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Exhibit 4.3
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THE GEON COMPANY
and
THE BANK OF NEW YORK,
Rights Agent
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Rights Agreement
Dated as of May 28, 1993
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TABLE OF CONTENTS
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Page
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Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 5
Section 3. Issue of Rights Certificates 6
Section 4. Form of Rights Certificates 8
Section 5. Countersignature and Registration 9
Section 6. Transfer, Split Up, Combination and
Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights
Certificates 10
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 11
Section 8. Cancellation and Destruction of Rights
Certificates 14
Section 9. Reservation and Availability of Capital
Stock 14
Section 10. Capital Stock Record Date 16
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights 17
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares 28
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power 29
Section 14. Fractional Rights and Fractional Shares 32
Section 15. Rights of Action 34
Section 16. Agreement of Rights Holders 34
Section 17. Rights Certificate Holder Not Deemed a
Stockholder 35
(i)
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Section 18. Concerning the Rights Agent 36
Section 19. Merger or Consolidation or Change of Name
of Rights Agent 36
Section 20. Duties of Rights Agent 37
Section 21. Change of Rights Agent 40
Section 22. Issuance of New Rights Certificates 41
Section 23. Redemption and Termination 41
Section 24. Notice of Certain Events 43
Section 25. Notices 44
Section 26. Supplements and Amendments 44
Section 27. Successors 46
Section 28. Determinations and Actions by the Board of
Directors, etc 46
Section 29. Benefits of this Agreement 46
Section 30. Severability 47
Section 31. Governing Law 47
Section 32. Counterparts 47
Section 33. Descriptive Headings 47
Exhibit A - Form of Certificate of Designations of Series A
Junior Participating Preferred Shares
Exhibit B - Form of Rights Certificate
Exhibit C - Form of Summary of Rights
(ii)
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RIGHTS AGREEMENT
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RIGHTS AGREEMENT, dated as of May 28, 1993 (the "Agreement"), between
The Geon Company, a Delaware corporation (the "Company"), and The Bank of New
York, a New York banking corporation (the "Rights Agent") .
W I T N E S S E T H :
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WHEREAS, on March 31, 1993 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of common stock, par value $.10 per
share, of the Company (the "Common Shares") outstanding at the close of
business on May 28, 1993 (the "Record Date"), and has authorized the
issuance of one Right (as such number may be hereinafter adjusted pursuant to
the provisions of Section 11(p) hereof) for each Common Share issued or
delivered (whether originally issued or delivered from treasury) between the
Record Date and the Distribution Date (as such term is hereinafter defined)
and as otherwise provided herein, each Right initially representing the right
to purchase one five-hundredth of a Preferred Share (as herein-after defined)
having the rights, powers and preferences set forth in the form of Certificate
of Designations, Preferences and Rights attached hereto as Exhibit A, upon the
terms and subject to the conditions hereinafter set forth (individually a
"Right" and collectively the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term
is hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter
defined) of 15% or more of the Common Shares then outstanding, but shall not
include (1) the Company, (2) any
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Subsidiary of the Company, (3) any Exempt Person, (4) any employee benefit
plan or employee stock plan of the Company or of any Subsidiary of the Company,
or any Person, trust or other entity organized, appointed or established or
holding Common Shares for or pursuant to the terms of any such plan, (5) any
Person or group whose ownership of 15% or more of the Common Shares then
outstanding results solely from a reduction in the number of issued and
outstanding Common Shares pursuant to a transaction or transactions approved by
the Board of Directors (provided that any Person or group that does not become
an Acquiring Person by reason of the application of the immediately preceding
clause shall become an Acquiring Person upon acquisition of any additional
Common Shares of the Company unless such acquisition of additional Common
Shares would not result in such Person or group becoming an Acquiring Person by
reason of such immediately preceding clause.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to beneficially own, any securities :
(i) which such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right or obligation to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (B) at any
time prior to the occurrence of a Triggering Event, securities issuable
upon exercise of the Rights, or (C) from and after the occurrence of a
Triggering Event, securities issuable upon exercise of Rights which were
acquired by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or Section 22
hereof (the "Original Rights") or pursuant to Section
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11(i) hereof in connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act and any successor
provision thereof), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (B) is not also then reportable
by such person 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 (whether or not in writing), but excluding
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities until the
expiration of forty days after the date of such acquisition, for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to subparagraph (ii) of this paragraph
(c)) or disposing of any voting securities of the Company.
(d) "BFG" shall mean The X.X.Xxxxxxxx Company, a New York corporation.
(e) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of Ohio are authorized or
obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M., Eastern
time, on such date; provided, however, that if such date is not a Business
Day it shall mean
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5:00 P.M., New York time, on the next succeeding Business Day.
(g) "Common Shares" shall mean the common stock, par value $.10 per
share, of the Company, except that "Common Shares" when used with reference to
any Person other than the Company shall mean the capital shares of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.
(h) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board, who is
not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate, and was a member of the Board prior to the date of this Agreement,
or (ii) any Person who subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by
a majority of the Continuing Directors.
(i) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(j) "Exempt Person" shall mean BFG and its Affiliates and any
Person to whom BFG transfers beneficial ownership of 10% or more of the
Common Shares then outstanding and any of such transferee's Affiliates.
Notwithstanding the foregoing, an Exempt Person (and such Exempt Person's
Affiliates) shall permanently lose its status as an Exempt Person at such time
as such Exempt Person and such Exempt Person's Affiliates beneficially own less
than 10% of the outstanding Common Shares.
(k) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(l) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(m) "Person" shall mean any individual, firm, corporation, partnership
or other entity.
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(n) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.10 per share, of the Company having
the rights and preferences set forth in the form of Certificate of
Designations, Preferences and Rights attached to this Agreement as Exhibit A.
(o) "Preferred Share Fraction" shall mean one five-hundredth of a
Preferred Share.
(p) "Record Date" shall have the meaning set forth in the first WHEREAS
clause.
(q) "Section 11(a) (ii) Event" shall mean the event described in
Section 11(a) (ii) hereof.
(r) "Section 13 Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a) hereof.
(s) "Stock 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 Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person, that an Acquiring Person has become such.
(t) "Subsidiary" shall mean, with reference to any other Person, any
corporation or other entity of which securities or other ownership interest
having ordinary voting power, in the absence of contingencies, to elect at
least a majority of the directors or other persons performing similar functions
is beneficially owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
(u) "Triggering Event" shall mean any Section 11(a) (ii) Event or any
Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable upon five days prior written notice to the Rights Agent.
The Rights Agent shall have no duties to supervise, and shall in no event be
liable for, the acts or omissions of, any such Co-Rights Agent.
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Section 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the close of
business on the earlier of (i) the tenth day after the Stock Acquisition Date
(or, if the tenth day after the Stock Acquisition Date occurs before the Record
Date, the close of business on the Record Date) or (ii) the tenth business day
(or such later date as may be determined by the Company's Board of Directors)
after the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any Exempt Person, any employee benefit
plan or employee stock plan of the Company or of any Subsidiary of the Company,
or any Person, trust or other entity organized, appointed or established or
holding Common Shares for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2 (a) of the General
Rules and Regulations under the Exchange Act, if upon consummation thereof,
such Person would be the Beneficial Owner of 15% or more of the Common Shares
then outstanding (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Shares registered in the names of the holders of the Common Shares
(which certificates for Common Shares shall be deemed also to be certificates
for Rights) and not by separate certificates, and (y) the Rights will
be transferable only in connection with the transfer of the underlying Common
Shares (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send, at the Company's expense, by
first-class, postage prepaid mail, to each record holder of the Common Shares
as of the close of business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more Rights Certificates, in
substantially the form of Exhibit B hereto (individually a "Rights
Certificate" and collectively the "Rights Certificates"), evidencing
one Right for each Common Share so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per Common
Share has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As
of and after the Distribution Date, the Rights will be evidenced solely by
Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of
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Rights, in substantially the form attached hereto as Exhibit C (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 Company. With respect to certificates for
the Common Shares outstanding on or after the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for the
Common Shares with or without a copy of the Summary of Rights attached thereto
and the registered holders of the Common Shares shall also be the registered
holders of the associated Rights. Until the earlier of the Distribution Date
or the Expiration Date, the transfer of any certificates representing Common
Shares with or without a copy of the Summary of Rights attached thereto in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such Common Shares.
(c) Rights shall be issued in respect of all Common Shares which are
issued after the Record Date but prior to the earlier of the Distribution Date
or the Expiration Date. Certificates issued after the Record Date, but prior
to the earlier of the Distribution Date or the Expiration Date, shall also be
deemed to be certificates for Rights. Certificates issued after May 6, 1993,
but prior to the earlier of the close of business on the Distribution Date or
the Expiration Date 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 the Company
and the financial institution named therein as Rights Agent (the "Rights
Agreement"), the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive offices of the
Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may expire, may be amended or may
be evidenced by separate certificates and no longer be evidenced by this
Certificate. Under certain circumstances, Rights beneficially owned by an
Acquiring Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement) and any subsequent holder of such Rights
may become null and void. The Company will mail to the holder of this
Certificate a copy of the Rights Agreement without charge within five
business days after receipt of a written request therefor.
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With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Shares represented by such certificates shall be evidenced by
such certificates alone and registered holders of Common Shares shall also be
the registered holders of the associated Rights, and the transfer of any of
such Certificates shall also constitute the transfer of the Rights associated
with the Common Shares represented by such Certificates.
Section 4. FORM OF RIGHTS CERTIFICATES. (a) The Rights Certificates
(and the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Record Date
and on their face shall entitle the holders thereof to purchase such number of
Preferred Share Fractions as shall be set forth therein at the price set forth
therein (such exercise price per Preferred Share Fraction, the "Purchase
Price"), but the number of such Preferred Share Fractions purchased upon the
exercise of each Right and the Purchase Price thereof shall be subject to ad-
justment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights that are beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any. such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement, or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is
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part of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.
The Company shall instruct the Rights Agent in writing of the Rights which
should be so legended and shall supply the Rights Agent with such legended
Rights Certificates.
The provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Rights Certificates.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned manually by an authorized signatory of the
Rights Agent (which need not be the same authorized signatory for all of the
Rights Certificates), and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by an authorized signatory of the Rights Agent and issuance
and delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights
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Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or office in New York, New York
designated in Section 25 hereof, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the certificate
number of each of the Rights Certificates, the number of Rights evidenced on
its face by each of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED. DESTROYED. LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the close of business on the Distribution Date,
and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined
or exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase (or receive) a like number of Preferred Share
Fractions (or, following a Triggering Event, Common Shares, other securities,
cash or other assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder or holders in the case of a
transfer to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment set forth on the reverse
side of each such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof, along with a signature guarantee and such
other and further documentation as the Rights Agent and the Company may
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 Rights Certificate or Rights Certificates, as
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the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate, if mutilated, along with a signature guarantee and such other and
further documentation as the Rights Agent and the Company may reasonably
request, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to subsection (e) of this Section, the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a) (iii)
and Section 23(b) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to purchase set forth on the reverse side thereof and the certificate
contained therein duly executed, to the Rights Agent at the office or offices
of the Rights Agent designated for such purpose, along with a signature
guarantee and such other and further documentation as the Rights Agent and the
Company may reasonably request, together with payment of the Purchase Price
(except as provided in Section 11(q) hereof) with respect to each surrendered
Right for the total number of Preferred Share Fractions (or Common Shares or
other securities or property, as the case may be) as to which such surrendered
Rights are exercisable, at or prior to the earlier of (i) the close of
business on May 27, 2003 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the earlier of
(i) or (ii) being herein referred to as the "Expiration Date") .
(b) The Purchase Price for each Preferred Share Fraction pursuant to
the exercise of a Right shall initially
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be $100, and shall be subject to adjustment from time to time as provided in
Section 11 and Section 13(a) hereof and shall be payable in accordance with
subsection (c) of this Section.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase set forth on the reverse side
thereof and the certificate contained therein duly executed, accompanied by
payment (except as provided in Section 11(q) hereof), with respect to each
Right so exercised, of the Purchase Price per Preferred Share Fraction (or
Common Shares or other securities or property, as the case may be) to be
purchased as set forth below and an amount equal to any applicable transfer
tax, the Rights Agent shall, subject to Section 20(k) and Section 14(b),
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent for the
Preferred Shares) certificates for the total number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests subject to applicable law, or (B) if the
Company shall have elected to deposit the total number of Preferred Shares
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of Preferred Share Fractions as are to be purchased (in which case
certificates for Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company will
direct the depositary agent to comply with such request, (ii) requisition from
the Company the amount of cash, if any, to be paid in lieu of fractional
Preferred Share Fractions 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 Rights
Certificate, registered in such name or names as may be designated by such
holder and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank check or money
order payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Shares) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
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(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a) (ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or 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 Company shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form of election
to purchase set forth on the reverse side of the Rights Certificate surrendered
for such exercise and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or
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Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall cancel and retire, any other Rights Certificate purchased or
acquired by the Company, otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the Company, or
shall, at the written request of the Company, (i) destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company or (ii) deliver such cancelled Rights Certificates to
the Company for destruction.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares (and following
the occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities or out of its. authorized and issued shares held
in treasury) the number of Preferred Shares (and following the occurrence of a
Triggering Event, Common Shares and/or other securities) that, as provided in
this Agreement including Section 11(a) (iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares (and following the occurrence of a
Triggering Event, Common Shares and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (and the Company reasonably
anticipates that a Right may be exercised), all shares (or other securities)
reserved for such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date
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after the first occurrence of a Section 11(a) (ii) event on which the
consideration to be delivered by the Company upon exercise of the Rights has
been determined pursuant to this Agreement (including in accordance with
Section 11(a) (iii) hereof), or as soon as is required by law or regulation
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
Common Shares or other 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) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or blue sky
laws of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed ninety
(90) days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement (a copy of which
shall be promptly delivered to the Rights Agent) stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained or the exercise thereof would be
in violation of applicable law. Unless the Rights Agent has received notice of
a suspension, the Rights Agent may assume that any Right exercised is permitted
to be exercised under applicable law and shall have no liability for acting in
reliance upon such assumption.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares (and following the
occurrence of a Triggering Event, Common Shares and/or other securities)
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price except as otherwise provided in Section 11(q)
hereof), be duly and validly authorized and issued and fully paid and
nonassessable.
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(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates
and of any certificates for a number of Preferred Share Fractions (or Common
Shares or other securities, as the case may be) upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Rights Certificates to a
person other than, or the issuance or delivery of a number of Preferred Share
Fractions (or Common Shares or other securities, as the case may be) in respect
of a name other than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for a number of Preferred Share Fractions (or Common Shares and/or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such Rights Certificates
at the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. CAPITAL STOCK RECORD DATE. Each person in whose name
any certificate for a number of Preferred Share Fractions (or 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 such
Preferred Share Fractions (or Common Shares and/or other securities, as
the case may be) represented thereby on, and such certificate shall be dated,
the date upon which the Rights Certificate evidencing such rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; PROVIDED, however, that if the date of such surrender and
payment is a date upon which the Preferred Share (or Common Share and/or other
security, as the case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Share (or Common Share and/or
other security, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares (fractional or otherwise) for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any
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preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in shares
of Preferred Shares or other capital stock, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares
into a smaller number of shares, or (D) issue any share of its capital stock
in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) , except as otherwise
provided in Section 11(a) (ii) 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 Preferred Shares or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Shares or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Shares (or other capital stock, as the case may be) transfer books of the
Company were open, he would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a) (i) and Section 11(a) (ii) hereof, the adjustment
provided for in this Section 11(a) (i) shall be in addition to, and shall be
made prior to any adjustment required pursuant to Section 11(a) (ii) hereof.
(ii) In the event any Person shall become an Acquiring Person, unless
the event causing such Person to become an Acquiring Person is a Section 13
Event, or is an acquisition of Common Shares pursuant to a tender offer or
exchange offer for all outstanding shares of Common Shares at a price and on
terms determined by at least a majority of the members of the Board of
Directors who are not officers of the
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Company and who are not representatives, nominees, Affiliates or Associates of
an Acquiring Person, after receiving advice from one or more investment banking
firms, to be (a) at a price which is fair to stockholders (taking into account
all factors which such members of the Board deem relevant including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its stockholders, then,
promptly following five (5) days after the date of the occurrence of the event
described in Section 11(a) (ii) hereof, proper provision shall be made so that
each holder of a Right (except as provided in Section 11(a) (iii), and in
Section 7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of a number of Preferred Share Fractions, such
number of Common Shares of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of
Preferred Share Fractions for which a Right was exercisable by such holder
immediately prior to the first occurrence of a Section 11(a) (ii) Event, and
(y) dividing that product (such product, following such first occurrence, shall
thereafter be referred to as the Purchase Price for each Right and for all
purposes of this Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) hereof) per Common Share on the date of such first
occurrence (such number of Common Shares is herein called the "Adjustment
Shares") .
(iii) In the event that the number of Common Shares which are
authorized but not outstanding or reserved for issuance for purposes other than
upon exercise of the Rights is not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value")
over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect
to each Right, make adequate provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Common Shares or other equity securities of the Company
(including, without limitation, preferred shares, or units of preferred shares,
which the Board of Directors of the Company has deemed to be substantially
economically equivalent to the Common Shares (such preferred shares, "common
stock equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the
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foregoing, having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the majority of the Continuing Directors
in the office at the time after considering the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30)
days following the first occurrence of (x) a Section 11(a) (ii) Event or (y)
the date on which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the "Section
11(a) (ii) Trigger Dates"), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and then, if necessary,
cash, which cash and/or shares have an aggregate value equal to the Spread. If
the Continuing Directors of the Company shall determine in good faith that it
is likely that sufficient additional Common Shares could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be extended by resolution of the Board of Directors of the
Company to the extent necessary, but not more than ninety (90) days following
the first occurrence of a Section 11(a) (ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such period, as it may be extended, the "Substitution Period") . To
the extent that the Company determines that some action need be taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the Company
(x) shall provide subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights have been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(e) (iii),
the value of the Common Shares shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of Common Shares on the Section
11(a) (ii) Trigger Date and the value of any common stock equivalents shall be
deemed to have the same value as the Common Shares on such date.
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(iv) If the rules of the national securities exchange, registered as
such pursuant to Section 6 of the Exchange Act, or of the national securities
association, registered as such pursuant to Section 15A of the Exchange Act, on
which the Common Shares are principally traded would prohibit such exchange
or association from listing or continuing to list, or from authorizing for
or continuing quotation and/or transaction reporting through an
inter-dealer quotation system, the Common Shares or other equity securities of
the Company if the Rights were to be exercised for Common Shares in accordance
with subparagraph (ii) of this Section 11(a) because such issuance would
nullify, restrict or disparately reduce the per share voting rights of holders
of Common Shares or for any other reason, the Company shall: (A) determine the
Spread, and (B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) equity securities of the Company, including, without
limitation, "common stock equivalents," other than securities which would
have the effect of nullifying, restricting or disparately reducing the per
share voting rights of holders of Common Shares or otherwise cause the
prohibition described above, (3) debt securities of the Company, (4) other
assets, or (5) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined by
the Continuing Directors of the Company after considering the advice of a
nationally recognized investment banking firm selected by the Board of
Directors of the Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within thirty
(30) days following the Section 11(a) (ii) Trigger Date, then the Company shall
be obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, cash having an aggregate value equal
to the Spread. To the extent that the Company determines that an action needs
to be taken pursuant to the first sentence of this Section 11(a) (iv), the
Company (x) shall provide, subject to Section 7(e), that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights, but not longer than ninety (90) days after the
Section 11 (a) (ii) Trigger Date, in order to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement (a copy of which shall be delivered promptly to the Rights
Agent) stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at
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such time as the suspension is no longer in effect. For purposes of this
Section 11(a) (iv), the value of the Common Shares shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share of Common
Shares on the Section 11(a) (ii) Trigger Date and the value of any "common
stock equivalent" shall be deemed to have the same value as the Common Shares
on such date.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Shares entitling them to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record date) Preferred
Shares, (or shares having the same rights, privileges and preferences
as the Preferred Shares ("equivalent preferred stock")) or securities
convertible into Preferred Shares or equivalent preferred stock at a price per
Preferred Share or equivalent preferred stock (or having a conversion price
per share, if a security convertible into Preferred Shares or equivalent
preferred stock) less than the current market price (as determined pursuant to
Section 11(d) hereof) per Preferred Share 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 Preferred Shares
outstanding on such record date, plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date, plus the number of
additional Preferred Shares and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities to be
offered are initially convertible). In case such subscription price may be
paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Preferred Shares owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights or
warrants are not so issued, the Purchase Price
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shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the con-
tinuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend paid out of the earnings or retained earnings of the
Company) , assets (other than a dividend payable in Preferred Shares, but
including any dividend payable in shares other than Preferred 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 current
market price (as determined pursuant to Section 11(d) hereof) per Preferred
Share on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness to be distributed or of such
subscription rights or warrants applicable to a share of Preferred Shares and
the denominator of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) per share of preferred stock. Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not made, the Purchase Price shall
be adjusted to be the Purchase Price which would have been in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a) (iii) hereof, the "current market
price" per Common Share on any date shall be deemed to be the average of the
daily closing prices per share of Common Shares for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a) (iii)
hereof, the current market prices per Common Share on any date shall be deemed
to be the average of the daily closing prices per Common Share for the ten (10)
consecutive Trading Days immediately following such date; provided, however,
that in the event that the then current market price per Common Share is
determined during a period following the announcement by the issuer of such
Common Shares of (i) any dividend or distribution on such Common Shares payable
in such Common
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Shares or securities convertible into shares of Common Shares (other than the
Rights), (ii) any subdivision, combination or reclassification of such Common
Shares, and prior to the expiration of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as set forth above, after the ex-dividend date
for such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, in each such case, the current market
prices shall be properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common Shares 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
Common Shares are listed or admitted to trading or, if the Common Shares are
not listed or admitted to trading on any national securities exchange, the last
quoted sale price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or such other system then in use, or, if on any such date the Common Shares are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Common Shares selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good faith by the Board of
Directors of the Company shall be used and shall be conclusive for all
purposes. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Shares are not publicly held or not so listed or
traded, "current market prices per share" shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
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(ii) For the purpose of any computation hereunder, the "current market
price" per Preferred Share shall be determined in the same manner as set forth
above for the Common Shares in Section 11(d) (i) (other than the last sentence
thereof). If the current market price per Preferred Share cannot be
determined in the manner provided above or if the Preferred Shares are not
publicly held or listed or traded in a manner described in Section 11(d) (i),
the "current market price" per Preferred Share shall be conclusively deemed
to be an amount equal to 500 (as such number may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalizations with respect
to the Common Shares occurring after the date of this Agreement) multiplied by
the current market price per Common Share. If neither the Common Shares nor
the Preferred Shares are publicly held or so listed or traded, "current market
price" per Preferred Share shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. For all purposes of this Agreement, the "current market
price" of a Preferred Share Fraction shalt be equal to the "current market
price" of one Preferred Share divided by 500.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest one ten-thousandth of a Common Share
or other share or one five-millionth of a Preferred Share, 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 Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any capital shares other than Preferred Shares, thereafter
the number of such other shares receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in Sections 11(a),
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(x), (x), (x), (x), (x), (x), (x), (x) and (m) hereof, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Preferred Share
Fractions (or other consideration, as the case may be) purchasable from time
to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Preferred Share
Fractions (calculated to the nearest one five-millionth) obtained by (i)
multiplying (x) the number of Preferred Share Fractions covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Preferred Share Fractions purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of Preferred Share
Fractions 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
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public
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announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Share Fractions issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Preferred Share Fraction and the number of
Preferred Share Fractions which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated value, if any, of the number of
Preferred Share Fractions issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable such number of Preferred Share Fractions at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, the issuance to the holder of any Right exercised after such record date
of the number of Preferred Share Fractions and other capital shares or
securities of the Company, if any, issuable upon such exercise over and above
the number of Preferred Share Fractions and other capital shares and securities
of the Company, if any, issuable upon
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such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares of Common Shares and other capital shares or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance for each of any Preferred
Share at less than the current market price, (iii) issuance wholly for cash of
Preferred Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to in this Section 11, hereafter made by
the Company to holder of its Preferred Shares shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than
a Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the shareholders 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.
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(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will diminish substantially or
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date of this Agreement and
prior to the Distribution Date (i) declare a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares,
or (iii) combine the outstanding Common Shares into a smaller number of shares,
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 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.
(q) In the event that the Rights become exercisable following
a Section 11(a) (ii) Event, the Company, by action of a majority of the
Continuing Directors in office at the time, may permit the Rights, subject to
Section 7(e), to be exercised for 50% of the Common Shares (or cash or other
securities or assets to be substituted for the Adjustment Shares
pursuant to Section 11 (a) (iii)) that would otherwise be purchasable under
subsection (a), in consideration of the surrender to the Company of the
Rights so exercised and without other payment of the Purchase Price. Rights
exercised under this subsection (q) shall be deemed to have been exercised in
full and shall be cancelled.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred
Shares and the Common Shares, a copy of such certificate, and (c) mail a brief
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summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Common Shares) in accordance with Section 25 hereof. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company or an
Exempt Person) in a transaction which complies with Section 11(o) hereof), and
the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
Company or an Exempt Person) in a transaction which complies with Section 11(o)
hereof) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding Common Shares shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsidiary of the Company or
an Exempt Person) in one or more transactions each of which complies with
Section 11(o) hereof), then, and in each such case and except as set forth 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 the then current Purchase
Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable
Common Shares of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of Preferred Share Fractions for which a
Right is exercisable by such holder immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a) (ii) Event has occurred prior to
the Section 13 Event, multiplying the Purchase Price in effect immediately
prior to
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the first occurrence of such event set forth in Section 11(a) (ii) hereof by
the number of such Preferred Share Fractions for which a Right was exercisable
immediately prior to such first occurrence) and dividing that product (such
product, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the current market price (determined pursuant to
Section 11(d) (i) hereof with respect to the Common Shares) per Common Share of
such Principal Party on the date of consummation of the Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of
a sufficient number of 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 its Common Shares thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company 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; 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 such case, (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
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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 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
ventures and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
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 Company 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 or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party at its own expense will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date;
(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 and each of
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its Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section
13 Event shall occur at any time after the occurrence of a Section 11(a) (ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section
13 (other than this subsection (d)) 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 acquired Common Shares
pursuant to a tender offer or exchange offer for all outstanding Common Shares
that complies with the provisions of Section 11(a)(ii) hereof (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 tender offer or exchange offer, and (iii) the form of consideration
being offered to the remaining holders of Common Shares pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange 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
Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, 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
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with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading, or
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one five-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one five-hundredth of a Preferred Share). In
lieu of fractional Preferred Shares that are not integral multiples of one
five-hundredth of a Preferred Share, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one five-hundredth of a Preferred Share. For purposes of this Section
14 (b), the current market value of one five-hundredth of a Preferred Share
shall be one five-hundredth of the closing price of a Preferred Share (as
determined pursuant to Section 11(d) (ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of Common Shares upon exercise of the Rights
or to distribute certificates which evidence fractional Common Shares. In
lieu of fractional Common Shares, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of one
Common Share. For purposes of this Section 14(c), the
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current market value of one Common Share shall be the closing price of a Common
Share (as determined pursuant to Section 11(d) (i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional Preferred
Shares or Common Shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
Common Shares); and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of Common Shares), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of 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 Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and injunctive relief against
actual or threatened violations of the obligations hereunder of any Person
subject to this Agreement. Holders of Rights shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred by them
in any action to enforce the provisions of this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the
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Rights Agent designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer, along with a signature guarantee and such other
and further documentation as the Rights Agent and the Company may reasonably
request, and with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Share certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Share certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall, subject to the
last sentence of Section 7(e) hereof, be required to be affected by any notice
to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of
its obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of Preferred
Shares Fractions or any other securities of the Company which may at any time
be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as
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provided in Section 24 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to
pay to the Rights Agent such compensation as shall be agreed to in writing
between the Company and the Rights Agent for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reas-
onable expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without 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,
without limitation, the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed and
executed by the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation re-
sulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; PROVIDED, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Rights Certificates
shall have
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been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement, and no implied
duties or obligations shall be read into the Agreement against the Rights
Agent, upon the following terms and conditions, by all of which the Company and
the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market prices") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a certificate
signed by the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer,
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the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its countersigna-
ture on such Rights Certificates), but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution and delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
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 the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares or Preferred Shares to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any Common Shares or Preferred Shares will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
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(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer or for
any delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise of
transfer without first consulting with the Company.
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Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company, and
to each transfer agent of the Common Shares and Preferred Shares by registered
or certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares and Preferred Shares by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by any registered holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then [the
Company shall become the Rights Agent until a successor Rights Agent has been
appointed, and] any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a corporation 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 in the
State of New York), in good standing, having a principal 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 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 or (b) an Affiliate
of any such corporation described in clause (a) above. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of
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the Common Shares and Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, subject to Section 4(b) hereof, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with 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 Expiration Date, the
Company (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 hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Rights Certificate would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. REDEMPTION AND TERMINATION. (a) The Board of Directors
of the Company may, at its option, at any time prior to the earlier of (i) the
time that an Acquiring Person becomes an Acquiring Person (or, if the Acquiring
Person shall have become such prior to the Record Date, the close of business
on the Record Date), or (ii) the Final Expiration Date, redeem all but not less
than all the then outstanding Rights at a redemption price of $.01 per Right,
as such amount shall 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");
and the
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Company may, at its option, pay the Redemption Price either in Common Shares
(based on the "current market price," as defined in Section 11(d) (i), of the
Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors; provided, however,
that there must be Continuing Directors then in office at the time of such
authorization and such authorization shall require the concurrence of a
majority of such Continuing Directors in order for the Board of Directors of
the Company to authorize redemption of the Rights in the following
circumstances: (A) such authorization occurs on or after the time a Person
becomes an Acquiring Person, or (B) such authorization occurs on or after the
date of a change (resulting from a proxy or consent solicitation) in a
majority of the directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated (or, if upon
the commencement of such solicitation, a majority of the Board of Directors of
the Company has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider taking, any action
which would result in such Person becoming an Acquiring Person or which would
cause the occurrence of a Triggering Event unless, concurrent with such
solicitation, such Person (or one or more of its Affiliates or Associates) is
making a cash tender offer pursuant to a Schedule 14D1 (or any successor
form) filed with the Securities and Exchange Commission for all outstanding
Common Shares not beneficially owned by such Person (or by its Affiliates or
Associates).
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have
been 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. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights
by mailing such notice to all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the Common
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.
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Section 24. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in shares of any class to the holders of Preferred Shares or to make
any other distribution to the holders of Preferred Shares (other than a regular
quarterly cash dividend paid out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), or (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof and other than an Exempt Person), or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), in one transaction or series of related
transactions, of more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof and other than an Exempt Person), or
(v) to effect the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of a Rights
Certificate and to the Rights Agent, to the extent feasible, and in accordance
with Section 25 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such share dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of Preferred 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 Preferred 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 Preferred Shares, whichever
shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate and to the Rights Agent,
to
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the extent feasible, in accordance with Section 25 hereof, a notice of the
occurrence of such event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof and (ii) all references in the preceding
paragraph to Preferred Shares shall be deemed thereafter to refer to Common
Shares and/or, if appropriate, other securities.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
The Geon Company
0000 Xxx Xxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxx 00000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights 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 Company) as follows:
The Bank of New York
Stock Transfer Administrator
000 Xxxxxxx - 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx XxXxxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or if
prior to the Distribution Date, to the holder of certificates representing
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 Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the next to last sentence of this Section 26, the Company
and the Rights Agent
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shall, if the Company 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 and subject to the next to
last sentence of this Section 26, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order (i) to cure any ambiguity, (ii)
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to change or supplement
the provisions hereunder in any manner which the Company may deem necessary
or desirable and which shall not adversely affect the interests of the holders
of Rights Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), or (iv) to shorten or lengthen any time
period hereunder (which lengthening or shortening, following the first
occurrence of an event set forth in the first proviso to Section 23 (a) hereof,
shall be effective only if there are Continuing Directors and shall require the
concurrence of a majority of such Continuing Directors); provided, this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iv) of this sentence, (A) a time period relative 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
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute such
supplement or amendment. Notwithstanding anything contained in this Agreement
to the contrary, no supplement or amendment shall be made (i) which changes the
Redemption Price, the Final Expiration Date, the Purchase Price, or the number
of Preferred Share Fractions for which a Right is exercisable or (ii) which
adversely affects any Exempt Person, who at the time of such supplement or
amendment beneficially owns (without including for purposes of this clause
(ii), ownership by such Person's Affiliates) Common Shares without the consent
of such Exempt Person. 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. Notwithstanding any other provision hereof, the Rights
Agent's consent must be obtained regarding any amendment or supplement pursuant
to this Section 26 which alters the Rights Agent's rights or duties.
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Section 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of
which any Person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(1) (i) of the General Rules and Regulations under
the Exchange Act as in effect as of the date hereof. The Board of Directors of
the Company (with, where specifically provided for herein, the concurrence of
the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) or the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem
or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (ii) below, all omissions with respect to the foregoing) which are done
or made by the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors) in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (ii) not subject the Board (or the
Continuing Directors) to any liability to the holders of the Rights.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of 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 Company, the Rights Agent
and the registered holders of the Rights Certificates (and, prior to the Dis-
tribution Date, registered holders of the Common Shares) .
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Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or restriction is held
by such court or authority to be invalid, void or unenforceable and the Board
of Directors of the Company determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the close of business on
the tenth day following the date of such determination by the Board of
Directors.
Section 31. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State.
Section 32. 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 33. 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 their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: THE GEON COMPANY
By /s/ Xxx X. Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
--------------------------- ---------------------------
Name: Xxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: General Patent Counsel Title: Vice President and
and Assistant Secretary General Counsel
Attest: THE BANK OF NEW YORK
as Rights Agent
By /s/ Xxxxx X. XxXxxxxxx By /s/ Xxxx X. Xxxxxxxxx
--------------------------- ---------------------------
Name: Xxxxx X. XxXxxxxxx Name: Xxxx X. Xxxxxxxxx
Title: Assistant Treasurer Title: Vice President
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52
EXHIBIT A
---------
FORM OF CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS OF SERIES A
JUNIOR PARTICIPATING PREFERRED SHARES
of
THE GEON COMPANY
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Xxxxxxx X. Patient, President and Chief Executive Officer,
and Xxxxxxx X. Xxxxxx, Secretary, of The Geon Company, a corporation organized
and existing under the General Corporation Law of the State of Delaware
(the "Corporation"), in accordance with the provisions of Section 103 thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the said Corporation, the said Board of
Directors on March 31, 1993, adopted the following resolutions creating a
series of 60,000 Preferred Shares designated as Series A Junior
Participating Preferred Shares:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Shares of the Corporation
be and it hereby is created and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional, and other
special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Junior Participating Preferred Shares" and the
number of shares constituting such series shall initially be 60,000, par value
$0.10 per share, such number of shares to be subject to
53
EXHIBIT A
Page 2
increase or decrease by action of the Board of Directors as evidenced by a
certificate of designations.
Section 2. Dividends and Distributions.
----------------------------
(A) Subject to the prior and superior rights of the holders of any
series of Preferred Shares ranking prior and superior to the Series A Junior
Participating Preferred Shares with respect to dividends, the holders of shares
of Series A Junior Participating Preferred Shares shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on the
last day of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Junior Participating Preferred Shares, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $10
or (b) subject to the provision for adjustment hereinafter set forth, 500 times
the aggregate per share amount of all cash dividends, and 500 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in Common Shares or a subdivision
of the outstanding Common Shares (by reclassification or otherwise), declared
on the shares of common stock, par value $.10 per share, of the Corporation
(the "Common Shares") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series A Junior
Participating Preferred Shares. In the event the Corporation shall at any
time after May 28, 1993 (the "Rights Declaration Date") (i) declare any
dividend on Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding Common Shares into
a smaller number of shares, then in each such case the amounts to which holders
of Series A Junior Participating Preferred Shares were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is
the number of Common Shares outstanding immediately after such event and the
denominator of which is the number of Common Shares that were outstanding
immediately prior to such event.
54
EXHIBIT A
Page 3
(B) The Corporation shall declare a dividend or distribution on the
Series A Junior Participating Preferred Shares as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common
Shares (other than a dividend payable in Common Shares); provided that, in the
event no dividend or distribution shall have been declared on the Common Shares
during the period between any quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10 per share on the
Series A Junior Participating Preferred Shares shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding Series A Junior Participating Preferred Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Shares, unless the date of issue of such share
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of
holders of shares of Series A Junior Participating Preferred Shares entitled
to receive a Quarterly Dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the Series A Junior
Participating Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders
of Series A Junior Participating Preferred Shares entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be no
more than 30 days prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of Series A Junior
Participating Preferred Shares shall have the following voting rights:
55
EXHIBIT A
Page 4
(A) Subject to the provision for adjustment hereinafter set
forth, each Series A Junior Participating Preferred Share shall entitle the
holder thereof to 500 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common
Shares payable in common stock, (ii) subdivide the outstanding Common Shares
or (iii) combine the outstanding Common Shares into a smaller number of shares,
then in each such case the number of votes per share to which holders of Series
A Junior Participating Preferred Shares were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
Series A Junior Participating Preferred Shares and the holders of Common Shares
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior Participating
Preferred Shares shall be in arrears in an amount equal to six
(6) quarterly dividends thereon, the occurrence of such contingency shall
xxxx the beginning of a period (herein called a "default period") which
shall extend until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly dividend
period on all Series A Junior Participating Preferred Shares then
outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Preferred Shares (including
holders of the Series A Junior Participating Preferred Shares) with
dividends in arrears in an amount equal to (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect
two (2) Directors.
(ii) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Shares may be exercised initially
at a special
56
EXHIBIT A
Page 5
meeting called pursuant to subparagraph (iii) of this Section 3(C) or
at any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Shares, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised
unless the holders of ten percent in number of Preferred Shares outstanding
shall be present in person or by proxy. The absence of a quorum of the
holders of Common Shares shall not affect the exercise by the
holders of Preferred Shares of such voting right. At any meeting at which
the holders of Preferred Shares shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a
class, to fill such vacancies, if any, in the Board of Directors as may
then exist up to two (2) Directors or, if such right is exercised at an
annual meeting, to elect two (2) Directors. If the number which may be so
elected at any special meeting does not amount to the required number, the
holders of Preferred Shares shall have the right to make such increase in
the number of Directors as shall be necessary to permit the election by
them of the required number. After the holders of Preferred Shares shall
have exercised their right to elect Directors in any default
period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders
of Preferred Shares as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series A Junior
Participating Preferred Shares.
(iii) Unless the holders of Preferred Shares shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of Preferred Shares outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of Preferred
Shares, which meeting shall thereupon be called by the Chairman of the
Board, the President or the Secretary of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Preferred Shares are
57
EXHIBIT A
Page 6
entitled to vote pursuant to this paragraph (C) (iii) shall be given
to each holder of record of Preferred Shares by mailing a copy of such
notice to such holder at such holder's last address as the same appears on
the books of the Corporation. Such meeting shall be called for a time not
earlier than 10 days and not later than 60 days after such order or
request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of Preferred Shares outstanding.
Notwithstanding the provisions of this paragraph (C) (iii), no such special
meeting shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Shares, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of
Preferred Shares shall have exercised their right to elect two (2)
Directors voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of Preferred Shares shall continue in
office until their successors shall have been elected by such holders or
until the expiration of the default period, and (y) any vacancy in the
Board of Directors may (except as provided in paragraph (C) (ii) of this
Section 3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock which elected the
Director whose office shall have become vacant. References in this
paragraph (C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Shares as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of
Preferred Shares as a class shall terminate, and (z) the number of
Directors shall be such number as may be provided for in the Certificate of
Incorporation or By-Laws irrespective of any increase made pursuant to
58
EXHIBIT A
Page 7
the provisions of paragraph (C) (ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner provided by
law or in the Certificate of Incorporation or By-Laws) . Any vacancies in
the Board of Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the remaining
Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Shares shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Shares as set forth herein) for taking any corporate
action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating Preferred Shares as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on Series A Junior
Participating Preferred Shares outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred
Shares;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Shares, except dividends paid ratably on the Series
A Junior Participating Preferred Shares and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution
59
EXHIBIT A
Page 8
or winding up) with the Series A Junior Participating Preferred
Shares, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Shares; or
(iv) purchase or otherwise acquire for consideration any Series A
Junior Participating Preferred Shares, or any shares of stock ranking
on a parity with the Series A Junior Participating Preferred Shares, except
in accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences
of the respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any Series A Junior Participating
Preferred Shares purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares upon their cancellation become authorized but unissued
Preferred Shares and may be reissued as part of a new series of Preferred
Shares to be created by resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
liquidation (voluntary or otherwise), dissolu- tion or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
60
EXHIBIT A
Page 9
winding up) to the Series A Junior Participating Preferred Shares unless, prior
thereto, the holders of Series A Junior Participating Preferred Shares shall
have received $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of Series A Junior Participating
Preferred Shares unless, prior thereto, the holders of Common Shares shall have
received an amount per share (the "Common Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation Preference by (ii) 500
(as appropriately adjusted as set forth in subparagraph C below to reflect such
events as stock splits, stock dividends and recapitalizations with respect to
the Common Shares) (such number in clause (ii), the "Adjustment Number") .
Following the payment of the full amount of the Series A Liquidation Preference
and the Common Adjustment in respect of all outstanding Series A Junior
Participating Preferred Shares and outstanding Common Shares, respectively,
holders of Series A Junior Participating Preferred Shares and holders of Common
Shares shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio of the Adjustment Number to 1 with
respect to such Preferred Shares and Common Shares, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Junior Participating Preferred
Shares, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Shares.
(C) If the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Shares payable in Common Shares,
(ii) subdivide the outstanding Common Shares, or (iii) combine the outstanding
Common Shares into a smaller number of shares, then in each
61
EXHIBIT A
Page 10
such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that
were outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. If the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the Common Shares are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the Series A
Junior Participating Preferred Shares shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 500 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each Common Share is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares, or (iii) combine the outstanding
Common Shares into a smaller number of shares, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of Series A Junior Participating Preferred Shares shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator of
which is the number of shares of Common Shares that were outstanding
immediately prior to such event.
Section 8. NO REDEMPTION. The Series A Junior Participating Preferred
Shares shall not be redeemable.
Section 9. RANKING. The Series A Junior Participating
Preferred Shares shall rank junior to all other series of the Corporation's
Preferred Shares as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.
Section 10. AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Junior
62
EXHIBIT A
Page 11
Participating Preferred Shares so as to affect them adversely without the
affirmative vote of the holders of two-thirds (2/3) or more of the outstanding
Series A Junior Participating Preferred Shares, voting separately as a class.
Section 11. FRACTIONAL SHARES. Series A Junior Participating
Preferred Shares may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred
Shares.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this ____
day of May, 1993.
------------------------------
Xxxxxxx X. Patient
President and Chief Executive
Officer
Attest:
-------------------------
Xxxxxxx X. Xxxxxx
Secretary
63
EXHIBIT B
---------
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER May 27, 2003 OR EARLIER IF REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT (AS DEFINED HEREIN) .
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.] 1/
Rights Certificate
THE GEON COMPANY
This certifies that ______________________, or registered assigns, is
the registered holder 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 May 28, 1993 (as it may be amended from time
to time, the "Rights Agreement") , between The Geon Company, a Delaware
corporation (the "Company"), and The Bank of New York, a New York banking
corporation (the "Rights Agent"), to purchase from the Company at any time
prior to 5:00 P.M. (New York time) on May 27, 2003 at the office or offices of
the Rights Agent designated for such purpose, or its successors as Rights
Agent, one five- hundredth of a share of the Company's Series A Junior
Participating Preferred Shares, $0.10 par value (the "Preferred Shares"),
at a purchase price (the "Purchase
-------------------------
1/ The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
64
EXHIBIT B
Page 2
Price") of $100 per one five-hundredth of a share (such fraction, a "Preferred
Share Fraction") upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase set forth on the reverse hereof and the
Certificate contained therein duly executed. The Purchase Price shall be paid
at the election of the holder in cash or by certified bank check or money order
payable to the order of the Company. The number of Rights evidenced by this
Rights Certificate, the number of Preferred Share Fractions which may be
purchased upon exercise thereof and the Purchase Price per Preferred Share
Fraction, set forth above, are the number of Rights, number of Preferred Share
Fractions and Purchase Price as of May 28, 1993, based on the Preferred Shares
as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or any Affiliate
or Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any rights 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 Preferred Share Fractions and kind of shares of Preferred Shares or other
securities, which may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events (as such term is
defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent,
65
EXHIBIT B
Page 3
the Company and the holder of the Rights Certificate, which limitations of
rights include the temporary suspension of the exercisability of such Rights
under the specific circumstances set forth in the Rights Agreement. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available upon written request to the Rights Agent.
The Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of one five-hundredths of a
Preferred Share as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Board of Directors of the Company at
its option at a redemption price of $.01 per Right at any time prior to the
earlier of the close of business on (i) a Stock Acquisition Date, and (ii) the
Final Expiration Date.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one five-hundredth of a share of Preferred Shares, which may, at
the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Shares
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
66
EXHIBIT B
Page 4
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate shall
have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ___________, 19
ATTEST: THE GEON COMPANY
____________________________ By____________________________
Secretary Title:
Countersigned:
Dated as of _____________ , 00
XXX XXXX XX XXX XXXX
By___________________________
Authorized Signature
67
EXHIBIT B
Page 5
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _________________________________________ hereby sells,
assigns and transfers unto _____________________________________________
________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company with full power of substitution.
Dated: ________________________ , 19__
--------------------------------
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights
68
EXHIBIT B
Page 6
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person 'or an Affiliate or Associate of an
Acquiring Person.
Dated: _____________ , 19 ___________________________________
signature
NOTICE
------
The signatures to the foregoing Assignment and Certificate must correspond to
the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
69
EXHIBIT B
Page 7
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if the registered holder desires to exercise Rights
represented by the Rights Certificate.)
To: THE GEON COMPANY
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Rights Certificate to purchase Preferred Shares issuable
upon the exercise of the Rights (or such other securities of the Company or of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of and
delivered to:
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
Please insert social security
or other identifying number: _________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
70
EXHIBIT B
Page 8
Please insert social security
or other identifying number: _________________________________________________
Dated: ___________, 19
_________________________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________, 19 ____________________________
Signature
Signature Guaranteed:
NOTICE
------
The signatures to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
71
EXHIBIT C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On March 31, 1993, the Board of Directors of The Geon Company (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Common Stock, $.10 par value, of the Company (each, a "Common
Share") to shareholders of record at the close of business on May 28, 1993.
Each Right entitles the registered holder to purchase from the Company one
five-hundredth of a share (a "Preferred Share Fraction") of the Series A
Junior Participating Preferred Stock, par value $.10 per share, of the Company
(the "Preferred Shares"), or, in certain circumstances, a combination of
securities and assets of equivalent value, at a Purchase Price of $100 per
Preferred Share Fraction, subject to adjustment. Except as otherwise provided
in the Rights Agreement, the Purchase Price shall be paid in cash. The terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and The Bank of New York, as Rights Agent.
Initially, ownership of the Rights will be evidenced by the
Common Share certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) the
close of business on the tenth day after the date of a public announcement that
a person or group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial ownership of 15%
or more of the outstanding Common Shares (the "Stock Acquisition Date"), or
(ii) the close of business on the tenth business day after the date of the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 15% or more of the outstanding Common Shares.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Share certificates and will be transferred with and only with such Common Share
certificates, (ii) new Common Share certificates issued after May 28, 1993 will
contain a notation incorporating the Rights Agreement by reference and (iii)
the surrender for transfer of any certificates for Common Shares outstanding
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
72
EXHIBIT C
Page 2
The definition of Acquiring Person does not include any of the
following persons: (1) the Company, (ii) any subsidiary of the Company,
(iii) any Exempt Person (as defined below), (iv) any employee benefit plan or
employee stock plan of the Company or of any subsidiary of the Company, or any
trust or other entity organized, appointed, established or holding Common
Shares for or pursuant to the terms of any such plan or (v) any person or group
whose ownership of 15% or more of the Common Shares then outstanding
results solely from a reduction in the number of issued and outstanding
Common Shares pursuant to a transaction or transactions approved by the
Board of Directors; provided, however, that any person who is not an Acquiring
Person by reason of application of the immediately preceding clause (v) to such
person shall immediately become an Acquiring Person upon the acquisition of
additional Common Shares unless such acquisition would not result in such
person or group becoming an Acquiring Person by reason of such immediately
preceding clause (v).
"Exempt Person" shall mean The X.X.Xxxxxxxx Company ("BFG") and its
affiliates and any person to whom BFG transfers beneficial ownership of 10% or
more of the Common Shares then outstanding and any of such transferee's
affiliates. Notwithstanding the foregoing, an Exempt Person (and such Exempt
Person's affiliates) shall permanently lose its status as an Exempt Person at
such time as such Exempt Person and such Exempt Person's Affiliates
beneficially own less than 10% of the outstanding Common Shares.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on May 27, 2003, unless earlier redeemed
by the Company as described below or unless a transaction under Section 13(d)
of the Rights Agreement has occurred.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined
by the Board of Directors, and except in connection with the exercise of
employee stock options or stock appreciation rights or under any other benefit
plan for employees or directors or in connection with the exercise of
73
EXHIBIT C
Page 3
warrants or conversion of convertible securities, only Common Shares issued
prior to the Distribution Date will be issued with Rights.
Except in the circumstances described below, after the Distribution
Date each Right will be exercisable into one five-hundredth of a Preferred
Share (a "Preferred Share Fraction") . Each Preferred Share Fraction carries
voting and dividend rights that are intended to produce the equivalent of one
Common Share. The voting and dividend rights of the Preferred Shares are
subject to adjustment in the event of dividends, subdivisions and combinations
with respect to the Common Shares of the Company. In lieu of issuing
certificates for Preferred Share Fractions which are less than an integral
multiple of one Preferred Share (i.e. 500 Preferred Share Fractions), the
Company may pay cash representing the current market value of the Preferred
Share Fractions.
In the event that at any time, a person becomes the beneficial owner of
15% or more of the then outstanding Common Shares other than pursuant to a
tender or exchange offer for all outstanding Common Shares determined to be
fair to and otherwise in the best interests of the shareholders, each holder of
a Right will thereafter have the right to receive, upon exercise, Common
Shares (or, in certain circumstances, cash, property or other securities of
the Company) having a value equal to two times the Purchase Price of the Right.
In lieu of requiring payment of the Purchase Price upon exercise of the Rights
following any such event, the Company may permit the holders simply to
surrender the Rights, in which event they will be entitled to receive Common
Shares (and other property, as the case may be) with a value of 50% of what
could be purchased by payment of the full Purchase Price. Notwithstanding any
of the foregoing, following the occurrence of the event set forth in the first
sentence of this paragraph, 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.
For example, at an exercise price of $100 per Right, each Right not
otherwise voided following an event set forth in the preceding paragraph would
entitle its holder to purchase $200 worth of Common Shares (or other
consideration,
74
EXHIBIT C
Page 4
as noted above) for $100. Assuming that the Common Shares had a per share
value of $50 at such time, the holder of each valid Right would be entitled to
purchase four Common Shares for $100. Alternatively, the Company could permit
the holder to surrender each Right in exchange for one Common Share (with a
value of $50) without the payment of any consideration other than the
surrender of the Right.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than a
merger that is described in, or that follows a tender offer or exchange offer
described in, the second preceding paragraph), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a
Right (except Rights that previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common shares of the
acquiring company having a value equal to two times the exercise price of the
Right.
The Purchase Price payable, and the number of Preferred Share
Fractions or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) if holders of the Preferred
Shares are granted certain rights or warrants to subscribe for Preferred Shares
or convertible securities at less than the current market price of the
Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular quarterly
dividends) or of subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fraction of a Preferred Share Fraction will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading date prior to the date of exercise.
75
EXHIBIT C
Page 5
At any time prior to a the time that an Acquiring Person becomes an
Acquiring Person, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right. Under certain circumstances set forth in the
Rights Agreement, the decision to redeem will require the concurrence of
a majority of the Continuing Directors. Immediately upon the action of the
Board of Directors ordering redemption of the Rights, with, where required, the
concurrence of the Continuing Directors, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.01 redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of the
Rights Agreement, and any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Preferred Shares (or other
consideration) of the Company or for common shares of the acquiring company as
set forth above.
Other than those provisions relating to the principal economic
terms of the Rights and other than amendments which would adversely affect
Exempt Persons, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board (in certain circumstances, with the
concurrence of the Continuing Directors) in order to cure any ambiguity, to
make changes that do not adversely affect the interests of holders of Rights
(other than an Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to
adjust the time
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EXHIBIT C
Page 6
period governing redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
