_________________________________________________________________
_________________________________________________________________
CONTROL DEVICES, INC.
and
BANKBOSTON, N.A.
Rights Agent
RIGHTS AGREEMENT
Dated as of May 7, 1998
_________________________________________________________________
_________________________________________________________________
TABLE OF CONTENTS
Page
Section 1. Certain Definitions . . . . . . . . . . . . . .-1-
Section 2. Appointment of Rights Agent . . . . . . . . . .-4-
Section 3. Issue of Right Certificates . . . . . . . . . .-4-
Section 4. Form of Right Certificates. . . . . . . . . . .-5-
Section 5. Countersignature and Registration . . . . . . .-5-
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates . . . . . . . . . . .-6-
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights . . . . . . . . . . . . . . . . . . .-7-
Section 8. Cancellation and Destruction of Right Certificates-8-
Section 9. Availability of Common Shares . . . . . . . . .-8-
Section 10. Common Shares Ownership Date. . . . . . . . . .-9-
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. . . . . . . . . . . . . . . .-9-
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. . . . . . . . . . . . . . . . . . . . -15-
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power. . . . . . . . . . . . . . . -16-
Section 14. Fractional Rights and Fractional Shares . . . -18-
Section 15. Rights of Action. . . . . . . . . . . . . . . -19-
Section 16. Agreement of Right Holders. . . . . . . . . . -19-
Section 17. Right Certificate Holder Not Deemed a Shareholder-19-
Section 18. Concerning the Rights Agent . . . . . . . . . -20-
Section 19. Merger or Consolidation or Change of Name of Rights
Agent . . . . . . . . . . . . . . . . . . . . -20-
Section 20. Duties of Rights Agent. . . . . . . . . . . . -21-
Section 21. Change of Rights Agent. . . . . . . . . . . . -23-
Section 22. Issuance of New Right Certificates. . . . . . -23-
Section 23. Redemption. . . . . . . . . . . . . . . . . . -24-
Section 24. Exchange. . . . . . . . . . . . . . . . . . . -25-
Section 25. Notice of Certain Events. . . . . . . . . . . -26-
Section 26. Notices . . . . . . . . . . . . . . . . . . . -26-
Section 27. Supplements and Amendments. . . . . . . . . . -27-
Section 28. Successors. . . . . . . . . . . . . . . . . . -28-
Section 29. Benefits of this Agreement. . . . . . . . . . -28-
Section 30. Severability. . . . . . . . . . . . . . . . . -28-
Section 31. Governing Law . . . . . . . . . . . . . . . . -28-
Section 32. Counterparts. . . . . . . . . . . . . . . . . -28-
Section 33. Descriptive Headings. . . . . . . . . . . . . -28-
RIGHTS AGREEMENT
This Agreement, dated as of May 7, 1998, is between Control
Devices, Inc., an Indiana corporation (the "Corporation"), and
BankBoston, N.A. (the "Rights Agent").
WHEREAS, The Board of Directors of the Corporation desires to
authorize and declare a dividend of one common share purchase right
(a "Right") for each Common Share (as hereinafter defined) of the
Corporation outstanding on June 11, 1998, each Right representing
the right to purchase one share of Common Stock, no par value, of
the Corporation upon the terms and subject to the conditions
therein set forth, and further desires to authorize the issuance of
one Right with respect to each Common Share that is issued between
June 11, 1998 and the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).
WHEREAS, The Board desires to engage the Rights Agent to
administer the Rights pursuant to the terms and conditions of this
Agreement.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than any
Exempt Person), who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
is the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the Common Shares then outstanding; provided,
however, that the term "Acquiring Person" shall not include a
Person (i) who is the Beneficial Owner of 15% or more of the Common
Shares then outstanding solely as a result of a reduction in the
number of Common Shares outstanding, unless subsequent to such
reduction such Person or any Affiliate or Associate of such Person
shall become the Beneficial Owner of any additional Common Shares
other than as a result of a stock dividend, stock split or similar
transaction effected by the Corporation in which all shareholders
are treated equally; (ii) who, on May 7, 1998, is the Beneficial
Owner of 15% or more of the outstanding Common Shares; provided,
that such Person nonetheless shall become an Acquiring Person in
the event such Person thereafter acquires Beneficial Ownership of
an additional amount of Common Shares greater than 3% of Common
Shares then outstanding, unless the acquisition of such additional
Common Shares would not result in such Person becoming an Acquiring
Person by reason of clause (i) of this Section 1(a); or (iii) who
is the Beneficial Owner of 15% or more of the Common Shares then
outstanding but who acquired Beneficial Ownership of Common Shares
without any plan or intention to seek control of the Corporation,
if such Person promptly enters into a firm commitment to divest,
and thereafter promptly divests (without exercising or retaining
any power, including voting, with respect to such Shares),
sufficient Common Shares (or securities convertible into or
exercisable for Common Shares) so that such Person ceases to be the
Beneficial Owner of 15% or more of the then outstanding Common
Shares.
(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 May 7, 1998.
(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 beneficially owns, directly or
indirectly,
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public offering
of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, securities tendered
pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote or
dispose of pursuant to any agreement, arrangement or
understanding; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting or disposing of any securities of the
Corporation; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially
own, any security if such beneficial ownership arises
solely as a result of such Person's status as a "clearing
agency," as defined in Section 3(a)(23) of the Exchange
Act.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Corporation,
shall mean the number of such securities then issued and
outstanding together with the number of such securities
not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday,
a Sunday, or a day on which the office of the Rights Agent or
banking institutions in the State of Indiana are authorized or
obligated by law or executive order to close.
(e) "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 5:00 P.M., eastern time,
on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Corporation shall mean the shares of common stock, without par
value, of the Corporation; provided, however, that if the
Corporation is the continuing or surviving corporation in a
transaction described in Section 11(a)(ii) or Section 13 hereof,
"Common Shares" when used with reference to the "Corporation" shall
mean the capital stock or equity security with the greatest
aggregate voting power of the Corporation. "Common Shares" when
used with reference to any Person other than the Corporation
(including an Issuer as defined in Section 13 hereof) shall mean
the capital stock or equity security with the greatest voting power
of such other Person.
(g) "Distribution Date" shall mean the earlier of (i) the
Close of Business on the tenth calendar day after a Share
Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of
the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person
(other than any Exempt Person) or of the first public announcement
of the intention of any Person (other than any Exempt Person) to
commence a tender or exchange offer, the consummation of which
would result in any Person becoming the Beneficial Owner of Common
Shares aggregating 15% or more of the then outstanding Common
Shares (including any such date which is after May 7, 1998 and
prior to the issuance of the Rights).
(h) "Exempt Person" shall mean (i) the Corporation or any
Subsidiary of the Corporation, (ii) any employee benefit or stock
ownership plan of the Corporation or any entity holding Common
Shares for or pursuant to the terms of any such plan, or (iii) any
Person who acquires Common Shares from any other Exempt Person in
one or a series of related transactions, each of which is approved
by the Board of Directors; provided, however, that if any Person
who becomes a Exempt Person solely by virtue of subsection (iii)
above, or any Affiliate or Associate of such Person, subsequently
becomes the Beneficial Owner of any additional Common Shares in a
transaction or transactions not approved by the Board of Directors,
such Person shall no longer be deemed a "Exempt Person" with
respect to all Common Shares of which it, or any of its Affiliates
or Associates, is the Beneficial Owner."
(i) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, limited liability
partnership or other entity, and shall include any successor (by
merger or otherwise) of any such entity.
(j) "Share Acquisition Date" shall mean the first date of
public announcement by the Corporation or an Acquiring Person that
an Acquiring Person has become such.
(k) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or
indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Corporation
hereby appoints the Rights Agent to act as agent for the
Corporation and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be the
holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable, upon ten (10)
days' prior written notice to the Rights Agent. The Rights Agent
shall have no duty to supervise, and in no event will be liable for
the acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be
Right Certificates, as hereinafter defined) and not by separate
Right Certificates, and (ii) the right to receive Right
Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the
Distribution Date, the Corporation will prepare and execute, the
Rights Agent will countersign, and the Corporation will send or
cause to be sent (and the Rights Agent will, if requested, send) by
first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Corporation, a
Right Certificate, in substantially the form of Exhibit A hereto (a
"Right Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) As of June 11, 1998, or as soon as practicable
thereafter, the Corporation will send a copy of a Summary of Rights
to Purchase Common Shares, in substantially the form of Exhibit B
hereto (the "Summary of Rights"), in accordance with Section 26
hereof to each record holder of Common Shares as of the Close of
Business on June 11, 1998. With respect to certificates for Common
Shares outstanding as of June 11, 1998, until the Distribution Date
the Rights will be evidenced by such certificates registered in the
names of the holders thereof together with a copy of the Summary of
Rights. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for
transfer of any certificate for Common Shares outstanding as of
June 11, 1998, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred
to in the last sentence of this paragraph (c)) after June 11, 1998
but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles
the holder hereof to certain rights as set
forth in a Rights Agreement between Control
Devices, Inc. and BankBoston, N.A., dated as
of May 7, 1998 (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 Control
Devices, Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and
will no longer be evidenced by this
certificate. Control Devices, Inc. will mail
to the holder of this certificate a copy of
the Rights Agreement without charge after
receipt of a written request therefor. As
described in the Rights Agreement, Rights
issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement)
shall become null and void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the
event that the Corporation purchases or acquires any Common Shares
after June 11, 1998 but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and
retired so that the Corporation shall not be entitled to exercise
any Rights associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Common Shares
and of assignment to be printed on the reverse thereof) may have
such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Corporation may
deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject
to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of Common
Shares as shall be set forth therein at the price per Common Share
set forth therein (the "Purchase Price"), but the number of such
Common Shares and the Purchase Price shall be subject to adjustment
as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Corporation by its
Chairman of the Board, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature, shall
have affixed thereto the Corporation's seal or a facsimile thereof,
and shall be attested by the Secretary or any Assistant Secretary
of the Corporation, either manually or by facsimile signature. The
Right Certificates shall be manually or by facsimile countersigned
by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Corporation who shall
have signed any of the Right Certificates shall cease to be such
officer of the Corporation before countersignature by the Rights
Agent and issuance and delivery by the Corporation, such Right
Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Corporation with the same
force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Corporation;
and any Right Certificate may be signed on behalf of the
Corporation by any person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the
Corporation to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an
officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration
and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on its
face by each of the Right Certificates and the date of each of the
Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. Subject to the provisions of Section 14 hereof, at
any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof
or that have been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder
to purchase a like number of Common Shares as the Right Certificate
or Right Certificates surrendered then entitled each holder to
purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates
shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the office of
the Rights Agent designated for such purpose. Thereupon the Rights
Agent shall countersign and deliver to the person entitled thereto
a Right Certificate or Right Certificates, as the case may be, as
so requested. The Corporation may require payment of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Corporation and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Corporation's request,
reimbursement to the Corporation and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Corporation will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election
to purchase on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such
purpose, together with payment of the Purchase Price for each
Common Share as to which the Rights are exercised, at or prior to
the earliest of (i) the Close of Business on June 10, 2008 (the
"Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"),
or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price for each Common Share pursuant to the
exercise of a Right shall initially be $65.00 (which Purchase Price
reflects the effect of the five for four stock split payable to
holders of record of Common Shares as of the close of business on
May 29, 1998), shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check,
cashier's check or money order payable to the order of the
Corporation, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Common Shares
certificates for the number of Common Shares to be purchased and
the Corporation hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from the
depositary agent depositary receipts representing such number of
Common Shares as are to be purchased (in which case certificates
for the Common Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the
Corporation hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Corporation
the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Corporation or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by
the Corporation otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to the
Corporation, or shall, at the written request of the Corporation,
provide the Corporation with a copy thereof and destroy such
cancelled Right Certificates, and deliver a certificate of
destruction thereof to the Corporation.
Section 9. Availability of Common Shares.
(a) If the Common Shares issuable and deliverable upon the
exercise of Rights are listed on any national securities exchange,
the Corporation shall use its reasonable best efforts to cause,
from and after such time as the Rights become exercisable, all
Common Shares reserved for issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(b) The Corporation shall use its reasonable best efforts to
(i) file, as soon as practicable following the later to occur of an
event described in Section 11(a)(ii) or Section 13 hereof or the
Distribution Date, a registration statement under the Securities
Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon
as practicable after such filing and (iii) cause such registration
statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earliest of (A) the
date as of which the Rights are no longer exercisable for such
securities, (B) the Final Expiration Date and (C) the Redemption
Date. The Corporation 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; provided, however, that the
Corporation may temporarily suspend the exercisability of the
Rights to prepare and file such registration statement and permit
it to become effective, and upon any such suspension, the
Corporation shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable in
any jurisdiction unless the requisite qualification in such
jurisdiction shall have been obtained.
(c) The Corporation covenants and agrees that it will take
all such action as may be necessary to ensure that all Common
Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Common Shares (subject to
payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(d) The Corporation 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 Right Certificates or of any Common Shares upon
the exercise of Rights. The Corporation shall not, however, be
required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary
receipts for the Common Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any certificates
or depositary receipts for Common Shares upon the exercise of any
Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Corporation's
reasonable satisfaction that no such tax is due.
Section 10. Common Shares Ownership Date. Each person in
whose name any certificate for Common Shares is issued upon the
exercise of Rights shall for all purposes be deemed to have become
the holder of record of the Common Shares represented thereby on,
and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment
is a date upon which the Common Shares transfer books of the
Corporation are closed, such person shall be deemed to have become
the record holder on such succeeding Business Day on which the
Common Shares transfer books of the Corporation are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of
Common Shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the
Corporation, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Common 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 Corporation shall at any
time after June 11, 1998 (A) declare a dividend on the
Common Shares payable in Common Shares, (B) subdivide the
outstanding Common Shares, (C) combine the outstanding
Common Shares into a smaller number of Common Shares or
(D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or
merger in which the Corporation is the continuing or
surviving corporation), except as otherwise provided in
this Section 11(a), the Purchase Price in effect at the
time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior
to such date and at a time when the Common Shares
transfer books of the Corporation were open, he would
have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par
value, if any, of the shares of capital stock of the
Corporation issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the
event that a Share Acquisition Date shall occur at any
time after May 7, 1998, then each holder of a Right shall
thereafter have a right to receive, upon exercise thereof
in accordance with the terms of this Agreement and in
lieu of the number of Common Shares for which the Right
is then exercisable, such number of Common Shares of the
Corporation as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number
of Common Shares for which a Right is then exercisable
and dividing that product by (y) 50% of the then current
per share market price of the Corporation's Common Shares
(determined pursuant to Section 11(d) hereof as of the
date such Person became an Acquiring Person). In the
event that any Person shall become an Acquiring Person
and the Rights shall then be outstanding, the Corporation
shall not take any action which would eliminate or
diminish the benefits intended to be afforded by the
Rights.
From and after the occurrence of the event described
above, any Rights that are or were acquired or beneficially
owned by such Acquiring Person (or any Associate or Affiliate
of such Acquiring Person) shall be void and any holder of such
Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate
shall be issued pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof shall
be canceled.
(iii) In the event that there shall not be
sufficient Common Shares authorized and unissued to
permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii), the Corporation
shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon
exercise of the Rights. However, if the Corporation is
unable to cause the authorization of additional Common
Shares within 90 calendar days after the occurrence of an
event in Section 11(a)(ii), then, notwithstanding
anything in this Agreement to the contrary, the
Corporation shall determine the excess of the value, as
determined by the Board of Directors in good faith, of
the Common Shares issuable upon the exercise of a Right
over the Purchase Price (such excess being hereinafter
referred to as the "Spread") and shall be obligated to
deliver, upon the surrender of such Right and without
requiring payment of the Purchase Price, Common Shares
(to the extent available) and cash (to the extent
permitted by applicable law and any agreements or
instruments to which the Corporation is a party in effect
immediately prior to the first occurrence of an event in
Section 11(a)(ii)) in an amount equal to the Spread. To
the extent that any legal or contractual restrictions
prevent the Corporation from paying the full amount of
cash payable in accordance with the foregoing sentence,
the Corporation shall pay to holders of the Rights as to
which such payments are payable all amounts which are not
then restricted on a pro rata basis and shall continue to
make payments on a pro rata basis as funds become
available until the full amount due to each such Right
holder has been paid.
(b) In case the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 calendar
days after such record date) to subscribe for or purchase Common
Shares (or shares having the same rights, privileges and
preferences as the Common Shares ("equivalent common shares")) or
securities convertible into Common Shares or equivalent common
shares at a price per Common Share or equivalent common share (or
having a conversion price per share, if a security convertible into
Common Shares or equivalent common shares) less than the then
current per share market price of the Common Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Common
Shares outstanding on such record date plus the number of Common
Shares which the aggregate offering price of the total number of
Common Shares and/or equivalent common shares so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market
price and the denominator of which shall be the number of Common
Shares outstanding on such record date plus the number of
additional Common Shares and/or equivalent common shares to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value, if
any, of the shares of capital stock of the Corporation issuable
upon exercise of one Right. In case such subscription price may be
paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a statement
filed with the Rights Agent. Common Shares owned by or held for
the account of the Corporation shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event
that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Corporation is the continuing
or surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend payable
in Common Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then
current per share market price of the Common Shares on such record
date less the fair market value (as determined in good faith by the
Board of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to one Common Share and the denominator of which shall be such
current per share market price of the Common Shares; provided,
however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value, if
any, of the shares of capital stock of the Corporation to be issued
upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder,
the "current per share market price" of any Security (a
"Security" for the purpose of this Section 11(d)(i) shall
mean capital stock or equity security) on any date shall
be deemed to be the average of the daily closing prices
per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event
that the current per share market price of the Security
is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such
Security or securities convertible into such shares, or
(B) any subdivision, combination or reclassification of
such Security and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination of reclassification, then, and in each such
case, the current per share market price shall be
appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular
way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York
Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction
reporting system with respect to securities listed on the
principal national securities exchange on which the
Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any
national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the Security
is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a
professional market maker making a market in the Security
selected by the Board of Directors of the Corporation.
The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the
Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed
or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Common Shares
shall be determined in accordance with the method set
forth in Section 11(d)(i). If the Common Shares are not
publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth
of a Common Share or one ten-thousandth of any other
share or security as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the
Corporation other than Common Shares, thereafter the number of such
other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to
the Common Shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10 and 13 with
respect to the Common Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Corporation
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of Common Shares purchasable from time to time
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of Common Shares (calculated
to the nearest one ten-thousandth of a Common Share) obtained by
(i) multiplying (x) the number of Common Shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price
and (ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights in
substitution for any adjustment in the number of Common Shares
purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of Common Shares for which a Right was
exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one 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 Corporation shall make a public announcement
of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Corporation shall, as
promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such
adjustment, or, at the option of the Corporation, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof, if required
by the Corporation, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Common Shares issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of
Common Shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of
the Common Shares issuable upon exercise of the Rights, the
Corporation shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation
may validly and legally issue fully paid and nonassessable Common
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Corporation may elect to
defer until the occurrence of such event issuing to the holder of
any Right exercised after such record date the Common Shares and
other capital stock or securities of the Corporation, if any,
issuable upon such exercise over and above the Common Shares and
other capital stock or securities of the Corporation, if any,
issuable on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver
to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Corporation shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order
that any consolidation or subdivision of the Common Shares,
issuance wholly for cash or any Common Shares at less than the
current market price, issuance wholly for cash or Common Shares or
securities which by their terms are convertible into or
exchangeable for Common Shares, dividends on Common Shares payable
in Common Shares or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by the
Corporation to holders of its Common Shares shall not be taxable to
such shareholders.
(n) In the event that at any time after June 11, 1998 and
prior to the Distribution Date, the Corporation shall (i) declare
or pay any dividend on the Common Shares payable in Common Shares
or (ii) effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lessor number of
Common Shares, then in any such case (y) the number of Common
Shares purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of Common
Shares so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of
which is the number of Common Shares outstanding immediately after
such event, and (z) each Common Share outstanding immediately after
such event shall have issued with respect to it that number of
Rights which each Common Share outstanding immediately prior to
such event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever such
a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections
11 and 13 hereof, the Corporation shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Shares a copy of
such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof.
The Rights Agent shall be fully protected in relying on such
certificate and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event, directly or indirectly,
(a) the Corporation shall consolidate with, or merge with and
into, any other Person and shall not be the continuing or surviving
corporation of such merger or consolidation;
(b) any Person shall consolidate with the Corporation, or
merge with and into the Corporation and the Corporation shall be
the continuing or surviving corporation of such merger or
consolidation and, in connection with such merger or consolidation,
all or part of the Common Shares shall be changed into or exchanged
for stock or other securities of any other Person (or the
Corporation) or cash or any other property; or
(c) the Corporation shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in
one or more transactions, assets or earning power (including
without limitation securities creating any obligation on the part
of the Corporation and/or any of its Subsidiaries) aggregating 50%
or more of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any Person other than the
Corporation or one or more of its wholly-owned Subsidiaries,
then, and in each such case, proper provision shall be made so that
(i) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement and in lieu
of Common Shares of the Corporation, such number of validly
authorized and issued, fully paid, nonassessable and freely
tradeable Common Shares of such Person (including the Corporation
as successor thereto or as the surviving corporation), free and
clear of any liens, encumbrances and other adverse claims and not
subject to any rights of call or first refusal, as shall be equal
to the result obtained by (A) multiplying the then current Purchase
Price by the number of Common Shares for which a Right is then
exercisable (without taking into account any adjustment previously
made pursuant to Section 11(a)(ii) hereof) and dividing that
product by (B) 50% of the then current per share market price of
the Common Shares of such other Person (determined pursuant to
Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) the Issuer of such
Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Corporation pursuant to this
Agreement; (iii) the term "Corporation" shall thereafter be deemed
to refer to such Issuer; and (iv) such Issuer shall take such steps
(including, but not limited to, the reservation of a sufficient
number of its Common Shares) in connection with such consummation
as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the
exercise of the Rights. For purposes of this Section 13, "Issuer"
shall mean (x) in the case of any event described in Sections 13(a)
or (b) above, the Person that is the continuing, surviving,
resulting or acquiring Person (including the Corporation as the
continuing or surviving corporation of a transaction described in
Section 13(b) above), and (y) in the case of any event described in
Section 13(c) above, the Person that is the party receiving the
greatest portion of the assets or earning power (including without
limitation securities creating any obligation on the part of the
Corporation and/or any of its Subsidiaries) transferred pursuant to
such transaction or transactions; provided, however, that, in any
such case, (A) if (1) no class of equity security of such Person
is, at the time of such merger, consolidation or transaction and
has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act and (2) such
Person is a Subsidiary, directly or indirectly, of another Person,
a class of equity security of which is and has been so registered,
the term "Issuer" shall mean such other Person; and (B), in case
such Person is a Subsidiary, directly or indirectly, of more than
one Person, a class of equity security of two or more of which are
and have been so registered, the term "Issuer" shall mean whichever
of such Persons is the issuer of the equity security having the
greatest aggregate market value. Notwithstanding the foregoing, if
the Issuer in any of the events listed above is not a corporation
or other legal entity having outstanding equity securities, then,
and in each such case, (i) if the Issuer is directly or indirectly
wholly owned by a corporation or other legal entity having
outstanding equity securities, then all references to Common Shares
of the Issuer shall be deemed to be references to the Common Shares
of the corporation or other legal entity having outstanding equity
securities which ultimately controls the Issuer, and (ii) if there
is no such corporation or other legal entity having outstanding
equity securities, (Y) proper provision shall be made so that the
Issuer shall create or otherwise make available for purposes of the
exercise of the Rights in accordance with the terms of this
Agreement, a type or types of security or securities having a fair
market value at least equal to the economic value of the Common
Shares which each holder of a Right would have been entitled to
receive if the Issuer had been a corporation or other legal entity
having outstanding equity securities; and (Z) all other provisions
of this Agreement shall apply to the Issuer of such securities as
if such securities were Common Shares. The Corporation shall not
consummate any such consolidation, merger, sale or transfer unless
prior thereto the Issuer shall have a sufficient number of
authorized Common Shares (or other securities as contemplated
above) 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 to such consummation the Corporation
and such Issuer shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in
this Section 13 and further providing that as soon as practicable
after the consummation of any such consolidation, merger, sale or
transfer, the Issuer will
(i) prepare and file a registration statement under
the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of the
Expiration Date or the Redemption Date; and
(ii) deliver to holders of the Rights historical
financial statements for the Issuer and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 under the
Exchange Act.
The Corporation shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Right Certificates with
regard to which such fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or
such other system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of
the Corporation. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such
date as determined in good faith by the Board of Directors of the
Corporation shall be used.
(b) The Corporation shall not be required to issue fractions
of Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. In lieu of
fractional Common Shares, the Corporation shall pay to the
registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one Common Share. For
the purposes of this Section 14(b), the current market value of a
Common Share shall be the closing price of a Common Share (as
determined pursuant to Section 11(d) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided
above).
Section 15. Rights of Action. All rights of action in
respect of this Agreement, excepting the rights of action given to
the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior
to the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the
consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against
actual or threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the
Corporation and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares:
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Corporation and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Corporation or the Rights
Agent) for all purposes whatsoever, and neither the Corporation nor
the Rights Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose
the holder of the Common Shares, or any other securities of the
Corporation which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder
of any Right Certificate, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall have
been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Corporation
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability, or
expense incurred, in the absence of gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the
costs and expenses of defending against any claim of liability in
the premises.
The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate for
the Common Shares or for other securities of the Corporation,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20
hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 21 hereof.
In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement any of the Right Certificates
shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Corporation and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel, 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 be proved or established by the Corporation
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by any one of the Chairman
of the Board, the President, any Vice President, the Secretary or
the Treasurer of the Corporation and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Corporation and any other Person only for its own gross negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the
Corporation only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Corporation of any covenant or
condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section
11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in
Sections 3, 11, 13, 23 or 24, or the ascertaining of the existence
of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is
required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any Common Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Common Shares will, when
issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is xxxxxx authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the President,
any Vice President, the Secretary or the Treasurer of the
Corporation, 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 by it in good faith in
accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions. Any application by
the Rights Agent for written instructions from the Corporation may,
at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this
Agreement and the date on and/or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall
not be liable for any action taken by, or omission of, the Rights
Agent in accordance with a proposal included in any such
application on or after the date specified in such application
(which date shall not be less than five Business Days after the
date any such officer of the Corporation actually receives such
application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Corporation or become pecuniarily
interested in any transaction in which the Corporation may be
interested, or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Corporation
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Corporation resulting from any such act,
default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Corporation and to each transfer agent of the Common Shares by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Corporation may remove the
Rights Agent or any successor Rights Agent upon 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 by
registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. If the
Corporation shall fail to make such appointment within a period of
30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate who shall, with such notice, submit his Right
Certificate for inspection by the Corporation, then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Corporation or by
such a court, shall be (i) a corporation organized and doing
business under the laws of the United States (or of any state of
the United States so long as such corporation is authorized to do
business as a banking institution), validly existing and in good
standing, if applicable, 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 million or (ii) a subsidiary
of a corporation described in clause (i) of this sentence. After
appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment the Corporation shall
file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares, and mail a notice
thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case
may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue
new Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Corporation may, at its
option, at any time prior to the earlier of (i) the Final
Expiration Date and (ii) the tenth calendar day following the Share
Acquisition Date, or such later date as may be specified by a
majority of the Board of Directors prior to the time the right to
redeem would otherwise expire pursuant to this (ii) hereof, redeem
all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption
of the Rights by the Board of Directors may be made effective at
such time on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) If, following the occurrence of a Share Acquisition Date
and following the expiration of the right of redemption hereunder
but prior to the occurrence of an event described in Section 13
("Triggering Event") each of the following shall have occurred and
remain in effect: (i) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of Common Shares
in a transaction, or series of transactions, which did not result
in the occurrence of any Triggering Event such that such Person is
thereafter a Beneficial Owner of less than 10% of the outstanding
Common Shares, (ii) there are no other Persons, immediately
following the occurrence of the event described in clause (i), who
are Acquiring Persons, and (iii) the transfer or other disposition
described in clause (i) above was other than pursuant to a
transaction, or series of transactions, which directly or
indirectly involved the Corporation or any of its Subsidiaries,
then the right of redemption set forth in Section 23(a) shall be
reinstated and thereafter be subject to the provisions of this
Section; provided however, that such Person shall for all purposes
of this Agreement continue to be an Acquiring Person.
(c) Immediately upon the action of the Board of Directors of
the Corporation ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23, 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. The Corporation may, at
its option, pay the Redemption Price in cash, Common Shares (based
upon the current per share market price of the Common Shares
(determined pursuant to Section 11(d) hereof) at the time of
redemption) or any other form of consideration deemed appropriate
by the Board of Directors. The Corporation shall promptly give
public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action
of the Board of Directors ordering the redemption of the Rights
pursuant to paragraph (a), the Corporation shall mail a notice of
redemption to all the holders of the then outstanding Rights in
accordance with Section 26 hereof. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price
will be made. Neither the Corporation nor any of its Subsidiaries,
Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner other than that specifically
set forth in this Section 23 or in Section 24 hereof, and other
than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Corporation may, at its
option, at any time after a Share Acquisition Date, exchange all or
part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions
of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect
such exchange at any time after any Person (other than the
Corporation, any Subsidiary of the Corporation, any employee
benefit plan of the Corporation or any such Subsidiary, or any
entity holding Common Shares for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Corporation ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation shall promptly give public notice
of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange. The Corporation promptly shall mail a notice of any such
exchange to all of the holders of such Rights in accordance with
Section 26 hereof. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the method by
which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Corporation, at its option, may substitute equivalent common
shares, as such term is defined in Section 11(b) hereof, for Common
Shares exchangeable for Rights, as appropriately adjusted to
reflect adjustments in the voting rights of the Common Shares
pursuant to the terms thereof, so that the fraction of an
equivalent common share delivered in lieu of each Common Share
shall have the same voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with
this Section 24, the Corporation shall take all such action as may
be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights.
(e) In any exchange pursuant to this Section 24, the
Corporation shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common Shares, the
Corporation shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Common Share. For
the purposes of this paragraph (e), the current market value of a
whole Common Share shall be the closing price of a Common Share (as
determined pursuant to Section 11(d) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section
24.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Common
Shares or to make any other distribution to the holders of its
Common Shares (other than a regular quarterly cash dividend), (ii)
to offer to the holders of its Common Shares rights or warrants to
subscribe for or to purchase any additional Common Shares or shares
of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Common Shares, (iv) to
effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to, any other
Person, or (v) to effect the liquidation, dissolution or winding up
of the Corporation, then, in each such case, the Corporation shall
give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common Shares,
if any such date is to be fixed, and such notice shall be so given
in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of
the Common Shares for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of the
taking of such proposed action or the date of participation therein
by the holders of the Common Shares, whichever shall be the
earlier.
(b) In case a Share Acquisition Date shall occur, then the
Corporation shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice
shall describe such event and the consequences of such event to
holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder
of any Right Certificate to or on the Corporation shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Control Devices, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Corporation or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is
filed in writing with the Corporation) as follows:
BankBoston, N.A.
c/o Boston EquiServe
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made
by the Corporation or the Rights Agent to the holder of any Right
Certificate 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
transfer agent for the Common Shares prior to issuance of Right
Certificates; otherwise, at the address of such holder as shown on
the registry books of the Rights Agent.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, if the Corporation so directs, the Corporation
and the Rights Agent shall supplement or amend any provision of
this Agreement in any manner which the Corporation may deem
desirable without the approval of any holders of Rights or
certificates representing Common Shares. From and after the
Distribution Date, the Corporation, upon approval by the Board of
Directors, and the Rights Agent may supplement or amend this
Agreement without the approval of any holders of Rights or
Certificates representing Common Shares in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder
in any manner which the Corporation, upon such approval, may deem
desirable, including without limitation the addition of other
events requiring adjustment to the Rights under Sections 11 or 13
or procedures relating to the redemption of the Rights, which
change, amendment or supplement shall not adversely affect the
interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of any such Person);
provided, however, that this Agreement may not be supplemented or
amended pursuant to this sentence to lengthen, pursuant to clause
(iii) of this sentence, any time period unless such lengthening is
specifically contemplated hereby or is for the purpose of
protecting, enhancing or clarifying the rights of, or the benefits
to, the holders of Rights. Upon the delivery of a certificate from
the President or any Vice President of the Corporation which states
that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such
supplement or amendment; provided, however, that the failure or
refusal of the Rights Agent to execute such supplement or amendment
shall not affect the validity or effective date of any supplement
or amendment adopted by the Corporation. Notwithstanding anything
in this Agreement to the contrary, no supplement or amendment shall
be made which decreases the stated Redemption Price or the period
of time remaining until the Final Expiration Date.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Corporation or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person or corporation
other than the Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Corporation, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).
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.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Indiana and for all purposes shall
be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely
within such State.
Section 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.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
Control Devices, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
____________________________________
Xxxxx X. Xxxxxxxx, Chief Executive
Officer and President
Attest:
By: /s/ Xxxxxxx X. Xxxx
____________________________________
Xxxxxxx X. Xxxx, Secretary
BankBoston, N.A.
By: /s/ Xxxxxxxx Xxxxxxxx
____________________________________
Xxxxxxxx Xxxxxxxx, Director of
Client Services
Attest:
By: /s/ Xxxxxxx Xxxxxx
____________________________________
Xxxxxxx Xxxxxxx, Account Manager
EXHIBIT A
Form of Right Certificate
Certificate No. Rights
NOT EXERCISABLE AFTER JUNE 10, 2008 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT.
Right Certificate
Control Devices, Inc.
This certifies that , or registered
assigns, is the registered owner of the number of rights set forth
above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as
of May 7, 1998 (the "Rights Agreement"), between Control Devices,
Inc., an Indiana corporation (the "Corporation"), and BankBoston,
N.A. (the "Rights Agent"), to purchase from the Corporation at any
time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M., eastern time, on June 10,
2008 at the office of the Rights Agent designated for such purpose,
or at the office of its successor as Rights Agent, one fully paid
nonassessable share of the Common Stock, without par value, of the
Corporation (the "Common Shares"), at a purchase price of $65.00
per Common Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to
Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of Common Shares which may be
purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of June
11, 1998, based on the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the
number of Common Shares which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are incorporated herein by this 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 of the Corporation and of the holders of the
Right Certificates. Copies of the Rights Agreement are on file at
the principal executive offices of the Corporation and the above-mentioned
offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights
Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of Common Shares as the
Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
In no event will certificates for fractional Rights be issued.
Subject to the provisions of the Rights Agreement and Board
action, the Rights evidenced by this Certificate (i) may be
redeemed in whole, but not in part, by the Corporation at a
redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for an equal number of Common Shares.
No fractional Common Shares will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the
Common Shares or of any other securities of the Corporation which
may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed
to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for
any purchase until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation, and its corporate seal. Dated as of ____ __, _____.
ATTEST: Control Devices, Inc.
By: ____________________________________
Secretary
Countersigned:
BankBoston, N.A.
By: ____________________________________
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and
transfers unto __________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_________________________, Attorney, to transfer the within Right
Certificate on the books of the within-named Corporation, with full
power of substitution.
Dated:____________, ____
____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring
Person or an Affiliate or Associate hereof (as defined in the
Rights Agreement).
____________________________________
Signature
=================================================================
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Control Devices, Inc.:
The undersigned hereby irrevocably elects to exercise
____________________________ Rights represented by this Right
Certificate to purchase the Common Shares issuable upon the
exercise of such Rights and requests that certificates for such
Common Shares be issued in the name of:
Please insert social security
or other identifying number: ____________________________________
_________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number: ____________________________________
_________________________________________________________________
(Please print name and address)
Dated: _________________, ___________
____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
Form of Reverse Side of Right Certificate -- continued
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring
Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
____________________________________
Signature
NOTICE
The signature in the foregoing Forms of Assignment and
Election must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be,
is not completed, the Corporation and the Rights Agent will deem
the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On May 7, 1998, the Board of Directors of Control Devices,
Inc. (the "Corporation") declared a dividend of one common share
purchase right (a "Right" or "Rights") for each outstanding share
of the Corporation's common stock, without par value (the "Common
Shares"), of the Corporation and entered into a rights agreement.
Pursuant to the terms of that rights agreement, the Board of
Directors of the Corporation retained the right to amend it and
extend its expiration date in certain circumstances. If and when
the Rights become exercisable, each Right will entitle the
registered holder to purchase from the Corporation one Common Share
at a purchase price of $65.00 (the "Purchase Price"), although the
price may be adjusted as described below. The description and
terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Corporation and BankBoston, N.A.,
as Rights Agent (the "Rights Agent").
TRADING AND DISTRIBUTION OF RIGHTS
Shareholders will not receive a separate certificate for the
Rights. The Rights are represented by the outstanding Common Share
certificates with a copy of this summary of rights attached
thereto. The Rights cannot be bought, sold or otherwise traded
separately from the Common Shares. Certificates for Common Shares
issued after the record date for the dividend of the Rights will
carry a notation that indicates that Rights are attached to the
Common Shares and that the terms of the Rights Agreement are
incorporated therein.
Separate certificates representing the Rights will be
distributed as soon as practicable after the "Distribution Date,"
which is the earliest to occur of:
(1) 10 calendar days following a public
announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding
Common Shares, or
(2) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to
the time any person or group becomes an Acquiring Person)
following the commencement or announcement of an
intention to make a tender offer or exchange offer the
consummation of which would result in the beneficial
ownership by a person or group of 15% or more of such
outstanding Common Shares.
Until the Distribution Date (or earlier exchange, redemption
or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the date of the
Rights Agreement, even without such notation or a copy of this
Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date
and, thereafter, such separate Right Certificates alone will
evidence the Rights.
EXERCISABILITY AND EXPIRATION
The holders of the Rights are not required to take any action
until the Rights become exercisable. As described above, the
Rights are not exercisable until the Distribution Date. Holders of
the Rights will be notified that the Rights have become exercisable
when the Rights Agent mails the Rights Certificates. The Rights
will expire on June 10, 2008 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or unless the Rights are
earlier redeemed by the Corporation, in each case, as described
below.
ADJUSTMENTS
To protect the value of the Rights to the holders, the
Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time (1) in the event of a stock
dividend on, or a subdivision, combination or reclassification of,
the Common Shares, (2) upon the grant to holders of the Common
Shares of certain rights or warrants to subscribe for or purchase
Common Shares at a price, or securities convertible into Common
Shares with a conversion price, less than the then current market
price of Common Shares, or (3) upon the distribution to holders of
the Common Shares of evidences of indebtedness or assets (excluding
regular periodic cash dividends paid out of earnings or retained
earnings or dividends payable in Common Shares) or of subscription
rights or warrants, other than those referred to above.
These adjustments are called anti-dilution provisions and are
intended to ensure that a holder of Rights will not be adversely
affected by the occurrence of such events. With certain
exceptions, the Corporation is not required to adjust the Purchase
Price until cumulative adjustments require a change of at least 1%
in the Purchase Price. No fractional Common Shares will be issued
and in lieu thereof, an adjustment in cash will be made based on
the market price of the Common Shares on the last trading day prior
to the date of exercise.
FLIP-OVER EVENTS AND FLIP-IN EVENTS
In the event that (1) the Corporation is acquired in a merger
or other business combination transaction and the Corporation is
not the surviving corporation, or (2) any person consolidates or
merges with the Corporation and all or part of the Corporation's
Common Shares are exchanged for securities, cash or property of any
other person, or (3) 50% or more of the Corporation's consolidated
assets or earning power are sold (collectively, "Flip-Over
Events"), proper provision will be made so that each holder of a
Right, other than the Acquiring Person, will thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock
of the acquiring corporation which at the time of such transaction
will have a market value of two times the exercise price of the
Right. In the event that a person acquires 15% or more of the
outstanding Common Shares, (a "Flip-In Event"), proper provision
shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter
be void), will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the
exercise price of the Right.
EXCHANGE OPTION
At any time after a person becomes an Acquiring Person, and
prior to the acquisition by such Acquiring Person of 50% or more of
the outstanding Common Shares, the Board of Directors of the
Corporation may exchange the Rights (other than Rights owned by
such person or group which have become void), in whole or in part,
at an exchange ratio of one Common Share per Right (subject to
adjustment).
REDEMPTION
At any time prior to the tenth calendar day following the date
of a public announcement that a person or group has become an
Acquiring Person, the Board of Directors of the Corporation may
redeem the Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). The redemption of the Rights may
be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
If the Board of Directors' ability to redeem the Rights
pursuant to the Rights Agreement has expired, but a Flip-Over Event
or certain Flip-In Events have not yet occurred, the redemption
right will be reinstated if the Acquiring Person disposes of a
sufficient number of the Corporation's Common Shares so that such
person then owns less than 10% of the outstanding Corporation's
Common Shares and if certain other conditions are met.
The terms of the Rights may be amended by the Board of
Directors of the Corporation without the consent of the holders of
the Rights, except that from and after such time as any person
becomes an Acquiring Person no such amendment may adversely affect
the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Corporation, including,
without limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement is available from the
Corporation at no charge upon written request. 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 this reference.
