the terms of any
such plan) to commence (which intention to commence remains in effect for five
Business Days after such announcement), a tender or exchange offer the
consummation of which would result in any Person becoming an Acquiring Person
(including, in the case of both (i) and (ii), any such date which is after the
date of this Agreement and prior to the issuance of the Rights), the earlier of
such dates being herein referred to as the "Distribution Date", (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of the underlying
Common Shares (including a transfer to the Corporation); provided, however, that
if a tender offer prior to the occurrence of a Distribution Date is terminated,
then no Distribution Date shall occur as a result of such tender offer. As soon
as practicable after the Distribution Date, the Corporation will prepare and
execute, the Rights Agent will countersign, and the Corporation will send or
cause to be sent by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Corporation, a Right
Certificate, substantially in the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held. As of and
after the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to Purchase Common Shares,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as of
the close of business on the Record Date, at the address of such holder shown on
the records of the Corporation. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the Rights will
be evidenced by such certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with such Common Shares.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence
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of this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, and the Redemption Date or the Final Expiration Date shall be
deemed also to be certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between Loctite Corporation
and The First National Bank of Boston, dated as of April 14, 1994 (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 Loctite
Corporation. Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. Loctite Corporation will mail to the holder of
this certificate a copy of the Rights Agreement without charge after receipt of
a written request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and certain related persons, whether currently held by or on behalf
of such Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Corporation purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Corporation shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificate. (a) The Right
Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Corporation may
deem appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Right Certificates shall entitle the holders thereof to purchase such number
of Common Shares as shall be set forth therein at the price per Common Share set
forth therein (the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of
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each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and void pursuant to
Section 7(e) of this Agreement and any Right Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) 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). Accordingly,
this Right Certificate and the Rights represented hereby are
null and void.
Provisions of Section 7(e) of this Rights Agreement shall be operative whether
or not the foregoing legend is contained on any such Right Certificate.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Corporation by its Chairman of
the Board, its Chief Executive Officer, its President, any of its Vice
Presidents, or its Treasurer, either manually or by facsimile signature, shall
have affixed thereto the Corporation's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Corporation, either
manually or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Corporation who shall have signed
any of the Right Certificates shall cease to be such officer of the Corporation
before countersignature by the Rights Agent and issuance and delivery by the
Corporation, such Right Certificates may nevertheless be countersigned by the
Rights Agent and issued and delivered by the Corporation with the same force and
effect as though the person who signed such Right Certificates had not ceased to
be such officer of the Corporation; and any Right Certificate may be signed on
behalf of the Corporation by any person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the Corporation to sign
such Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated as the appropriate place for
surrender of such Right Certificate or transfer, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of
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the Right Certificates, the number of Rights evidenced on its face by each of
the Right Certificates and the certificate number and the date of each of the
Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificate.
Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof,
at any time after the close of business on the Distribution Date, and at or
prior to the close of business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
Common Shares as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Corporation shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the
Corporation shall reasonably request. Thereupon the Rights Agent shall, subject
to Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Corporation may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
Upon receipt by the Corporation 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
Corporation's request, reimbursement to the Corporation 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 Corporation
will make and deliver a new Right Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or
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in part at any time after the Distribution 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 of the aggregate Purchase Price for the total number of Common Shares
(or other securities, as the case may be) as to which such surrendered Rights
are exercised, at or prior to the earliest of (i) the close of business on April
14, 2004 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") or (iii) the
consummation of a transaction contemplated by Section 13(d) hereof.
(b) The Purchase Price for each Common Share pursuant to the
exercise of a Right shall initially be $175.00, shall be subject to adjustment
from time to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the Purchase Price for the Common
Shares (or other securities, as the case may be) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 6 hereof by certified check,
cashier's check or money order payable to the order of the Corporation, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Common Shares certificates for the number of Common Shares to be
purchased and the Corporation hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Corporation, in its sole
discretion, shall have elected to deposit the Common Shares issuable upon
exercise of the Rights hereunder into a depositary, requisition from the
depositary agent depositary receipts representing such number of Common Shares
as are to be purchased (in which case certificates for the Common Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Corporation will direct the depositary agent to comply
with such requests, (ii) when appropriate, requisition from the Corporation the
amount of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after receipt thereof,
deliver such cash to or upon the order of the registered holder of such Right
Certificate. In the event that the Corporation is obligated to issue other
securities of the Corporation pursuant to Section 11(a) hereof, the Corporation
will make all arrangements necessary so that such other securities are available
for distribution by the Rights Agent, if and when appropriate.
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In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii), the Rights Agent shall return such Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by such Right
Certificate no longer include the rights provided by Section 11(a)(ii) of the
Rights Agreement and if less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on the Right
Certificate the number of Rights represented thereby which continue to include
the rights provided by Section 11(a)(ii).
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof, or the Rights Agent shall place an appropriate notation on
the Right Certificate with respect to those Rights exercised.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any Affiliate or Associate thereof) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any Affiliate or Associate thereof) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has a continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Corporation has determined is part of a
plan, arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Corporation shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the
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certificate contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Corporation
shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Corporation 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 any of the provisions of this Rights Agreement. The Corporation shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Corporation, or shall, at the
written request of the Corporation, destroy such canceled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Corporation.
Section 9. Reservation and Availability of Common Shares. The
Corporation covenants and agrees that at all times prior to the occurrence of a
Section 11(a)(ii) Event it will cause to be reserved and kept available out of
its authorized and unissued Common Shares, or any authorized and issued Common
Shares held in its treasury, the number of Common Shares that will be sufficient
to permit the exercise in full of all outstanding Rights and, after the
occurrence of a Section 11(a)(ii) Event, shall, to the extent reasonably
practicable, so reserve and keep available a sufficient number of Common Shares
(and/or other securities) which may be required to permit the exercise in full
of the Rights pursuant to this Agreement.
So long as the Common Shares (or other securities, as the case
may be) issuable upon the exercise of the Rights may be listed on any national
securities exchange, the Corporation shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
The Corporation covenants and agrees that it will take all
such action as may be necessary to ensure that all Common Shares (or other
securities, as the case may be) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares or other securities
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and non-assessable shares or securities.
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The Corporation further covenants and agrees that it will pay
when due and payable any and all U.S. federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Common Shares (or other securities, as the case may be)
upon the exercise of Rights. The Corporation shall not, however, be required to
pay any transfer tax which may be payable in respect of any transfer or delivery
of Right Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Common Shares (or other securities,
as the case may be) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise, or to issue or to
deliver any certificates or depositary receipts for Common Shares (or other
securities, as the case may be) upon the exercise of any Rights, until any such
tax shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Corporation's reasonable satisfaction that no such tax is due.
The Corporation shall use its best efforts to (i) file, as
soon as practicable following the Shares Acquisition Date (or, if required by
law, at such earlier time following the Distribution Date as so required), a
registration statement under the Act, with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act and the rules and regulations
thereunder) until the date of the expiration of the rights provided by Section
11(a)(ii). The Corporation will also take such action as may be appropriate
under the blue sky laws of the various states.
Section 10. Common Shares Record Date. Each person in whose
name any certificate for Common Shares (or other securities, as the case may be)
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Common Shares (or other securities, as the
case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that, if the date of such surrender and
payment is a date upon which the Common Shares (or other securities, as the case
may be) transfer books of the Corporation are closed, such person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common Shares (or
other securities, as the case may be) transfer books of the Corporation are
open.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
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covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after
the date of this Agreement (A) declare a dividend on the Common Shares payable
in Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of Common Shares or (D) issue
any shares of its capital stock in a reclassification of the Common Shares
(including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Common Shares transfer books of the Corporation were
open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Corporation issuable upon exercise of one
Right. If an event occurs which would require an adjustment under both 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) In the event any Person, alone or together with
its Affiliates and Associates, shall become an Acquiring Person, then proper
provision shall be made so that each holder of a Right (except as provided below
and in Section 7(e) hereof) shall, for a period of 60 days after the later of
the occurrence of any such event or the effective date of an appropriate
registration statement under the Act pursuant to Section 9 hereof, have a right
to receive, upon exercise thereof at a price equal to the then current Purchase
Price, in accordance with the terms of this Agreement, such number of Common
Shares as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of Common Shares for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and dividing that product by (y) 50% of the then current per share market
price of the Corporation's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of such first occurrence (such number of shares being
referred to as the "Adjustment Shares"); provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to
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the provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued (and unreserved) Common Shares to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) and the Rights become so exercisable, notwithstanding any
other provision of this Agreement, to the extent necessary and permitted by
applicable law, each Right shall thereafter represent the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, (x) a number of (or fractions of) Common Shares (up to the
maximum number of Common Shares which may permissibly be issued) and (y) a
number of (or fractions of) other equity securities of the Corporation (or, in
the discretion of the Board of Directors of the Corporation, debt) which the
Board of Directors of the Corporation has determined to have the same aggregate
current market value (determined pursuant to Section 11(d)(i) and (ii) hereof,
to the extent applicable) as one Common Share (such number of (or fractions of)
Common Shares (or other equity securities or debt of the Corporation) being
referred to as a "capital stock equivalent"), equal in the aggregate to the
number of Adjustment Shares; provided, however, if sufficient Common Shares
and/or capital stock equivalents are unavailable, then the Corporation shall, to
the extent permitted by applicable law, take all such action as may be necessary
to authorize additional Common Shares or capital stock equivalents for issuance
upon exercise of the Rights, including the calling of a meeting of stockholders;
and provided, further, that if the Corporation is unable to cause sufficient
Common Shares and/or capital stock equivalents to be available for issuance upon
exercise in full of the Rights, then each Right shall thereafter represent the
right to receive the Adjusted Number of Shares upon exercise at the Adjusted
Purchase Price (as such terms are hereinafter defined). As used herein, the term
"Adjusted Number of Shares" shall be equal to that number of (or fractions of)
Common Shares (and/or capital stock equivalents) equal to the product of (x) the
number of Adjustment Shares and (y) a fraction, the numerator of which is the
number of Common Shares (and/or capital stock equivalents) available for
issuance upon exercise of the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise issuable upon exercise in full
of all Rights (assuming there were a sufficient number of Common Shares
available) (such fraction being referred to as the "Proration Factor"). The
"Adjusted Purchase Price" shall mean the product of the Purchase Price and the
Proration Factor. The Board of Directors of the Corporation may, but shall not
be required to, establish procedures to allocate the right to receive Common
Shares and capital stock equivalents upon exercise of the Rights among holders
of Rights.
(b) In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Common Shares
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entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or shares having the same
rights and privileges as the Common Shares ("equivalent common shares")) or
securities convertible into Common Shares or equivalent common shares at a price
per Common Share or equivalent common share (or having a conversion price per
share, if a security convertible into Common Shares or equivalent common shares)
less than the then current per share market price of the Common Shares (as
determined pursuant to Section 11(d) hereof) on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Common Shares
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares and/or equivalent
common shares so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such current per
share market price, and the denominator of which shall be the number of Common
Shares outstanding on such record date plus the number of additional Common
Shares and/or equivalent common shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Corporation issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be determined in good faith by the Board of
Directors of the Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent.
Common Shares owned by or held for the account of the Corporation 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 in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Common Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the then current per share market price (as determined pursuant
to Section 11(d) hereof) of the Common Shares on such record date, less the fair
market value (as determined in
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good faith by the Board of Directors of the Corporation, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Common Share and the denominator of which shall be such
current per share market price of the Common Shares; provided, however, that in
no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the
Corporation to be issued upon exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the current per share market
price of the Security is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or distribution on such
Security payable in shares of such Security or securities convertible into such
shares, or (B) any subdivision, combination or reclassification of such Security
and prior to the expiration of thirty (30) Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
Security is 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 Security selected by the Board of Directors of the Corporation. If on any
such date no such market maker is
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making a market in the Security, the fair value of the Security on such date as
determined in good faith by the Board of Directors of the Corporation shall be
used. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Common Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Common Shares
are not publicly traded, the "current per share market price" of the Common
Shares shall mean the fair value per share as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent.
(e) Notwithstanding anything herein to the contrary, 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,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest hundred thousandth of a Common Share or
thousandth of any other share or security as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three (3) years from
the date of the transaction which mandates such adjustment or (ii) the Final
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Corporation
other than Common Shares, thereafter the number of other shares so receivable
upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Common Shares contained in Section 11(a) through (c), inclusive,
and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Common
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Corporation subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
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(h) Unless the Corporation shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Common Shares (calculated to the nearest thousandth of a Common Share) obtained
by (i) multiplying (x) the number of Common Shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Corporation 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 Common Shares purchasable 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 Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one 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 Corporation 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 ten (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 Corporation 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 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Corporation, 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 Corporation, new Right Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Right Certificates so to
be distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
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(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Common Shares issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number of Common 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 then par value, if any, of the number of
Common Shares or other securities issuable upon exercise of the Rights, the
Corporation shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue such number of fully paid and non-assessable Common Shares or other
securities 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 Corporation may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the Common Shares or other securities of the Corporation, if any, issuable upon
such exercise over and above the Common Shares or other securities of the
Corporation, if any, issuable upon exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Corporation
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) Notwithstanding anything in this Section 11 to the
contrary, the Corporation 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 (i) any consolidation or subdivision of the Common
Shares, (ii) issuance wholly for cash of Common Shares at less than the current
market price, (iii) issuance wholly for cash of Common Shares or securities
which by their terms are convertible into or exchangeable for Common Shares,
(iv) stock dividends or (v) issuance of rights, options or warrants referred to
in this Section 11, hereafter made by the Corporation to holders of its Common
Shares shall not be taxable to such stockholders.
(n) The Corporation covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Corporation in a transaction which does not
violate Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Corporation in a transaction which does not violate
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related transactions,
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assets or earning power aggregating more than 50% of the assets or earning power
of the Corporation and its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Corporation and/or any of its Subsidiaries in one or
more transactions each of which does not violate Section 11(o) hereof), if (x)
at the time of or immediately after such consolidation, merger, sale or transfer
there are any charter or by-law provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect or other actions
taken, which would materially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates. The Corporation
shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Corporation and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section 11(n).
(o) The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 27
hereof, take (or permit any Subsidiary to take) any action the purpose of which
is to, or if at the time such action is taken it is reasonably foreseeable that
the effect of such action is to, materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the
contrary, in the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Corporation shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case, the
number of Rights associated with each Common Share then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each Common Share following any such event shall equal the result obtained by
multiplying the number of Rights associated with each Common Share immediately
prior to such event by a fraction the numerator of which shall be the total
number of Common Shares outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of Common Shares
outstanding immediately following the occurrence of such event. The adjustments
provided for in this Section 11(p) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected.
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(q) The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent so exercised
and shall not otherwise affect the rights represented by the Rights under this
Rights Agreement, including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 or 13
hereof, the Corporation shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the
Common Shares a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained and shall not be deemed to have knowledge of
such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event that, on or following the Shares
Acquisition Date, directly or indirectly, (x) the Corporation shall consolidate
with, or merge with and into, any Interested Stockholder, or if in such merger
or consolidation all holders of Common Shares are not treated alike, any other
Person, (y) the Corporation shall consolidate with, or merge with, any
Interested Stockholder, or if in such merger or consolidation all holders of
Common Shares are not treated alike, any other Person, and the Corporation shall
be the continuing or surviving corporation of such consolidation or merger
(other than, in a case of any transaction described in (x) or (y), a merger or
consolidation which would result in all of the securities generally entitled to
vote in the election of directors ("voting securities") of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the surviving
entity) all of the voting securities of the Corporation or such surviving entity
outstanding immediately after such merger or consolidation and the holders of
such securities not having changed as a result of such merger or consolidation),
or (z) the Corporation shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Corporation and its Subsidiaries (taken as a
whole) to any Interested Stockholder or Stockholders or if in such transaction
all holders of Common Shares are not treated alike, any other Person (other than
the Corporation or any Subsidiary of the Corporation in one or more transactions
each of which does not violate Section 11(o) hereof), then, and in each such
case (except as provided in Section 13(d) hereof), proper provision shall be
made so that (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current Purchase
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Price, in accordance with the terms of this Agreement and in lieu of Common
Shares, such number of freely tradeable Common Shares of the Principal Party (as
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of Common Shares for
which a Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii)) and dividing that product by (B)
50% of the then current per share market price of the Common Shares of such
Principal Party (determined pursuant to Section 11(d) hereof) on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Corporation pursuant to this Agreement;
(iii) the term "Corporation" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares) 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 Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares of the Corporation are
converted in such merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or consolidation (including,
if applicable, the Corporation if it is the surviving corporation); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any of the foregoing cases, (1) if the Common Shares
of such Person are not at such time and have not been continuously over the
preceding twelve (12) month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary of another Person the
Common Shares of which are and have been so registered, "Principal Party" shall
refer to such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares 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 Shares having the greatest
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aggregate market value; and (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in (1) and (2)
above shall apply to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(c) The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of its authorized Common Shares which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Corporation and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger, sale or transfer mentioned in paragraph (a) of this
Section 13, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. The rights
under this Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11(a)(ii) and shall survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if: (i) such transaction is
consummated with a Person or Persons who
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acquired Common Shares pursuant to a Permitted Offer (or a wholly owned
Subsidiary of any such Person or Persons); (ii) the price per Common Share
offered in such transaction is not less than the price per Common Share paid to
all holders of Common Shares whose shares were purchased pursuant to such
Permitted Offer; and (iii) the form of consideration offered in such transaction
is the same as the form of consideration paid pursuant to such Permitted Offer.
Upon consummation of any such transaction contemplated by this Section 13(d),
all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares. (a) The
Corporation shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Corporation. If on any such date no such market maker is making a market in
the Rights, the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Corporation shall be used.
(b) The Corporation shall not be required to issue fractions
of Common Shares upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of fractional Common Shares, the
Corporation 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 value of one Common Share. For the purposes
of this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to
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Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any fractional
share upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Shares), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Corporation 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 Corporation and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right 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 purpose,
duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate form fully executed;
(c) subject to Section 6 and Section 7(f) hereof, the
Corporation and the Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificate or the associated Common
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Shares certificate made by anyone other than the Corporation or the Rights
Agent) for all purposes whatsoever, and neither the Corporation nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall be required to
be affected by any notice to the contrary; and
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Rights Agent shall have any liability
to any holder of a Right or a beneficial interest in a Right or other Person as
a result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Corporation 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 Common Shares or any
other securities of the Corporation 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 Corporation or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or other distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Corporation
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 other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Corporation 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 acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises. The
indemnity
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provided for herein shall survive the expiration of the Rights and the
termination of this Agreement.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Shares or for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer or all or substantially all of the corporate trust 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 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of 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 or in the name of the successor Rights Agent; and in all such cases
such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right 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.
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Section 20. Duties of Rights Agent. The Rights Agent
undertakes only those duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Corporation 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 Corporation), 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 an Acquiring Person and
the determination of the current market price of any Security) be proved or
established by the Corporation prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Corporation and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own 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 on such Right Certificates) or
be required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Corporation 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 Corporation of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(e) hereof) or any
adjustment required under the provisions of Section 11 or Section 13 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to
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the exercise of Rights evidenced by Right Certificates after receipt of the
certificate described in Section 12 hereof); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Common Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Common Shares will, when issued, be
validly authorized and issued, fully paid and non-assessable.
(f) The Corporation 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
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the
Corporation, and to apply to such officers for advice or instructions in
connection with its duties, and shall not be liable for any action taken or
suffered by it in good faith or lack of action in accordance with instructions
of any such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written instructions from
the Corporation may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Corporation actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instruction in response to such
application specifying the action to be taken or omitted.
(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 Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Corporation or for any other
legal entity.
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(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 Corporation resulting from any
such act, default, neglect or misconduct, provided reasonable care was exercised
in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has not been
completed, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the
Corporation.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Corporation and
to the transfer agent of the Common Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. The Corporation
may remove the Rights Agent or any successor Rights Agent upon sixty (60) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to the transfer agent of the Common Shares by registered or
certified mail, and to 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 Corporation shall appoint a successor to the Rights Agent. If the
Corporation shall fail to make such appointment within a period of sixty (60)
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 Corporation), 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 Corporation or by such a court, shall be
a corporation organized and doing business under the laws of the United States
or of the State of New York (or of any other state of the United States so long
as such corporation is authorized to do business as a banking institution in the
State of New York), in good standing, having an office in the State of New York,
which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or
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examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Corporation shall file
notice thereof in writing with the predecessor Rights Agent and the transfer
agent of the Common Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the 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 Corporation may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors of
the Corporation to reflect any adjustment or change in the Purchase Price and
the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement.
In addition, in connection with the issuance or sale of Common
Shares following the Distribution Date and prior to the earliest of the
Redemption Date, the Final Expiration Date and the consummation of a transaction
contemplated by Section 13(d) hereof, the Corporation (a) shall with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Corporation, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Corporation, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) the Corporation shall not be obligated to issue any such Right
Certificates if, and to the extent that, the Corporation shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Corporation or the Person to whom such Right Certificate
would be issued, and (ii) no Right Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption and Termination. (a)(i) Subject to
Section 23(a)(iii), the Board of Directors of the Corporation may, at its
option, redeem all but not less than all the then outstanding Rights at a
redemption price of $0.01 per Right,
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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"), at any time
prior to the earlier of (x) the time that any Person becomes an Acquiring
Person, or (y) the Final Expiration Date. The Corporation may, at its option,
pay the Redemption Price either in Common Shares (based on the "current per
share market price," as defined in Section 11(d) hereof, of the Common Shares at
the time of redemption) or cash; provided that if the Corporation elects to pay
the Redemption Price in Common Shares, the Corporation shall not be required to
issue any fractional Common Shares and the number of Common Shares issuable to
each holder of Rights shall be rounded down to the next whole share.
(ii) In addition, subject to Section 23(a)(iii), the
Board of Directors of the Corporation may, at its option, at any time following
a Shares Acquisition Date but prior to any Section 13 Event redeem all but not
less than all of the then outstanding Rights at the Redemption Price in
connection with any Section 13 Event in which all holders of Common Shares are
treated alike and not involving (other than as a holder of Common Shares being
treated like all other such holders) an Interested Stockholder.
(iii) The Board of Directors of the Corporation may
only redeem Rights pursuant to Section 23(a)(i) or 23(a)(ii) hereof if (A) a
majority of the Disinterested Directors, and (B) a majority of all of the
directors of the Corporation authorize such redemption. Notwithstanding anything
in this Agreement to the contrary, the Rights may not be redeemed pursuant to
this Section 23 unless there is at least one member of the Board of Directors of
the Corporation that is a Disinterested Director at the time of such redemption.
(b) In the case of a redemption permitted under Section
23(a)(i), immediately upon the date for redemption set forth (or determined in
the manner specified in) in a resolution of the Board of Directors of the
Corporation ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. In the case of a redemption permitted only under Section
23(a)(ii), evidence of which shall have been filed with the Rights Agent, the
right to exercise the Rights will terminate and represent only the right to
receive the Redemption Price upon the later of ten Business Days following the
giving of such notice or the expiration of any period during which the rights
under Section 11(a)(ii) may be exercised. The Corporation shall promptly give
public notice of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption. Within ten (10) days after such date for redemption set forth in a
resolution of the Board of Directors of the Corporation ordering
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the redemption of the Rights, the Corporation shall mail a notice of redemption
to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Corporation 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 this Section 23 and other than in
connection with the purchase of Common Shares prior to the Distribution Date.
(c) The Corporation may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release announcing
the manner of redemption of the Rights in accordance with this Agreement and
(ii) mailing payment of the Redemption Price to the registered holders of the
Rights at their last addresses as they appear on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Shares, and upon such action, all outstanding
Rights and Right Certificates shall be null and void without any further action
by the Corporation.
Section 24. Exchange. (a) Subject to Section 24(d), the Board
of Directors of the Corporation may, at its option, at any time after the time
that any Person becomes an Acquiring Person, exchange after all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) and Section
11(a)(ii) hereof) for Common Shares of the Corporation at an exchange ratio of
one Common Share per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors of the Corporation shall
not be empowered to effect such exchange at any time after any Person (other
than the Corporation, any Subsidiary of the Corporation, any employee benefit
plan of the Corporation or any such Subsidiary, any entity holding Common Shares
for or pursuant to the terms of any such plan or any trustee, administrator or
fiduciary of such a plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors of
the Corporation ordering the exchange of any Rights pursuant to subsection (a)
of this Section 24 and without any further action and without any notice, the
right to exercise such rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal to
the number of such rights held by
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such holder multiplied by the Exchange Ratio. The Corporation shall promptly
give public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Corporation promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) and
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Corporation shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights.
(d) The Board of Directors may only exchange Rights pursuant
to Section 24(a) hereof if (i) a majority of the Disinterested Directors, and
(ii) a majority of all of the directors of the Corporation authorize such
exchange. Notwithstanding anything in this Agreement to the contrary, the Rights
may not be exchanged pursuant to this Section 24 unless there is at least one
member of the Board of Directors of the Corporation that is a Disinterested
Director at the time of such exchange.
Section 25. Notice of Certain Events. (a) In case the
Corporation shall propose (i) to pay any dividend payable in stock of any class
to the holders of its Common Shares or to make any other distribution to the
holders of its Common Shares (other than a regularly quarterly cash dividend),
(ii) to offer to the holders of its Common Shares rights or warrants to
subscribe for or to purchase any additional Common Shares or shares of stock of
any class or any other securities, rights or options, (iii) to effect any
reclassification of its Common Shares (other than a reclassification involving
only the subdivision of outstanding Common Shares), (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Corporation in a transaction which does not violate Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer) in one or more
transactions, of 50% or more of the assets or earning power of the Corporation
and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Corporation and/or any of its Subsidiaries in one or more transactions
each of which does not violate Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the
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Corporation, then, in each such case, the Corporation shall give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action to the extent feasible and file a certificate with the Rights
Agent to that effect, which shall specify the record date for the purposes of
such stock dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by clause
(i) or (ii) above at least twenty (20) days prior to the record date for
determining holders of the Common Shares for purposes of such action, and in the
case of any such other action, at least twenty (20) days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the Common Shares, whichever shall be the earlier.
(b) In case of a Section 11(a)(ii) Event, then (i) the
Corporation shall as soon as practicable thereafter give to each holder of a
Right Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof
and (ii) all references in the preceding paragraph (a) to Common Shares shall be
deemed thereafter to refer also, if appropriate, to capital stock equivalents,
as provided for in Section 11(a)(iii).
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
Certificate to or on the Corporation shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed (until another address is filed
in writing with the Rights Agent) as follows:
Loctite Corporation
00 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Corporation or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Corporation) as follows:
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The First National Bank of Boston
Mail Stop 45-02-16
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Shareholder Services Division
(Loctite Corporation 1994 Rights
Agreement)
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right Certificate or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Corporation.
Section 27. Supplements and Amendments. (a) Prior to the
Distribution Date, subject to Section 27(b) hereof, the Corporation and the
Rights Agent shall, if the Corporation so directs, supplement or amend any
provision of this Agreement without the approval of any holders of certificates
representing Common Shares. From and after the Distribution Date, subject to
Section 27(b) hereof, the Corporation and the Rights Agent shall, if the
Corporation so directs, supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder or (iv) to change or supplement the provisions hereunder
in any manner which the Corporation may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person); provided, however, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Corporation which states that the proposed supplement
or amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment, provided that such supplement
or amendment does not adversely affect the rights or obligations of the Rights
Agent under Section 18 or Section 20 of this Agreement. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares.
(b) The Corporation shall not supplement or amend any
provision of this Agreement unless (i) a majority of the Disinterested Directors
and (ii) a majority of all of
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the directors of the Corporation authorizes such supplement or amendment.
Notwithstanding anything in this Agreement to the contrary, this Agreement may
not be supplemented or amended pursuant to this Section 27 unless there is at
least one member of the Board of Directors of the Corporation that is a
Disinterested Director at the time of such supplement or amendment.
Section 28. Determination and Actions by the Board of
Directors of the Corporation, etc. Subject to Sections 1(c), 1(r), 23(a)(iii),
24(d) and 27(b) hereof, the Board of Directors of the Corporation shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the Corporation, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including, without
limitation, a determination to redeem or not redeem the Rights or to amend the
Agreement and whether any proposed amendment adversely affects the interests of
the holders of Right Certificates). For all purposes of this Agreement, any
calculation of the number of Common Shares or other securities outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares or any other securities of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement. 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 in good faith, shall (x) be final, conclusive and binding on
the Corporation, the Rights Agent, the holders of the Right Certificates and all
other parties, and (y) not subject the Board to any liability to the holders of
the Right Certificates.
Section 29. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Corporation or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than the
Corporation, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Corporation, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).
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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.
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 Delaware 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.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the date and year first
above written.
LOCTITE CORPORATION
By:
------------------------------
Name:
Title:
THE FIRST NATIONAL BANK
OF BOSTON
By:
------------------------------
Name:
Title:
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Exhibit A-1
FORM OF TRANSFEREE AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of [_____], between [Insert
Name of Transferee] (the "Transferee") and Loctite Corporation ("Loctite").
Capitalized terms used herein which are otherwise not defined herein shall have
the respective meanings ascribed to them in the Rights Agreement, dated as of
April 14, 1994, between Loctite and The First National Bank of Boston
(the "Rights Agreement").
WITNESSETH:
WHEREAS, pursuant to the acquisition agreement, dated as of [_______]
(the "Acquisition Agreement"), between [Insert Name of Transferor] (the
"Transferor") and the Transferee, the Transferor has agreed to sell on [_______]
(the "Closing Date") to the Transferee [_______] Common Shares pursuant to the
terms and conditions thereof (the "Proposed Sale Transaction");
WHEREAS, under the Rights Agreement, in order for the Transferee to be
deemed to be a Permitted Transferee, (i) the Transferee may not have been
declared an Adverse Person, (ii) [in the case of a Transfer from the Xxxxxxx
Family Group or a Permitted Transferee to the Transferee, the Transferee may not
beneficially own, after giving effect to the Proposed Sale Transaction
contemplated by the Acquisition Agreement, any Common Shares other than the
Common Shares transferred by the Transferor to the Transferee in the Proposed
Sale Transaction] [in the case of a Transfer from Henkel to the Transferee, the
Transferee may not beneficially own, after giving effect to the Proposed Sale
Transaction contemplated by the Acquisition Agreement, a percentage of the then
outstanding Common Shares in excess of the lesser of (1) the Henkel Percentage
in effect immediately prior to the Proposed Sale Transaction and (2) the sum of
0.3% of the then outstanding Common Shares and the percentage of the then
outstanding Common Shares to be transferred by Henkel to the Transferee in the
Proposed Sale Transaction] (iii) at least 30 days prior to consummation of the
Proposed Sale Transaction, the Transferee is required to execute and deliver to
Loctite this Agreement, which is substantially in the form of Exhibit A-1
attached to the Rights Agreement, and (iv) immediately prior to the consummation
of the Proposed Sale Transaction, the Transferee is required to execute and
deliver to Loctite an executive officer's certificate substantially in the form
of Exhibit A-2 to the Rights Agreement; and
51
WHEREAS, the Transferee desires that, after giving effect to the
Proposed Sale Transaction contemplated by the Acquisition Agreement, the
Transferee will be a Permitted Transferee under the Rights Agreement and in
consideration thereof has entered into this Agreement.
NOW, THEREFORE, in consideration of the promises herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, each of the parties hereto agrees as follows:
1. Prohibited Actions. (a) So long as this Agreement is in
effect, (i) Loctite shall not adopt any shareholder rights plan or similar
device that does not contain substantially the same terms and conditions as
those set forth in the Rights Agreement (a "Substantially Similar Rights Plan")
and (ii) Loctite shall not amend, modify, waive, terminate or invalidate any
provision of the Rights Agreement or any Substantially Similar Rights Plan or
adopt, amend, modify, waive, terminate or invalidate any provision of its
certificate of incorporation or by-laws in any way which would adversely affect
the rights of the Transferee under the Rights Agreement or any Substantially
Similar Rights Plan.
(b) So long as this Agreement is in effect, the Transferee
shall not, and shall cause each of its Affiliates and Associates and any duly
and validly elected directors of Loctite (each a "Director") designated by, or
which is a representative of, the Transferee or any of its Affiliates or
Associates not to, directly or indirectly, seek to (i) amend, modify, waive,
terminate or invalidate, or cause the amendment, modification, waiver,
termination or invalidation of any provision of the Rights Agreement or any
Substantially Similar Rights Plan in any manner (including, without limitation,
by proxy contest, shareholder consent, or otherwise) or (ii) redeem or exchange
the Rights or any rights issued under any Substantially Similar Rights Plan, in
either case, unless a majority of the Directors who are neither nominees or
representatives of the Transferee or any Affiliate or Associate of the
Transferee nor officers or employees of Loctite (each an "Outside Director")
consent to such action in writing or at a duly called meeting of the Board of
Directors of Loctite (the "Board"); it being understood that the consent of the
Outside Directors may only be obtained if there is at least one Director that is
an Outside Director.
(c) Loctite acknowledges that nothing in this Agreement
shall be construed as prohibiting the Transferee, or its Affiliates or
Associates, from making, or in any way participating in, any "solicitation" of
"proxies" (as such terms are defined below), or becoming a "participant" in any
"election contest" (as such terms are defined
A-2
52
below), in each case, for the election or removal of any of the Directors;
provided, however, that any Director designated by the Transferee, or any
Affiliate or Associate of the Transferee, shall be subject to the restrictions
contained in Section 1(b) hereof.
2. Permitted Transfers. (a) In connection with any proposed
Permitted Transfer by the Transferee, the Transferee shall deliver to Loctite no
later than 30 days prior to the Transfer Date (as defined below) (i) written
notice of such proposed Permitted Transfer (the "Transfer Notice") for such
proposed Permitted Transfer setting forth (A) the number of Common Shares
proposed to be transferred, (B) the identity of the proposed transferee (the
"Proposed Transferee"), including the Beneficial Owners thereof to the extent
known or reasonably determinable by the Transferee, and (C) the date on which
the proposed Permitted Transfer is to be consummated (the "Transfer Date") and
(ii) an agreement substantially in the form of Exhibit A-1 to the Rights
Agreement, duly and validly executed on behalf of the Proposed Transferee (the
"Transferee Agreement"). Upon receipt by Loctite of the Transferee Agreement
duly executed and delivered by the Proposed Transferee, Loctite shall duly
execute and deliver the Transferee Agreement.
(b) As soon as practicable after receipt of the Transfer
Notice, the Directors who are neither nominees or representatives of the
Transferor or any Affiliate or Associate of the Transferor nor officers or
employees of Loctite (each an "Unaffiliated Director") shall evaluate whether
the Proposed Transferee is an Adverse Person. The Transferee shall provide the
Unaffiliated Directors with any information within its control requested by them
to facilitate their evaluation, as soon as practicable after any request for
information is made.
(c) Subject to Section 2(d) hereof, a proposed Permitted
Transfer may be consummated on the Transfer Date as set forth in the Transfer
Notice and the Transferee Agreement related to such proposed Permitted Transfer
unless the Unaffiliated Directors shall have determined that the Proposed
Transferee is an Adverse Person no later than five days prior to the Transfer
Date for such proposed Permitted Transfer provided that the Transferee complies
with its obligations in Sections 2(a) and (b) hereof.
(d) With respect to any proposed Permitted Transfer, the
Proposed Transferee shall be deemed to be an Adverse Person for purposes of the
Rights Agreement, unless there is at least one Director that is an Unaffiliated
Director during the period from and including the date Loctite receives a
Transfer Notice in respect of such proposed Permitted Transfer to and including
the Transfer Date for such proposed Permitted Transfer. Except as required by
applicable law, Loctite covenants and agrees that it will not take any action to
cause there to be fewer than one Unaffiliated Director on the Board at any time.
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53
(e) Notwithstanding anything in this Agreement to the
contrary, no transferee of any Common Shares from the Transferee shall have any
rights under this Agreement.
3. Representations and Warranties of Transferee. The
Transferee represents and warrants to Loctite that:
(a) it has the requisite power and authority (corporate or
otherwise) to execute and deliver this Agreement, to carry out its obligations
hereunder and to consummate each of the transactions contemplated hereby;
(b) the execution, delivery and performance of this
Agreement and the consummation of each of the transactions contemplated hereby
have been duly authorized by its Board of Directors (or other relevant corporate
body), and no other corporate proceedings on its part are necessary to authorize
this Agreement or to consummate the transactions so contemplated;
(c) this Agreement has been duly executed and delivered by
it and constitutes a valid and binding obligation of it, enforceable against it
in accordance with its respective terms, except to the extent such
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to the enforcement of creditors' rights
generally and is subject to the general principles of equity;
(d) neither the execution, delivery and performance of this
Agreement nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the provisions hereof will (i) conflict with or
result in any breach or violation of any provisions of its governing
organizational documents, (ii) require on its part any filing with, notification
to, or permit, authorization, consent or approval of, any governmental body or
authority or any other entity (other than filings by the Transferee with the
Securities and Exchange Commission under the Exchange Act) or (iii) constitute
(with or without notice or lapse of time or both) a breach, violation or
default, create a lien or other encumbrance or give rise to any right of
renegotiation or termination, amendment, cancellation, acceleration or
prepayment under (A) any material agreement or instrument to which it is a party
or by which any of its material properties or assets may be bound or subject or
(B) any order, writ, injunction, decree, statute, rule or regulation,
governmental permit or license applicable to it or any of its material
properties or assets;
A-4
54
(e) A true, and complete copy of the Acquisition Agreement,
without amendment or modification, is attached hereto as Exhibit A; and
(f) after giving effect to the Proposed Sale Transaction
pursuant to the Acquisition Agreement, (i) the Transferee, together with all
Affiliates and Associates of the Transferee, will be the Beneficial Owner of
[insert number] Common Shares and (ii) [in the case of a Transfer from the
Xxxxxxx Family Group or a Permitted Transferee to the Transferee, the
Transferee, together with its Affiliates or Associates, will not beneficially
own any Common Shares, other than the Common Shares transferred by the
Transferor to the Transferee in the Proposed Sale Transaction] [in the case of a
Transfer from Henkel to the Transferee, the Transferee, together with its
Affiliates and Associates, will not beneficially own a percentage of the then
outstanding Common Shares in excess of the lesser of (A) the Henkel Percentage
in effect immediately prior to the Proposed Sale Transaction and (B) the sum of
0.3% of the then outstanding Common Shares and the percentage of the then
outstanding Common Shares to be transferred by Henkel to the Transferee in the
Proposed Sale Transaction].
4. Proposed Sale Transaction. The Transferee shall provide the
Unaffiliated Directors with any information requested by them to facilitate
their evaluation of whether the Transferee is an Adverse Person, as soon as
practicable after any request for information is made, and otherwise cooperate
with the Unaffiliated Directors in connection with their evaluation of the
Transferee.
5. Miscellaneous.
5.1. Entire Agreement. This Agreement embodies the entire
agreement and all understandings between the parties hereto and supersedes all
prior agreements and understandings relating to the subject matter hereof.
5.2. Binding Effect; Benefits; Assignment; Survival. This
Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective legal representatives, successors and assigns.
Neither this Agreement nor any of the rights hereunder may be assigned by (i)
Loctite, without the prior written consent of the Transferee, or (ii) the
Transferee, unless there is at least one Unaffiliated Director and a majority of
the Unaffiliated Directors consents to such assignment in writing or at a duly
called meeting of the Board. Any attempted or purported assignment in violation
of the previous sentence shall be void and of no effect. The representations and
warranties set forth herein shall survive without limitation as to time.
A-5
55
5.3. Amendments and Waivers. No modification, amendment,
termination or waiver of any provision of this Agreement, and no consent to any
departure therefrom, shall in any event be effective unless (i) there is at
least one Unaffiliated Director and (ii) the same shall be (a) in writing, (b)
signed by each of the parties hereto and (c) approved by a majority of the
Unaffiliated Directors, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given.
5.4. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware applicable to
agreements made and to be performed wholly within such jurisdiction, without
giving effect to the choice of law provisions thereof. Each of the parties
hereto hereby irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Delaware for any litigation
arising out of, or relating to, this Agreement and the transactions contemplated
hereby (and agrees not to commence any litigation relating thereto except in
such courts). [The Transferee hereby irrevocably appoints CT Corporation Systems
(the "Process Agent"), with an office on the date hereof at 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Xxxxxx Xxxxxx, as its agent to receive, on its
behalf, service of any process, summons, notice or other document -- applicable
if the Transferee is a foreign entity.] The Transferee agrees that service of
any process, summons, notice or document by U.S. registered mail [to its
respective address set forth in Section 6.5 hereof] [to the Process Agent] shall
be effective service of process for any litigation brought against it in any
such court. Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any litigation arising out of
this Agreement or the transactions contemplated hereby in the courts of the
State of Delaware, and hereby further irrevocably and unconditionally waives and
agrees not to plead or claim in any such court that any such litigation brought
in any such court has been brought in an inconvenient forum.
5.5. Notices. All notices, requests, demands, applications,
services of process and other communications which are required to be or may be
given under this Agreement shall be deemed to have been duly given if sent by
telex, telecopy or facsimile transmission or delivered or mailed, certified
first class mail, postage prepaid, return receipt requested, to the parties
hereto at the following addresses:
A-6
56
To Loctite:
Loctite Corporation
00 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
With copies to:
Fried, Frank, Harris, Xxxxxxx
& Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Xx., P.C.
To Transferee:
[ ]
[ ]
[ ]
Attention: [ ]
With copies to:
[ ]
[ ]
[ ]
Attention: [ ];
or to such other address as any party shall furnish to the other by notice given
in accordance with this Section 5.5. All such notices, requests, demands and
other communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; three business days after being
deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged,
if telecopied; and on the next business day, if timely delivered (with charges
prepaid) to a recognized national air courier guaranteeing overnight delivery.
5.6. Further Assurances. Each party hereto shall do and
perform or cause to be done and performed all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as any other
A-7
57
party may reasonably request in order to carry out the intent and accomplish the
purpose of this Agreement and the consummation of the transactions contemplated
hereby.
5.7. Specific Performance. The parties hereto hereby
acknowledge that each party hereto would suffer irreparable injury and would not
have an adequate remedy at law for money damages if the provisions of this
Agreement were not performed in accordance with their terms. Each party hereto
agrees that the other parties hereto shall be entitled to specific enforcement
of the terms of this Agreement in addition to any other remedy to which they are
entitled, at law or in equity. Furthermore, if any action or proceeding shall be
instituted to enforce the provisions hereof, any party against whom such action
or proceeding is brought hereby waives the claim or defense therein that there
is an adequate remedy at law, and agrees not to urge in any such action or
proceeding the claim or defense that such remedy at law exists.
5.8. Termination. This Agreement shall terminate and be of
no further force and effect on April 14, 2004, and upon the termination of this
Agreement there shall be no liability on the part of any party to this Agreement
with respect to any of the provisions hereof, with the sole exception that
nothing contained in this Agreement shall in any way relieve any party hereto
from liability for any breach of the provisions of this Agreement for the period
prior to its termination.
5.9. Rights of Action. (a) Except as set forth in this
Section 5.9, nothing in this Agreement shall be construed to give any person or
corporation (other than Loctite and the Transferee) any legal or equitable
right, remedy or claim under this Agreement. The parties agree that, at any time
that there are no Unaffiliated Directors, the rights of action in respect of
this Agreement shall be vested in the respective holders of Common Shares; and
any holder of Common Shares, without the consent of any other holder of Common
Shares, may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against any party to this
Agreement to enforce, any provision of this Agreement. Without limiting the
foregoing or any remedies available to the holders of Common Shares, it is
specifically acknowledged that the holders of Common Shares 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 party subject to, this
Agreement.
(b) The Transferee hereby agrees that in connection with
any action by Loctite to enforce any provision of this Agreement against the
Transferee, the Transferee will not take any action that would directly or
indirectly prevent Loctite from making the necessary funds and personnel
available to pursue such action.
A-8
58
5.10. Counterparts. This Agreement may be executed in one
or more counterparts, each of which for all purposes shall be deemed an original
and all of which shall constitute the same instrument.
IN WITNESS WHEREOF, each of the Transferee and Loctite
has caused this Agreement to be duly executed on its behalf as of the date first
above written.
[NAME OF TRANSFEREE]
By:
Name:
Title:
LOCTITE CORPORATION
By:
Name:
Title:
A-9
59
Exhibit A-2
FORM OF TRANSFEREE
EXECUTIVE OFFICER'S CERTIFICATE
[Name of Transferee]
[Address of Transferee]
Loctite Corporation
00 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Reference is made to the Transferee Agreement, dated as of [_______],
between [Insert Name of Transferee] and Loctite Corporation (the "Transferee
Agreement"). The undersigned, [_______ ], an executive officer of the
Transferee, does hereby certify in my capacity as such executive officer that
all of the representations and warranties of the Transferee set forth in Section
3 of the Transferee Agreement are true and correct on and as of the date hereof
with the same effect as though made on and as of the date hereof.
IN WITNESS WHEREOF, the undersigned has duly and validly executed this
Certificate this [insert date of closing of transfer].
____________________________
Name:
Title:
60
Exhibit B
Form of Right Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER APRIL 14, 2004, OR EARLIER IF REDEEMED BY THE
CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL
AND VOID.
Right Certificate
Loctite Corporation
This certifies that _____________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of April 14, 1994 (the "Rights Agreement"),
between Loctite Corporation, a Delaware corporation (the "Corporation"), and The
First National Bank of Boston (the "Rights Agent"), to purchase from the
Corporation at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., New York time, on April 14, 2004,
unless the Rights evidenced hereby shall have been previously redeemed by the
Corporation, at the principal office or offices of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one fully
paid non-assessable share of Common Stock, with a par value of $.01 per share
(the "Common Shares"), of the Corporation, at a purchase price of $175.00 per
Common Share (the "Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of Common
Shares which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of April
14, 1994, based on the Common Shares as constituted at such date.
61
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Affiliate or
Associate who becomes a transferee after the Acquiring Person becomes such, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of any such Acquiring Person, Affiliate or Associate 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.
As provided in the Rights Agreement, the Purchase Price and
the number of Common Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
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 Corporation 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. Copies of the Rights Agreement are on file at the principal
executive offices of the Corporation and the principal office or offices of the
Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Common Shares or other securities as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Corporation at a redemption
price of $.01 per Right (subject to adjustment as provided in the Rights
Agreement) payable in Common Shares or cash.
B-2
62
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Common
Shares or of any other securities of the Corporation 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 thereof, as such, any
of the rights of a stockholder of the Corporation 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 other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of _________, ____.
ATTEST: LOCTITE CORPORATION
_____________________________ By __________________________
Name: Name:
Title: Title:
Countersigned:
THE FIRST NATIONAL
BANK OF BOSTON
By __________________________
Authorized Signatory
Name:
Title:
B-3
63
Form of the Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED____________________________________________
hereby sells, assigns and transfers unto________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________ Attorney, to
transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: _______,____
_____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
________________________________________________________________________________
The undersigned hereby certifies that (1) the Rights evidenced
by this Right Certificate are not being sold, assigned or transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement) and (2)
after due inquiry and to the best knowledge of the undersigned, the undersigned
did not acquire the Rights evidenced by this Right Certificate from any Person
who is or was an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement).
_____________________________
Signature
________________________________________________________________________________
B-4
64
Form of the Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise
Rights represented by the Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise _________
Rights represented by this Right Certificate to purchase the Common Shares or
other securities issuable upon the exercise of such Rights and requests that
certificates for such Common Shares or other securities be issued in the name
of:
Please insert social security
or other identifying number ____________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number ___________________________________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated:___________,______
___________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
B-5
65
Form of the Reverse Side of Right Certificate -- continued
________________________________________________________________________________
The undersigned hereby certifies that (1) the Rights evidenced
by this Right Certificate are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement) and (2) after due inquiry and to the
best knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Right Certificate from any Person who is or was an Acquiring
Person or an Affiliate [or Associate] thereof (as such terms are defined in the
Rights Agreement).
______________________________
Signature
________________________________________________________________________________
NOTICE
The signature on the foregoing Forms of Assignment and
Election and certificates must conform to the name as written upon the face of
this Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Corporation and the Rights Agent will deem the Beneficial Owner
(as such term is defined in the Rights Agreement) of the Rights evidenced by
this Right Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement) and such Assignment
or Election to Purchase will not be honored.
B-6
66
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO,
OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
On April 14, 1994, the Board of Directors of Loctite Corporation (the
"Corporation") declared a dividend distribution of one right (a "Right") for
each outstanding share of Common Stock, $.01 par value per share (the "Common
Shares"), of the Corporation. The dividend is payable to the stockholders of
record on April 25, 1994 (the "Record Date") and with respect to Common Shares
issued thereafter until the Distribution Date (as defined below), and, in
certain circumstances, with respect to Common Shares issued after the
Distribution Date. Except as set forth below, each Right, when it becomes
exercisable, entitles the registered holder to purchase from the Corporation one
Common Share at a price of $175.00 per Common Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Corporation and The
First National Bank of Boston, as Rights Agent (the "Rights Agent"), dated as of
April 14, 1994.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates (as
hereinafter defined) will be distributed. The Rights will separate from the
Common Shares upon the earlier to occur of (i) the date of a public announcement
that a person or "group" (other than a Grandfathered Stockholder (as hereinafter
defined) has acquired beneficial ownership of 10% or more of the outstanding
Common Shares (except pursuant to a Permitted Offer, as hereinafter defined); or
(ii) 10 days (or such later date as the Board may determine) following the
commencement of a tender offer or exchange offer the consummation of which would
result in a person or group becoming an Acquiring Person (as hereinafter
defined) (the earlier of such dates being called the "Distribution Date"). A
person or group whose acquisition of Common Shares causes a Distribution Date
pursuant to clause
67
(i) above is an "Acquiring Person." The date that a person or group becomes an
Acquiring Person is the "Shares Acquisition Date."
Notwithstanding the foregoing, an Acquiring Person does not include the
following persons ("Grandfathered Stockholders"): (i) Xxxxxx Corporation, a
Delaware corporation ("Henkel"), (ii) Xx. Xxxxxx X. Xxxxxxx, Xx. Xxxxx X.
Xxxxxxx, Xx. Xxxxxxxxx X. Xxxxxxx, Xx. Xxxxxxxx X. Xxxxxxx, Xx. Xxxxx X.
Xxxxxxx, Xx. Xxxxx X. Xxxxxxx, Xx. Xxxxxx Xxxxxx, Management I, Limited and
Management II, Limited as a "group" (as such term is defined or used under Rule
13d-5(b) promulgated pursuant to Section 13(d) of the Securities Exchange Act of
1934, as amended) (collectively as such group, the "Xxxxxxx Family Group") and
(iii) any Permitted Transferee (as hereinafter defined); provided, however,
that, except under limited circumstances, (a) Henkel will cease to be a
Grandfathered Stockholder at any time after the date of the Rights Agreement
that Henkel beneficially owns a percentage of outstanding Common Shares in
excess of the Henkel Percentage (as hereinafter defined) then in effect (other
than as a result of a Permitted Offer), (b) the Xxxxxxx Family Group will cease
to be a Grandfathered Stockholder at the time after the date of the Rights
Agreement any member of the Xxxxxxx Family Group beneficially owns any
additional Common Shares (other than as a result of a stock dividend, a stock
split, a grant by the Corporation pursuant to a directors benefit plan
established by the Corporation of Common Shares or options to purchase Common
Shares (and the exercise thereof) or a Permitted Offer) and (c) any Permitted
Transferee will cease to be a Grandfathered Stockholder at the time such
Permitted Transferee beneficially owns any additional Common Shares (other than
as a result of a stock dividend, a stock split or a Permitted Offer). Initially,
the "Henkel Percentage" is 35% of the outstanding Common Shares and thereafter
is subject to adjustment as follows: (1) in the event of any transfer of Common
Shares by Henkel to any person (other than by means of a transfer of Common
Shares pursuant to a registered public offering or a broker's transaction under
Rule 144 under the Securities Act of 1933, as amended, and that satisfies
certain other conditions to ensure a wide distribution of those Common Shares
(each such transfer, a "Distribution Transaction")), the Henkel Percentage will
be reduced by the percentage of outstanding Common Shares so transferred; (2) in
the event of transfers aggregating more than 10% of the outstanding Common
Shares by Henkel by means of Distribution Transactions, the Henkel Percentage
will be reduced by the aggregate percentage of outstanding Common Shares so
transferred in excess of 10% of the outstanding Common Shares; and (3) in the
event that the Corporation acquires any Common Shares, the Henkel Percentage
immediately following such acquisition will equal the greater of the Henkel
Percentage immediately prior to such acquisition and the percentage of the
outstanding Common Shares beneficially owned by Henkel immediately following
such acquisition.
C-2
68
A "Permitted Transfer" is any transfer of Common Shares from
Henkel, the Xxxxxxx Family Group as a whole, or any Permitted Transferee to any
person that (i) has not been declared an Adverse Person (as hereinafter defined)
by a majority of those directors of the Corporation who are neither officers or
employees of the Corporation nor a designee or representative of the proposed
transferor (the "Unaffiliated Directors"), (ii) does not beneficially own, after
giving effect to the transfer, in the case of a transfer from the Xxxxxxx Family
Group or any Permitted Transferee, any Common Shares other than the Common
Shares so transferred to such transferee or in the case of a transfer from
Henkel, a percentage of the then outstanding Common Shares in excess of the
lesser of (a) the Henkel Percentage in effect immediately prior to such proposed
transfer and (b) the sum of 0.3% of the then outstanding Common Shares and the
percentage of the then outstanding Common Shares so transferred to such
transferee, (iii) at least 30 days prior to the consummation of such proposed
transfer, executes and delivers to the Corporation an agreement substantially in
the form of Exhibit A-1 attached to the Rights Agreement and (iv) immediately
prior to the consummation of such transfer, executes and delivers to the
Corporation an executive officer's certificate substantially in the form of
Exhibit A-2 attached to the Rights Agreement. The Rights Agreement provides that
any proposed Permitted Transferee will be deemed to be an "Adverse Person" if it
is declared to be an Adverse Person by a majority of the Unaffiliated Directors
after having determined in its business judgment that beneficial ownership by
such proposed Permitted Transferee of 10% or more of the outstanding Common
Shares would be reasonably likely to materially adversely affect the Corporation
or its stockholders.
The Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Common Shares. Until
the Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date (and to each initial record holder of certain Common Shares
issued after the Distribution Date), and these separate Right Certificates alone
will evidence the Rights.
C-3
69
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on April 14, 2004, unless earlier redeemed by
the Corporation as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding Common
Shares and (i) which is at a price and on terms which a majority of the
Disinterested Directors (as hereinafter defined) and a majority of the entire
Board determines to be adequate and in the best interests of the Corporation,
its stockholders and its other relevant constituencies, other than such person
making such offer, or (ii) which remains open for a period of at least 60 days
after the tender or exchange offer has commenced and the consummation of which
results in the person on whose basis the tender or exchange offer is made
becoming the beneficial owner of more than 50% of the outstanding Common Shares
(a "Permitted Offer")), each holder of a Right will thereafter have the right
(the "Flip-In Right") to receive upon exercise the number of Common Shares (or,
in certain circumstances, other securities of the Corporation) having a value
(immediately prior to this triggering event) equal to two times the Purchase
Price of the Right. In lieu of the Flip-In Right described above, the Board, at
its option, may exchange each Right for one Common Share, provided that at no
time has any person been the beneficial owner of 50% or more of the outstanding
Common Shares. Such an exchange must be authorized by (a) a majority of the
Disinterested Directors and (b) a majority of all of the directors of the Board.
A "Disinterested Director" means any director of the Corporation who is neither
an officer or employee of the Corporation nor any designee or representative of
any person attempting to effect a business combination or similar transaction
with the Corporation. Notwithstanding the foregoing, following the occurrence of
a person becoming an Acquiring Person, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person will be null and void.
In the event that at any time following the Shares Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, in either case
with or to (a) an Acquiring Person or any affiliate or associate or any other
person in which such Acquiring Person, affiliate or associate has an interest or
any person acting on behalf of or in concert with such Acquiring Person,
affiliate or associate, or, (b) any other person (but only if in any such
transaction referred to in clause (i) or (ii) above, all holders of Common
Shares are not treated alike), then each holder of a Right (except Rights which
previously have been voided as set forth
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above) will have the right (the "Flip-Over Right") to receive, upon exercise,
common shares of the acquiring Corporation having a value equal to two times the
Purchase Price of the Right. The holder of a Right will continue to have the
Flip-Over Right whether or not such holder exercises or surrenders the Flip-In
Right.
The Purchase Price payable, and the number of Common Shares or other
securities issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Shares, (ii) upon
the grant to holders of the Common Shares of certain rights or warrants to
subscribe for or purchase Common Shares at a price, or securities convertible
into Common Shares with a conversion price, less than the then current market
price of the Common Shares or (iii) upon the distribution to holders of the
Common Shares of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of Common Shares
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or combinations of the
Common Shares occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. Fractional Common Shares will not be required to be issued
by the Corporation, and in lieu thereof, an adjustment in cash will be made
based on the market price of the Common Shares on the last trading day prior to
the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Corporation may
redeem the Rights at a price of $.01 per Right (the "Redemption Price"), which
redemption will be effective upon approval of (a) a majority of the
Disinterested Directors and (b) a majority of all of the directors of the
Corporation. Additionally, following the Shares Acquisition Date, the then
outstanding Rights may be redeemed at the Redemption Price (if approved by (1) a
majority of the Disinterested Directors and (2) a majority of all of the
directors of the Corporation), if this redemption is in connection with a merger
or other business combination transaction or series of transactions involving
the Corporation in which all holders of Common Shares are treated alike but not
involving an Acquiring Person or its affiliates or associates.
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Prior to the Distribution Date, all of the provisions of the Rights
Agreement may be amended by approval of (i) a majority of the Disinterested
Directors and (ii) a majority of all of the directors of the Corporation. After
the Distribution Date, the provisions of the Rights Agreement may be amended
upon approval of (a) a majority of the Disinterested Directors and (b) a
majority of all of the directors of the Corporation in order to cure any
ambiguity, defect or inconsistency, or to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person).
The Rights may not be redeemed, exchanged or amended unless there is at
least one Disinterested Director at the time of such redemption, exchange or
amendment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to stockholders of the Corporation, stockholders may, depending
upon the circumstances, recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events thereafter.
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 dated
April 15, 1994. A copy of the Rights Agreement is available free of charge from
the Corporation. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is hereby incorporated herein by reference.
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