STEEL TECHNOLOGIES INC.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
as Rights Agent
----------
Rights Agreement
Dated as of April 24, 1998
TABLE OF CONTENTS
SECTION PAGE
1. Certain Definitions. . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent. . . . . . . . . . . . . . . . 5
3. Issue of Rights Certificates . . . . . . . . . . . . . . . 6
4. Form of Rights Certificates. . . . . . . . . . . . . . . . 7
5. Countersignature and Registration. . . . . . . . . . . . . 8
6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates. . . . . . . . . . . . . . . 9
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. . . . . . . . . . . . . . . . . 10
8. Cancellation and Destruction of Rights Certificates. . . . 11
9. Reservation and Availability of Capital Stock. . . . . . . 12
10. Preferred Stock Record Date. . . . . . . . . . . . . . . . 13
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights . . . . . . . . . . . . . . . . 13
12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . . . . . . . . . 21
13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power . . . . . . . . . . . . . . . . . . . . . 21
14. Fractional Rights and Fractional Shares. . . . . . . . . . 23
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . 24
16. Agreement of Rights Holders. . . . . . . . . . . . . . . . 24
17. Rights Certificate Holder Not Deemed a Stockholder . . . . 25
18. Concerning the Rights Agent. . . . . . . . . . . . . . . . 25
19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 26
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . 26
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . 28
22. Issuance of New Rights Certificates. . . . . . . . . . . . 29
23. Redemption and Termination . . . . . . . . . . . . . . . . 29
24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 30
25. Notice of Certain Events . . . . . . . . . . . . . . . . . 31
26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 32
27. Supplements and Amendments . . . . . . . . . . . . . . . . 32
28. Successors . . . . . . . . . . . . . . . . . . . . . . . . 33
29. Determinations and Actions by the Board of
Directors, etc.. . . . . . . . . . . . . . . . . . . . . . 33
30. Benefits of this Agreement . . . . . . . . . . . . . . . . 33
31. Severability . . . . . . . . . . . . . . . . . . . . . . . 34
32. Governing Law. . . . . . . . . . . . . . . . . . . . . . . 34
33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 34
34. Descriptive Headings . . . . . . . . . . . . . . . . . . . 34
Exhibit A -- Form of Articles of Amendment
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of April 24, 1998 (the
"Agreement"), between Steel Technologies Inc., a Kentucky
corporation (the "Company"), and First Chicago Trust Company of New
York (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on April 24, 1998 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one right for each share of
common stock of the Company (the "Common Stock") outstanding at the
close of business on May 14, 1998 (the "Record Date"), and has
authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p)
hereof) for each share of Common Stock of the Company issued
between the Record Date (whether originally issued or delivered
from the Company's treasury) and the earlier of the Distribution
Date or the Expiration Date, each Right initially representing the
right to purchase one one-hundredth of a share of Series A Junior
Participating Preferred Stock of the Company having the rights,
powers and preferences set forth in the form of Articles of
Amendment attached hereto as Exhibit A, upon the terms and subject
to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding, but shall not include an Exempt
Person, provided, however, that (i) if the Board of Directors of
the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" became such inadvertently
(including, without limitation, because (A) such Person was unaware
that it beneficially owned a percentage of Common Stock that would
otherwise cause such Person to be an "Acquiring Person" or (B) such
Person was aware of the extent of its Beneficial Ownership of
Common Stock but had no actual knowledge of the consequences of
such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, and if
such Person as promptly as practicable divested or divests itself
of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such person would no longer be an "Acquiring Person,"
then such person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement; and (ii) no
Person shall become an "Acquiring Person" as the result of an
acquisition of shares of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the
proportionate number of shares of Common Stock beneficially owned
by such Person to 20% or more of the shares of Common Stock then
outstanding, provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding by reason of such share acquisitions by the Company and
shall thereafter become the Beneficial Owner of any additional
shares of Common Stock (other than pursuant to a dividend or
distribution paid or made by the Company on the
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outstanding Common Stock in shares of Common Stock or pursuant to a
split or subdivision of the outstanding Common Stock), then such
Person shall be deemed to be an "Acquiring Person" unless upon
becoming the Beneficial Owner of such additional shares of Common
Stock such Person does not beneficially own 20% or more of the
shares of Common Stock then outstanding; and provided, further,
however, that any Person who, together with all Affiliates and
Associates of such Person, owns 20% or more, such Person shall not
be or become an "Acquiring Person" unless and until such time as
the Beneficial Ownership of such Person, together with all
Affiliates and Associates of such Person, shall increase by 1% more
than such Person's percentage of Beneficial Ownership of the
Common Stock outstanding immediately after such acquisitions by the
Company as a result of such Person acquiring Beneficial Ownership
of additional outstanding shares of Common Stock or securities
convertible into Common Stock (other than shares acquired as a
result of the death of a parent or spouse or pursuant to a profit-
sharing, stock-based incentive compensation or other employee
benefit plan maintained by the Company, to a dividend or
distribution paid or made by the Company on the outstanding Common
Stock in shares of Common Stock, or to a split or subdivision of
the outstanding Common Stock.)
For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(l)(i) of the General Rules and
Regulations under the Exchange Act, as in effect on the date
hereof.
(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 Exchange Act, as in effect
on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender offer or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time before the
occurrence of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of such
Person's Affiliates or Associates before the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) or Section 11(p) hereof in
connection with an adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act), including pursuant to any agreement, arrangement
or understanding, whether or not in writing; provided,
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however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security under this subparagraph
(ii) as a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's Affiliates
or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (c)) or disposing of
any voting securities of the Company; provided, however, that
nothing in this paragraph (c) shall cause a person engaged in
business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired
through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after
the date of such acquisition; provided, however, that no Person who
is an officer, director, partner or employee of an Exempt Person
shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of or to "beneficially own" any securities
that are "beneficially owned" (as defined in this Section 1(c)),
including, without limitation, in a fiduciary capacity, by an
Exempt Person or by any other such officer, director, partner or
employee of an Exempt Person.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(e) "close of business" on any given date shall mean
5:00 P.M., Eastern standard time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
Eastern standard time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the common stock of the
Company. "Common Stock" when used with reference to any Person
other than the Company shall mean the common stock (or, in the case
of an unincorporated entity, the equivalent equity interest) with
the greatest voting power of such other Person or, if such other
Person is subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned person.
(g) "Common Stock Equivalents" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(h) "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a
member of the Board, who is not an Acquiring Person or an Affiliate
or Associate of any such Person, or a representative or nominee of
any such Person, Affiliate or Associate, and was a member of the
Board before the date an Acquiring Person became such, or (ii) any
Person who subsequently becomes a member of the Board, while such
Person is a member of the Board, who is not an Acquiring Person or
an Affiliate or Associate of any such Person, or a representative
or nominee of any such Person, Affiliate or Associate, if
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such Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing Directors.
(i) "Current market price" shall have the meaning set
forth in Section 11(d)(i) hereof.
(j) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning set forth
in Section 3(a) hereof.
(l) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(m) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan, (iv) Xxxxxx X. Xxx,
Xxxxxxxx X. Xxx and Xxxxxx X. Xxx, or any of their respective
Affiliates and Associates, and (v) any Person whose acquisition of
shares of Common Stock has been approved in advance by the Board of
Directors of the Company.
(n) "Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(o) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(p) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(q) "Preferred Stock" shall mean shares of Series A
Junior Participating Preferred Stock of the Company, and to the
extent that there are not a sufficient number of shares of Series A
Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of Preferred Stock of the
Company designated for such purpose containing terms substantially
similar to the terms of the Series A Junior Participating Preferred
Stock.
(r) "Principal Party" shall have the meaning set forth
in Section 13(b) hereof.
(s) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(t) "Redemption Price" shall have the meaning set forth
in Section 23(a) hereof.
(u) "Rights" shall have the meaning set forth in the
recitals hereto.
(v) "Rights Certificates" shall have the meaning set
forth in Section 3(a) hereof.
(w) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(x) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(y) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
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(z) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(aa) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person or notice to the Company that an Acquiring Person
has become such.
(bb) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by such
Person or otherwise controlled by such Person.
(cc) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(dd) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(ee) "Triggering Event" shall mean any Section 11(a)(ii)
Event or Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall before the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on
the tenth calendar day (or such earlier or later date as may be
determined by action of the Board of Directors) after the Stock
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 the time any Person becomes an
Acquiring Person) after the date that a tender offer or exchange
offer by any Person (other than an Exempt Person) is first
published or sent or given within the meaning of Rule 14d-2(a) of
the General Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding, (the
earlier of (i) and (ii) being herein referred to as the
"Distribution Date") (provided, however, that if either of such
dates occurs after the date of this Agreement and on or prior to
the Record Date, then the Distribution Date shall be the Record
Date), (x) the Rights will be evidenced (subject to the provisions
of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or
more rights certificates, in substantially the form of Exhibit B
hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided
5
herein. If an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at the
time of distribution of the Rights Certificates, the Company shall
make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), by first-class, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records of
the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock
together with the Summary of Rights and the registered holders of
the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or
the Expiration Date (as such term is defined in Section 7 hereof),
the transfer of any certificates representing shares of Common
Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares
of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from
the Company's treasury, if any) after the Record Date but before
the earlier of the Distribution Date or the Expiration Date.
Certificates representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and all certificates issued
for newly issued shares or transfers of Common Stock after the
Record Date shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
Steel Technologies Inc. (the "Company") and First Chicago NBD (the
"Rights Agent") dated as of April 24, 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 offices
of the Company. 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.
The Company will mail to the holder of this certificate a copy of
the Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may
become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii) the
Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented
by such certificates.
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Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Agreement
(including, without limitation, the provisions of Section 7(e)
hereof) or the rights of any holder of the Rights.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22
hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the
holders thereof to purchase such number of one one-hundredths of a
share of Preferred Stock as shall be set forth therein at the price
set forth therein (such exercise price per one one-hundredth of a
share, the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially owned
by: (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after
such Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee before or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following
legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby have become null
and void in the circumstances and with the effect specified in
Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, President, or any Vice
President of the Company, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned manually
by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the
7
Company who shall have signed any of the Rights Certificates shall
cease to be such officer of the Company before countersignature by
the Rights Agent and issuance and delivery by the Company, such
Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the certificate number and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section
7(e), Section 14 and Section 24 hereof, at any time after the close
of business on the Distribution Date, and at or before the close of
business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock (or, following a Triggering Event,
Common Stock, other securities, cash or other assets, as the case
may be) as the Rights Certificate or Certificates surrendered then
entitled such holder (or former holder in the case of a transfer)
to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall
make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal
office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall
have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section
7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may require payment
of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a
new Rights Certificate of like tenor to the
8
Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the registered
holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth in Section
9(c), Section 11(a)(iii), Sections 23(a) and 24(a) hereof) in whole
or in part at any time after the Distribution Date upon surrender
of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to
the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of one
one-hundredths of a share of Preferred Stock (or other securities,
cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or before the earliest
of (i) the close of business on May 14, 2008 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof (the earlier of (i),
(ii) and (iii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredths of a
share of Preferred Stock pursuant to the exercise of a Right shall
initially be $50.00, and shall be subject to adjustment from time
to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, accompanied
by payment, with respect to each right so exercised, of the
Purchase Price per one one-hundredth of a share of Preferred Stock
(or other shares, securities, cash or other assets, as the case may
be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make available,
if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-hundredths of a share
of Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the
total number of shares of Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of
one one-hundredths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will
direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid
in lieu of 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 Rights Certificate, registered in such
name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) may be made in cash or by certified bank
check or bank draft payable to the order of the Company. If the
Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all
9
arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent,
if and when appropriate. The Company reserves the right to require
before the occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or names as may
be designated by such holder, subject to the provisions of Section
14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
Person, or an Associate or Affiliate of an Acquiring Person, (ii) a
direct or indirect transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a direct or indirect
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee before or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without
any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use
all reasonable efforts to insure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights Certificates or other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates.
(a) All Rights Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to
the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Rights Certificates to the Company,
10
or shall, at the written request of the Company, destroy such
canceled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement, including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the exercise
of the Rights may be traded on any national securities exchange,
the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares reserved for
such issuance to be traded on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the first occurrence of a Section
11(a)(ii) Event, or, if applicable, as soon as practicable
following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the
Company upon the exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, a registration statement
on an appropriate form under the Securities Act of 1933 (the
"Act"), with respect to the securities purchasable upon exercise of
the Rights, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable
for such securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend,
for a period of time not to exceed ninety (90) days after the date
set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company
shall determine that a registration statement is required following
the Distribution Date, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration
statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not
be exercisable in any jurisdiction if the requisite qualification
in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-
hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to
11
payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax that may be payable in
respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of a number of one
one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to issue
or deliver any certificates for a number of one one-hundredths of a
share of Preferred Stock (or Common Stock and/or other securities,
as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-hundredths of a
share of Preferred Stock (or Common Stock and/or other securities,
as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of such
fractional shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment
is a date upon which the Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company
are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock (or Common Stock and/or other securities,
as the case may be) transfer books of the Company are open. Before
the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate, as such, shall not be entitled to any rights of
a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and
kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided
in this Section 11.
(a) (i) If the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares, or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date
12
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares
of Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised
immediately before such date and at a time when the Preferred Stock
transfer books of the Company were open, he would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and
shall be made before, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event any
Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, become an Acquiring Person, then, prior
to the date on which the Company's right of redemption pursuant to
Section 23(a) hereof expires, proper provision shall be made so
that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of
one one-hundredths of a share of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
then number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately before the first
occurrence of a Section 11(a)(ii) Event whether or not such Right
was then exercisable, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to as
the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (as determined
pursuant to Section 11(d)(i) hereof) per share of Common Stock on
the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) If the number of shares of Common Stock that are
authorized by the Company's Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph
(ii) of this Section 11(a), the Company shall, to the extent
permitted by applicable law and regulation: (A) determine the
excess of (l) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase
Price (such excess, the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock which the Board of
Directors of the Company has deemed to have the same value as
shares of Common Stock (such shares of preferred stock, "Common
Stock Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate
has been determined by the Board of Directors of the Company based
upon the advice of an investment banking firm selected by the Board
of Directors of the Company; provided, however, if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the date
on which the Company's right of redemption pursuant to Section
23(a) expires (the later of (x) and
13
(y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is
likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional
shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences
of this Section 11(a)(iii), the Company (x) shall provide, subject
to Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order
to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the current
market price (as determined pursuant to Section 11(d) hereof) per
share of the Common Stock on the Section 11(a)(ii) Trigger Date and
the value of any "common stock equivalent" shall be deemed to have
the same value as the Common Stock on such date.
(b) If the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent preferred
stock")) or securities convertible into Preferred Stock or
equivalent preferred stock at a price per share of Preferred Stock
or per share of equivalent preferred stock (or having a conversion
price per share, if a security convertible into Preferred Stock or
equivalent preferred stock) less than the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase
Price in effect immediately before such record date by a fraction,
the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of
Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent preferred
stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which
shall be the number of shares of Preferred Stock outstanding on
such record date, plus the number of additional shares of Preferred
Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Shares of Preferred
Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights or warrants
14
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) If the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including
any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase
Price in effect immediately before such record date by a fraction,
the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with
the Rights Agent) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights
or warrants applicable to a share of Preferred Stock and the
denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred
Stock. Such adjustments shall be made successively whenever such a
record date is fixed, and if such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price that
would have been in effect if such record date has not been fixed.
(d)(i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share
of such Common Stock for the thirty (30) consecutive Trading Days
(as such term is hereinafter defined) immediately before such date,
and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the "current market price" per share of Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however, that if the current market price per share of the Common
Stock is determined during a period following the announcement by
the issuer of such Common Stock of (A) a dividend or distribution
on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination or reclassification shall not have
occurred before the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth above,
then, and in each such case, the "current market price" shall be
properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed
or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
15
Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a
market in the Common Stock selected by the Board of Directors of
the Company. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such
date as determined in good faith by the Board of Directors of the
Company shall be used. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held
or not so listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or traded
in a manner described in clause (i) of this Section 11(d), the
"current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by the
current market price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed
or traded, "current market price" per share of the Preferred Stock
shall mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement,
the "current market price" of one one-hundredth of a share of
Preferred Stock shall be equal to the "current market price" of one
share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth
of a share of Common Stock or other share or one-millionth of a
share of Preferred Stock, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of (i)
three (3) years from the date of the transaction which mandates
such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock other than Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k)
16
and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Preferred Stock shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number
of one one-hundredths of a share of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b)
and (c), each Right outstanding immediately before the making of
such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of one one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth)
obtained by (i) multiplying (x) the number of one one-hundredths of
a share covered by a Right immediately before this adjustment, by
(y) the Purchase Price in effect immediately before such adjustment
of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of one one-hundredths of a
share of Preferred Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of one one-hundredths
of a share of Preferred Stock for which a Right was exercisable
immediately before such adjustment. Each Right held of record
before 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
before adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such holders
before the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders
of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per one
17
one-hundredth of a share and the number of one one-hundredths of a
share that were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of
the number of one one-hundredths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any
corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable such number of one one-hundredths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one one-
hundredths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over
and above the number of one one-hundredths of a share of Preferred
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in
effect before such adjustment; provided, however, that the Company
shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in
their good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock, (ii) issuance wholly for
cash of any shares of Preferred Stock at less than the current
market price, (iii) issuance wholly for cash of shares of Preferred
Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof),
or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o) thereof), if (x) at the time of
or immediately after such consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding
or agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights or (y) before, simultaneously with or immediately after such
consolidation, merger or sale, the shareholders of the Person who
constitute, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates.
18
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, if the Company shall at any time after the Rights
Dividend Declaration Date and before the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, or (iv) otherwise
reclassify the outstanding Common Shares, the number of Rights
associated with each share of Common Stock then outstanding, or
issued or delivered hereafter but before the Distribution Date,
shall be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following any
such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock
immediately before such event by a fraction (the "Adjustment
Fraction") the numerator of which shall be the total number of
shares of Common Stock outstanding immediately before the
occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately
following the occurrence of such event. In lieu of such adjustment
in the number of Rights associated with one Common Share, the
Company may elect to adjust the number of one one-hundredths of a
Preferred Share purchasable upon the exercise of one Right and the
Purchase Price. If the Company makes such election, the number of
Rights associated with ones Common Share shall remain unchanged,
and the number of one one-hundredths of a Preferred Share
purchasable upon exercise of one Right and the Purchase Price shall
be proportionately adjusted so that (i) the number of one one-
hundredths of a Preferred Share purchasable upon exercise of a
Right following such adjustment shall equal the product of the
number of one one-hundredths of a Preferred Share purchasable upon
exercise of a Right immediately prior to such adjustment multiplied
by the Adjustment Fraction and (ii) the Purchase Price following
such adjustment shall equal the product of the Purchase Price
immediately prior to such adjustment multiplied by the Adjustment
Fraction.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section
11 and Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of
the facts accounting for such adjustment, (b) promptly file with
the Rights Agent, and with each transfer agent for the Preferred
Stock and the Common Stock, a copy of such certificate, and (c)
mail a brief summary thereof to each holder of a Rights Certificate
(or, if before the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of such
adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) If, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than (i) an Exempt Person, or
(ii) a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than (i) an Exempt Person, or (ii) a
Subsidiary of the Company in a
19
transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation
or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of
any other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction
or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than (i) an Exempt Person, or (ii) the Company or
any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof), then, and in each such
case proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable shares of Common Stock of
the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of
one one-hundredths of a share of Preferred Stock for which a Right
is exercisable immediately before the first occurrence of Section
13 Event (or, if a Section 11(a)(ii) Event has occurred before the
first occurrence of a Section 13 Event, multiplying the number of
such one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately before the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately
before such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of
such Section 13 Event; (ii) such Principal Party shall thereafter
be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of
any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
20
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such
other Person; and (2) in case such Person is a Subsidiary, directly
or indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that
have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of
assets mentioned in paragraph (a) of this Section 13, the Principal
Party will
(i) prepare and file a registration statement under the
Act, with respect to the Rights and securities
purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to
cause such registration statement to (A) become
effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and
each of its Affiliates that comply in all respects
with the requirements for registration on Form 10
under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
If a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights that have not theretofore
been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except before the Distribution Date as provided in Section
11(p) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately before the date on which
such fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system 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
21
the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Rights are listed or admitted to trading, or if the
Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If on
any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates that evidence
fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-hundredth of a share of Preferred
Stock). In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share of Preferred
Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one one-hundredth of a share of Preferred
Stock. For purposes of this Section 14(b), the current market
value of one one- hundredth of a share of Preferred Stock shall be
one one-hundredth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately before the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one (1) share of
Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately before the
date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, other than rights of action vested in
the Rights Agent pursuant to Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and,
before the Distribution Date, the registered holders of the Common
Stock); and any registered holder of any Rights Certificate (or,
before the Distribution Date, of the Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights
Certificate (or, before the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged
that the holders of Rights
22
would not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person
subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) before the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose
name a Rights Certificate (or, before the Distribution Date, the
associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or
the associated Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be affected
by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any purpose
the holder of the number of one one-hundredths of a share of
Preferred Stock or any other securities of the Company which may at
any time be issuable upon the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except
as provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
23
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
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.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates
either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
24
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person and the determination of "current
market price") be proved or established by the Company before
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board and President,
any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify
the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible for
the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced
by Rights Certificates after receipt of the certificate described
in Section 12 hereof setting forth any such adjustment); nor shall
it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of
Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board and President, any Vice
President, the Secretary or any Assistant Secretary of the Company,
and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any
25
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniary
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the
case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent
shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days' notice in writing
mailed to the Company, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified mail, and to
the holders, if any, of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor
Rights Agent upon ten (10) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and Preferred Stock, by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of ten
(10) days after giving notice of such removal, or within a period
of thirty (30) days after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Rights Certificate (who shall, with
such notice, submit his Rights Certificate for inspection by the
Company), as the case may be, then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall
be a corporation organized and doing business under the laws of the
United States or of any state of the United States, which is in
good standing, is authorized under such laws to exercise transfer
agent or corporate trust powers, is subject to supervision or
examination by federal or state authority and is qualified to act
as a
26
Transfer Agent under the rules of the New York Stock Exchange.
After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Stock and the Preferred Stock,
and mail a notice thereof in writing to the registered holders of
the Rights Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date and before
the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock so issued or sold pursuant
to the exercise of stock options or under any employee plan or
arrangement, granted or awarded on or before the Distribution Date,
or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case,
if deemed necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however that (i) no such Rights Certificate shall be
issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time before the earlier of (x) the close of business
on the tenth calendar day following the Stock Acquisition Date (or
such later date as may be determined by action of the Board of
Directors), or (y) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of
$.01 per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided,
however, if the Board of Directors of the Company authorizes (i)
redemption of the Rights, or (ii) an extension of the date after
which the Rights may not be redeemed, in either case on or after
the time a Person becomes an Acquiring Person, then there must be
Continuing Directors then in office and such authorization shall
require the concurrence of a majority of such Continuing Directors.
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. The Company may, at its option,
pay the Redemption Price in cash, shares of Common Stock (based on
the "current market price," as
27
defined in Section 11(d)(i) hereof, of the Common Stock at the time
of redemption) or any other form of consideration deemed
appropriate by the Board of Directors. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of a Section 11(a)(ii)
Event until such time as the Company's right of redemption
hereunder has expired.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent, and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right
so held. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, before the Distribution
Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice 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.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time and from time to time after the first occurrence of a
Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock or common stock equivalents (as
defined in Section 11(a)(iii) hereof), or any combination thereof,
at an exchange ratio of one share of Common Stock, or such number
of common stock equivalents or units representing fractions thereof
as would be deemed to have the same value as one share of Common
Stock, per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any
time after an Acquiring Person shall have become the Beneficial
Owner of shares of Common Stock aggregating 50% or more of the
shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to Section
24(a) and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock and/or common stock equivalents
equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights
Agent. Any notice mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each
such notice of exchange will state the method by which the exchange
of the shares of Common Stock and/or common stock equivalents 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
28
than Rights that have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) If the number of shares of Common Stock that are
authorized by the Company's Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit an exchange of
Rights as contemplated in accordance with this Section 24, the
Company may, at its option, take all such action as may be
necessary to seek to authorize additional shares of Common Stock
for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates that evidence
fractional shares of Common Stock. In lieu of such fractional
shares of Common Stock, the Company shall pay to the registered
holders of Rights with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal to
the same fraction of the value of a whole share of Common Stock.
For purposes of this Section 24, the value of a whole share of
Common Stock shall be the closing price (as determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately before the date of exchange pursuant to this Section
24, and the value of any common stock equivalent shall be deemed to
have the same value as the Common Stock on such date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of
Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give
to each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares
of Preferred Stock, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days before the
record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) days before the date of the
taking of such proposed action or the date of participation therein
by the holders of the shares of Preferred Stock, whichever shall be
the earlier.
29
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice
of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under Section
11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holders
of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Steel Technologies Inc.
00000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: President
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or
by the holder of any Rights Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
First Chicago Trust Company of New York
000 Xxxxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attn: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if before the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. Supplements and Amendments. Before the Stock
Acquisition Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing
shares of Common Stock. From and after the Stock Acquisition Date
and subject to the penultimate sentence of this Section 27, the
Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein that
may be defective or inconsistent with any other provision herein,
(iii) to shorten or lengthen any time period hereunder (which
lengthening or shortening, following the first occurrence of a
Section 11(a)(ii) Event, shall be effective only if there are
Continuing Directors then in office and shall require the
concurrence of a majority of such Continuing Directors), or (iv) to
change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or
Associate of any such Person); provided, that, from and after the
Stock Acquisition Date, this Agreement may not be supplemented or
amended to lengthen, pursuant to
30
clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. Upon the
delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, from and
after the Stock Acquisition Date, no supplement or amendment shall
be made which changes the Redemption Price, the Final Expiration
Date, the Purchase Price or the number of one one-hundredths of a
share of Preferred Stock for which a Right is exercisable. Before
the Stock Acquisition Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of
Common Stock.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect
of the date hereof. The Board of Directors of the Company (with,
where specifically provided for herein, the concurrence of the
Continuing Directors) shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers
specifically granted to the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors)
or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation,
the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including, but
not limited to, a determination to redeem or not redeem the Rights
or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors)
in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board (or the Continuing
Directors) to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, before the Distribution Date, registered holders
of the Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, before the
Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this
31
Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court
or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth day
following the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provisions requiring that a
determination be made by less than the entire Board is held by a
court of competent jurisdiction or other authority to be invalid,
void or unenforceable, such determination shall then be made by the
entire Board.
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of Kentucky and for all purposes shall
be governed by and construed in accordance with the laws of such
State applicable to contracts made and to be performed entirely
within such State.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
Attest: STEEL TECHNOLOGIES INC.
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxxx X. Xxx
-------------------- -------------------
Xxxx X. Xxxxxxx Xxxxxxxx X. Xxx
Secretary President and Chief Operating Officer
Attest: FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By: /s/ Xxxxx Ensminar By: /s/ Xxxxxx X. Xxxxxx
------------------ --------------------
Name: Xxxxx Ensminar Name: Xxxxxx X. Xxxxxx
Title: Vice President Title: Vice President
32
Exhibit A
FORM OF
THIRD ARTICLES OF AMENDMENT
TO THE
RESTATED ARTICLES OF INCORPORATION
OF
STEEL TECHNOLOGIES INC.
Pursuant to the applicable provisions of the Kentucky
Business Corporation Act, these Third Articles of Amendment to the
Restated Articles of Incorporation of Steel Technologies Inc. (the
"Corporation") are hereby adopted and are being delivered to the
Kentucky Secretary of State for filing. The information required
by KRS 271B.6-020(4) is as follows:
FIRST: The name of the Corporation is Steel Technologies
Inc..
SECOND: These Articles of Amendment amend current ARTICLE IV
of the Corporation's Restated Articles of Incorporation by
establishing a new series of Junior Participating Preferred Stock.
As amended, a new subsection shall be added to the end of Article
IV, which subsection shall read in its entirety as follows:
"Of the 500,000 shares of Preferred Stock authorized by
Article IV, 200,000 shall be designated Series A Junior
Participating Preferred Stock (hereinafter called this "Series").
Such number of shares may be increased or decreased by resolution
of the Board of Directors; provided, that no decrease shall reduce
the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into shares of
this Series.
(a) Dividends with respect to this Series shall be as
follows:
(1) Subject to the prior and superior rights of the holders
of any shares of any other series of Preferred Stock or other class
of capital stock of the Corporation ranking prior and superior to
the shares of this Series with respect to dividends, the holders of
shares of this Series shall be entitled to receive, when and as
declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on March 31,
June 30, September 30 and December 31 of each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of this
Series, in an amount per share (rounded to the nearest cent) equal
to the greater of (A) $1.00 or (B) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock of
the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of this Series. If
the Corporation shall at any time after April 24, 1998 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which
holders of shares of this Series were entitled immediately before
such event under clause (B) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
before such event (the "Adjustment Ratio").
(2) The Corporation shall declare a dividend or distribution
on this Series as provided in clause (A) of the preceding paragraph
(1) immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on
this Series shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative on
outstanding shares of this Series from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of
this Series unless the date of issue of such shares is before the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of this Series entitled to
receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin
to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of this Series in an amount less than
the total amount of such dividends at the time accrued and payable
on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of
shares of this Series entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more
than 30 days before the date fixed for the payment thereof.
(4) No full dividends shall be declared or paid or set apart
for payment on the Preferred Stock of any series ranking, as to
dividends, on a parity with or junior to this Series for any period
unless full cumulative dividends have been or contemporaneously are
declared and a sum sufficient for the payment thereof set apart for
such payment on this Series for all dividend payment periods
terminating on or prior to the date of payment of such full
cumulative dividends. When dividends are not paid in full, as
aforesaid, upon the shares of this Series and any other Preferred
Stock ranking on a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any other
Preferred Stock ranking on a parity as to dividends with this
Series shall be declared pro rata so that the amount of dividends
declared per share on this Series and such other Preferred Stock
shall in all cases bear to each other the same ratio that accrued
dividends per share on the shares of this Series and such other
Preferred Stock bear to each other. Holders of shares of this
Series shall not be entitled to any dividends, whether payable in
cash, property or stock, in excess of full cumulative dividends, as
herein provided, on this Series. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend
payment or payments on this Series that may be in arrears.
(5) So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other
stock ranking junior to this Series as to dividends and upon
liquidation and other than as provided in subsection (a)(4) shall
be declared or paid or set aside for payment or other distribution
declared or made upon the Common Stock or upon any other stock
ranking junior to or on a parity with this Series as to dividends
or upon liquidation, nor shall any Common Stock or any other stock
of the Corporation ranking junior to or on a parity with this
Series as to dividends or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid
to or made available for a sinking fund for the redemption of any
shares of any such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking junior to
this Series as to dividends and upon liquidation) unless, in each
case, the full cumulative dividends on all outstanding shares of
this Series shall have been paid for all past dividend payment
periods.
(b) The holders of shares of this Series shall not have any
rights to convert such shares into or exchange such shares for
shares of any other class or classes or of any other series of any
class or classes of capital stock of the Corporation.
(c) The holders of shares of this Series shall have the
following voting rights:
(1) Each share of this Series shall entitle the holder
thereof to a number of votes equal to 100 multiplied by the
Adjustment Ratio on all matters submitted to a vote of the
shareholders of the Corporation.
(2) Except as otherwise required by law or the
Corporation's Articles of Incorporation, holders of shares of
this Series and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting
rights shall vote together as one voting group on all matters
submitted to a vote of shareholders of the Corporation.
(3) Except as otherwise required by law or the
Corporation's Articles of Incorporation, holders of shares of
this Series shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
(d)(1) Upon the dissolution, liquidation (voluntary or
otherwise), or winding up of the Corporation, the holders of the
shares of this Series shall be entitled to receive out of the
assets of the Corporation, before any payment or distribution shall
be made on the Common Stock, or on any other class of stock ranking
junior to this Series upon liquidation, the amount of $100.00 per
share, plus a sum equal to all dividends (whether or not declared)
on such shares accrued and unpaid thereon to the date of final
distribution (the "Liquidation Preference"). Following the payment
of the full amount of the Liquidation Preference, no additional
distributions shall be made to the holders of shares of this Series
unless, prior thereto, the holders of shares of Common Stock shall
have received an amount per share (the "Common Adjustment") equal
to the quotient obtained by dividing (i) the Liquidation Preference
by (ii) 100 (as appropriately adjusted as set forth in subsection
(d)(2) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock)
(such number in clause (ii), the "Adjustment Number"). Following
the payment of the full amount of the Liquidation Preference and
the Common Adjustment in respect of all outstanding shares of this
Series
and shares of Common Stock, respectively, holders of this Series
and holders of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis,
respectively.
(2) If the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in
effect immediately before such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
before such event.
(3) The sale, conveyance, exchange or transfer (for cash,
shares of stock, securities or other consideration) of all or
substantially all the property and assets of the Corporation shall
be deemed a voluntary dissolution, liquidation or winding up of the
Corporation for the purposes of this subsection (d)(3), but the
merger or consolidation of the Corporation into or with another
corporation or the merger or consolidation of any other corporation
into or with the Corporation, shall not be deemed to be a
dissolution, liquidation or winding up, voluntarily or
involuntarily, for the purposes of this subsection (d)(3).
(4) If the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
dissolution, liquidation or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full the
Liquidation Preference, no such distribution shall be made on
account of any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this Series upon such
dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this
Series, ratably, in proportion to the full distributable amounts
for which holders of all such parity shares are respectively
entitled upon such dissolution, liquidation or winding up. If,
however, there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining
assets shall be distributed ratably to the holders of Common Stock.
(e) The shares of this Series shall not be redeemable.
(f) In case the Corporation shall enter into any merger,
consolidation, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
each share of this Series shall at the same time be similarly
exchanged or changed into an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 100 times
the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time (i) declare any dividend on
the Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of this Series shall be adjusted
by multiplying such amount by a fraction, the numerator of which is
the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(g) The shares of this Series shall rank, with respect to the
payment of dividends and distribution of assets, junior to all
series of any other class of preferred stock of the Corporation,
unless the terms of any such series shall provide otherwise.
THIRD: These Articles of Amendment were duly adopted by the
Corporation's Board of Directors on April 24, 1998 without
shareholder action. Shareholder approval was not required.
IN WITNESS WHEREOF, the undersigned has executed these
Articles of Amendment as of this 24th day of April, 1998.
STEEL TECHNOLOGIES INC.
By: /s/ Xxxxxxxx X. Xxx
-------------------------------
Xxxxxxxx X. Xxx, President
and Chief Operating Officer
THIS INSTRUMENT PREPARED BY:
/s/ Xxxx X. Xxxxxxx, Esq.
-----------------------------
EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R- Rights
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NOT EXERCISABLE AFTER MAY 14, 2008, OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.01 PER RIGHT AND TO EXCHANGE ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.](1)
---------------------
1
The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Rights Certificate
STEEL TECHNOLOGIES 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 April 24, 1998 (the "Rights Agreement"), between Steel
Technologies Inc., a Kentucky corporation (the "Company"), and
First Chicago Trust Company of New York (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and before 5:00
P.M. (Eastern standard time) on May 14, 2008, at the office or
offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-hundredth of a fully paid, non-
assessable share of Series A Junior Participating Preferred Stock
(the "Preferred Stock") of the Company, at a purchase price of
$50.00 per one one-hundredth of a share (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed.
The number of Rights evidenced by this Rights Certificate (and the
number of shares that may be purchased upon exercise thereof) set
forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of April 24, 1998, based on the
Preferred Stock as
constituted at such date. The Company reserves the right to
require before the occurrence of a Triggering Event (as such term
is defined in the Rights Agreement) that a number of Rights be
exercised so that only whole shares of Preferred Stock will be
issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Person
(as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person or an Affiliate or Associate of any such
Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities that may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights
Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the
Rights Agreements are on file at the above- mentioned office of the
Rights Agent and are also available upon written request to the
Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of
the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificate of like tenor and
date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-hundredths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to
purchase. If this Rights Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at
its option at a redemption price of $.01 per Right; provided,
however, that any such redemption after a person has become an
Acquiring Person may be authorized only if the Company has
Continuing Directors (as such term is defined in the Rights
Agreement) then in office and the redemption is authorized with the
concurrence of a majority of such Continuing Directors; or (ii) may
be exchanged in whole or in part for shares of the Company's Common
Stock and/or other equity securities of the Company deemed to have
the same value as shares of Common Stock.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions that are integral multiples of one one-hundredth of
a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof
a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of shares of Preferred Stock or of any other securities of the
Company that 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 Company 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 Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated:
(SEAL)
ATTEST: STEEL TECHNOLOGIES INC.
By: By:
------------------------ -----------------------------
Xxxx X. Xxxxxxx Xxxxxxxx X. Xxx
Secretary President and Chief Operating
Officer
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Rights Agent
By:
---------------------------
Authorized Officer
Date:
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THE RIGHTS CERTIFICATE.)
FOR VALUE RECEIVED
----------------------------------------------
hereby sells, assigns and transfers unto
-----------------------------------------------------------------
-----------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
------------------
Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated:
----------------- --------------------------------
Signature
Signature Guaranteed:
-----------------
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Person
(as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became, an Acquiring Person or an Affiliate or Associate of any
such Person.
Dated:
----------------- --------------------------------
Signature
Signature Guaranteed:
-----------------------
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement
or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(TO BE EXECUTED IF HOLDER DESIRES TO EXERCISE
RIGHTS REPRESENTED BY THE RIGHTS CERTIFICATE.)
To: STEEL TECHNOLOGIES INC.
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights Certificate to
--------------
purchase the shares of Preferred Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any
other person that may be issuable upon the exercise of the Rights)
and requests that certificates for such shares be issued in the
name of and delivered to:
Please insert social security or other taxpayer identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for
the balance of such Rights shall be registered in the name of and
delivered to:
Please insert social security or other taxpayer identifying number
-----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
Dated:
-----------------------
------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated:
----------------- --------------------------------
Signature
Signature Guaranteed:
-----------------------
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever. IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT, THE RIGHTS
DESCRIBED HEREBY MAY BECOME NULL AND VOID.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On April 24, 1998, the Board of Directors of Steel
Technologies Inc. (the "Company") declared a dividend distribution
of one preferred share purchase right (a "Right") for each
outstanding share of the Company's Common Stock, no par value (the
"Common Stock"), payable to shareholders of record at the close of
business on May 14, 1998. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock (the "Preferred
Stock") at a price of $50.00 per one one-hundredth of a share of
Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and First
Chicago Trust Company of New York, as Rights Agent.
DISTRIBUTION DATE; TRANSFER OF RIGHTS
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate
from the Common Stock and a Distribution Date will occur upon the
earlier of (i) the tenth calendar day (or such earlier or later
date as may be determined by action of the Board of Directors)
following a public announcement or notice to the Company that a
person or group of affiliated or associated persons (an "Acquiring
Person"), other than certain exempt persons, has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding shares of Common Stock (the "Stock Acquisition
Date") or (ii) the tenth business day (or such later date as may be
determined by action of the Board of Directors prior to the time
any person becomes an Acquiring Person) following the commencement
of a tender offer or exchange offer that would result in a person
or group other than certain exempt persons, beneficially owning 20%
or more of such outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced
by the Common Stock certificates and will be transferred with and
only with such Common Stock certificates, and (ii) the surrender
for transfer of any certificates for Common Stock outstanding will
also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. Pursuant to the
Rights Agreement, the Company reserves the right to require before
the occurrence of a Triggering Event (as defined below) that, upon
any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on May 14, 2008, unless
earlier redeemed or exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued before the
Distribution Date will be issued with Rights.
EXERCISE OF RIGHTS FOR COMMON STOCK OF THE COMPANY
Following any Stock Acquisition Date, (i) each holder of a
Right not owned by an Acquiring Person (or by certain related
parties) will have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the
exercise price of the Right; and (ii) all Rights that are, or
(under certain circumstances specified in the Rights Agreement)
were beneficially owned by any Acquiring Person will be null and
void.
For example, at an exercise price of $50 per Right, each Right
not owned by an Acquiring Person (or by certain related parties)
following a Stock Acquisition Date would entitle its holder to
purchase $100 worth of Common Stock based on the current market
price (as defined in the Rights Agreement) of the Common Stock for
$50. Assuming that the current market price of the Common Stock is
$12.50 per share, the holder of each valid Right would be entitled
to purchase eight shares of Common Stock for $50.
EXERCISE OF RIGHTS FOR SHARES OF AN ACQUIRING COMPANY
If, at any time following the Stock Acquisition Date, (i) the
Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation,
or (ii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights that
previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise
price of the Right.
ADJUSTMENTS TO PURCHASE PRICE
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1%
of the Purchase Price. No fractional shares will be issued and, in
lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading date before
the date of exercise.
REDEMPTION AND EXCHANGE OF RIGHTS
On or before the tenth calendar day following the Stock
Acquisition Date (or such later date as may be determined by action
of the Board of Directors of the Company), the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right
(payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). The decision to redeem
after a Person becomes an Acquiring Person requires the concurrence
of a majority of the Continuing Directors. The redemption of the
Rights may be made effective at such time, on such basis and with
such conditions as the Board of Directors of the Company in its
sole discretion may establish. Immediately upon the action of the
Board of Directors ordering redemption of the Rights the Rights
terminate and the only remaining right of the holders of Rights
will be to receive the $.01 redemption price.
The term "Continuing Director" means any member of the Board
of Directors of the Company who was a member of the Board before
the date an Acquiring Person became such, and any person who is
subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person or an affiliate or associate of an
Acquiring Person or any representative or nominee of the foregoing
entities.
At any time after the Rights become exercisable for Common
Stock (or other consideration) of the Company, the Board of
Directors may exchange the Rights (other than Rights owned by an
Acquiring Person that have become void), in whole or in part, at an
exchange ratio of one Common Share, and/or other equity securities
deemed to have the same value as one Common Share, per Right,
subject to adjustment.
Until a Right is exercised or exchanged, the holder thereof,
as such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
AMENDMENTS TO TERMS OF THE RIGHTS
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company before the
Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board (in certain
circumstances, with the concurrence of the Continuing Directors) in
order to cure any ambiguity, to make changes that do not adversely
affect the interests of the holders of Rights (excluding the
interests of any Acquiring Person or an affiliate or associate of
any such person), or to shorten or lengthen any time period under
the Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such
time as the Rights are not redeemable.
TERMS OF THE PREFERRED STOCK
The Preferred Stock will rank junior to all other series of
the Company's preferred stock with respect to payment of dividends
and as to distributions of assets in liquidation. Each share of
Preferred Stock will have a quarterly dividend rate per share equal
to the greater of $1.00 or 100 times the per share amount of any
dividend (other than a dividend payable in shares of Common Stock
or a subdivision of the Common Stock) declared from time to time on
the Common Stock, subject to certain adjustments. The Preferred
Stock will not be redeemable. In the event of liquidation, the
holders of the Preferred Stock will be entitled to receive a
preferred liquidation payment per share of $100.00 (plus accrued
and unpaid dividends) or, if greater, an amount equal to 100 times
the payment to be made per share of Common Stock, subject to
certain adjustments. Generally, each share of Preferred Stock will
vote together with the Common Stock and any other class or series
of preferred stock entitled to vote in such manner and will be
entitled to 100 votes, subject to certain adjustments. In the
event of any merger, consolidation, combination or other
transaction in which shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or other property,
each share of Preferred Stock will be entitled to receive 100 times
the aggregate amount of stock, securities, cash and/or other
property, into which or for which each share of Common Stock is
changed or exchanged, subject to certain adjustments. The
foregoing dividend, voting and liquidation rights of the Preferred
Stock are protected against dilution in the event that additional
shares of Common Stock are issued pursuant to a stock split or
stock dividend or distribution. Because of the nature of the
Preferred Stock's dividend, voting, liquidation and other rights,
the value of the one one-hundredth of a share of Preferred Stock
purchasable with each Right is intended to approximate the value of
one share of Common Stock.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated April , 1998. A copy
---
of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
