EXHIBIT 4.1
RIGHTS AGREEMENT
Dated as of August 13, 1998
By and Between
HON INDUSTRIES INC.
and
XXXXXX TRUST AND SAVINGS BANK, as Rights Agent
TABLE OF CONTENTS
Page
1. Certain Definitions 1
2. Appointment of Rights Agent 5
3. Issue of Right Certificates 5
4. Form of Right Certificates 6
5. Countersignature and Registration 7
6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates 7
7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 8
8. Cancellation and Destruction of Right
Certificates 9
9. Company Covenants Concerning Securities and Rights 9
10. Record Date 11
11. Adjustment of Purchase Price, Number and Kind
of Securities or Number of Rights 11
12. Certificate of Adjusted Purchase Price or Number
of Securities 20
13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 20
14. Fractional Rights and Fractional Securities 22
15. Rights of Action 24
16. Agreement of Rights Holders 24
17. Right Certificate Holder Not Deemed a Xxxxxxxxxxx 00
00. 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 Right Certificates 29
23. Redemption 30
24. Exchange 31
25. Notice of Certain Events 32
26. Notices 32
27. Supplements and Amendments 33
28. Successors; Certain Covenants 34
29. Benefits of This Agreement 34
30. Governing Law 34
31. Severability 34
32. Descriptive Headings, Etc. 34
33. Determinations and Actions by the Board 35
34. Counterparts 35
Page
Exhibit A A-1
Exhibit B B-1
Exhibit C C-1
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of August 13, 1998 (this
"Agreement"), is made and entered into by and between HON
INDUSTRIES Inc., an Iowa corporation (the "Company"), and Xxxxxx
Trust and Savings Bank (the "Rights Agent").
RECITALS
WHEREAS, on August 10, 1998, the Board of Directors of the
Company authorized and declared a dividend distribution of one
right (a "Right") for each Common Share (as hereinafter defined)
outstanding as of the Close of Business (as hereinafter defined)
on August 20, 1998 (the "Record Date"), each Right initially
representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined), on the terms and
subject to the conditions herein set forth, and further
authorized and directed the issuance of one Right (subject to
adjustment as provided herein) with respect to each Common Share
issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but
prior to the earlier of the Distribution Date (as hereinafter
defined) and the Expiration Date (as hereinafter defined) or as
provided in Section 22. Notwithstanding anything in this
Agreement to the contrary, this Agreement will not be effective
until the opening of business on August 13, 1998.
NOW, THEREFORE, in consideration of the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" means any Person (other than the
Company or any Related Person) who or which, together with all
Affiliates and Associates of such Person, is the Beneficial
Owner of 20% or more of the then-outstanding Common Shares;
provided, however, that a Person will not be deemed to have
become an Acquiring Person solely as a result of a reduction in
the number of Common Shares outstanding unless and until such
time as (i) such Person or any Affiliate or Associate of such
Person thereafter becomes the Beneficial Owner of additional
Common Shares representing 1% or more of the then-outstanding
Common Shares, other than as a result of a stock dividend, stock
split or similar transaction effected by the Company in which
all holders of Common Shares are treated equally, or (ii) any
other Person who is the Beneficial Owner of Common Shares
representing 1% or more of the then-outstanding Common Shares
thereafter becomes an Affiliate or Associate of such Person.
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" as defined pursuant to the
foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such
Person would no longer be an "Acquiring Person" as defined
pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
(b) "Affiliate" and "Associate" will 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, provided however, that a Person will
not be deemed to be the Affiliate or Associate of another Person
solely because either or both Persons are or were Directors of
the Company.
(c) A Person will be deemed the "Beneficial Owner" of, and
to "Beneficially Own," any securities:
(i) the beneficial ownership of 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, warrants, options or
other rights (in each case, other than upon exercise or
exchange of the Rights); provided, however, that a Person
will not be deemed the Beneficial Owner of, or to
Beneficially Own, securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange;
or
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has or
shares the right to vote or dispose of, including pursuant
to any agreement, arrangement or understanding (whether or
not in writing); or
(iii) of which any other Person is the Beneficial
Owner, if such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing) with such other Person (or any
of such other Person's Affiliates or Associates) with
respect to acquiring, holding, voting or disposing of any
securities of the Company;
provided, however, that a Person will not be deemed the
Beneficial Owner of, or to Beneficially Own, any security (A) if
such Person has the right to vote such security pursuant to an
agreement, arrangement or understanding (whether or not in
writing) which (1) arises solely from a revocable proxy given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report), or (B) if such
beneficial ownership arises solely as a result of such Person's
status as a "clearing agency," as defined in Section 3(a)(23) of
the Exchange Act; provided further, however, that nothing in
this paragraph (c) will 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 an underwriting syndicate until
the expiration of 40 calendar days after the date of such
acquisition, or such later date as the Board of Directors of the
Company may determine in any specific case.
(d) "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in the State of
New York (or such other state in which the principal office of
the Rights Agent is located) are authorized or obligated by law
or executive order to close.
(e) "Close of Business" on any given date means 5:00 P.M.,
Central Standard time, on such date; provided, however, that if
such date is not a Business Day it means 5:00 P.M., Central
Standard time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company means the shares of common stock, par value $1.00 per
share, of the Company; provided, however, that, if the Company
is the continuing or surviving corporation in a transaction
described in Section 13(a)(ii), "Common Shares" when used with
reference to the Company means shares of the capital stock or
units of the equity interests with the greatest aggregate voting
power of the Company. "Common Shares" when used with reference
to any corporation or other legal entity other than the Company,
including an Issuer, means shares of the capital stock or units
of the equity interests with the greatest aggregate voting power
of such corporation or other legal entity.
(g) "Company" means HON INDUSTRIES Inc., an Iowa
corporation.
(h) "Distribution Date" means the earlier of: (i) the
Close of Business on the tenth day following the Share
Acquisition Date, or (ii) the Close of Business on the tenth
Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by the
Board of Directors of the Company) after the commencement of a
tender or exchange offer by any Person (other than the Company
or any Related Person), if upon the consummation thereof such
Person would be the Beneficial Owner of 20% or more of the
then-outstanding Common Shares.
(i) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(j) "Expiration Date" means the earliest of (i) the Close
of Business on the Final Expiration Date, (ii) the time at which
the Rights are redeemed as provided in Section 23, and (iii) the
time at which all exercisable Rights are exchanged as provided
in Section 24.
(k) "Final Expiration Date" means the tenth anniversary of
the Record Date.
(l) "Flip-in Event" means any event described in clauses
(A), (B) or (C) of Section 11(a)(ii).
(m) "Flip-over Event" means any event described in clauses
(i), (ii) or (iii) of Section 13(a).
(n) "Issuer" has the meaning set forth in Section 13(b).
(o) "NASDAQ" means The NASDAQ Stock Market.
(p) "Person" means any individual, firm, corporation or
other legal entity, and includes any successor (by merger or
otherwise) of such entity.
(q) "Preferred Shares" means shares of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company having the rights and preferences set forth in the Form
of Statement of Resolution attached as Exhibit A.
(r) "Purchase Price" means initially $200.00 per one one-
hundredth of a Preferred Share, subject to adjustment from time
to time as provided in this Agreement.
(s) "Record Date" has the meaning set forth in the
Recitals to this Agreement.
(t) "Redemption Price" means $.01 per Right, subject to
adjustment by resolution of the Board of Directors of the
Company to reflect any stock split, stock dividend or similar
transaction occurring after the Record Date.
(u) "Related Person" means (i) any Subsidiary of the
Company or (ii) any employee benefit or stock ownership plan of
the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such
plan.
(v) "Right" has the meaning set forth in the Recitals to
this Agreement.
(w) "Right Certificates" means certificates evidencing the
Rights, in substantially the form attached as Exhibit B.
(x) "Rights Agent" means Xxxxxx Trust and Savings Bank,
unless and until a successor Rights Agent has become such
pursuant to the terms of this Agreement, and thereafter, "Rights
Agent" means such successor Rights Agent.
(y) "Securities Act" means the Securities Act of 1933, as
amended.
(z) "Share Acquisition Date" means the first date of
public announcement by the Company (by press release, filing
made with the Securities and Exchange Commission or otherwise)
that an Acquiring Person has become such.
(aa) "Subsidiary" when used with reference to any Person
means any corporation or other legal entity of which a majority
of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person;
provided, however, that for purposes of Section 13(b),
"Subsidiary" when used with reference to any Person means any
corporation or other legal entity of which at least 20% of the
voting power of the voting equity securities or equity interests
is owned, directly or indirectly, by such Person.
(bb) "Trading Day" means any day on which the principal
national securities exchange on which the Common Shares are
listed or admitted to trading is open for the transaction of
business or, if the Common Shares are not listed or admitted to
trading on any national securities exchange, a Business Day.
(cc) "Triggering Event" means any Flip-in Event or
Flip-over Event.
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,
will also be, prior to the Distribution Date, the holders of the
Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment and
hereby certifies that it complies with the requirements of
NASDAQ and the New York Stock Exchange governing transfer agents
and registrars. The Company may from time to time act as
co-Rights Agent or appoint such co-Rights Agents as it may deem
necessary or desirable. Any actions which may be taken by the
Rights Agent pursuant to the terms of this Agreement may be
taken by any such co-Rights Agent. To the extent that any
co-Rights Agent takes any action pursuant to this Agreement,
such co-Rights Agent will be entitled to all of the rights and
protections of, and subject to all of the applicable duties and
obligations imposed upon, the Rights Agent pursuant to the terms
of this Agreement.
3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights will be
evidenced by the certificates representing Common Shares
registered in the names of the record holders thereof (which
certificates representing Common Shares will also be deemed to
be Right Certificates), (ii) the Rights will be transferable
only in connection with the transfer of the underlying Common
Shares, and (iii) the surrender for transfer of any certificates
evidencing Common Shares in respect of which Rights have been
issued will also constitute the transfer of the Rights
associated with the Common Shares evidenced by such
certificates. On or as promptly as practicable after the Record
Date, the Company will send by first class, postage prepaid
mail, to each record holder of Common Shares as of the Close of
Business on the Record Date, at the address of such holder shown
on the records of the Company as of such date, a copy of a
Summary of Rights to Purchase Preferred Stock in substantially
the form attached as Exhibit C.
(b) Rights will be issued by the Company in respect of all
Common Shares (other than Common Shares issued upon the exercise
or exchange of any Right) issued or delivered by the Company
(whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed
on, printed on, written on, or otherwise affixed to them the
following legend or such similar legend as the Company may deem
appropriate and as is 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 or
transaction reporting system on which the Common Shares may from
time to time be listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between HON INDUSTRIES Inc. and
Xxxxxx Trust and Savings Bank, dated as of August 13,
1998 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of
HON INDUSTRIES Inc. The Rights are not exercisable
prior to the occurrence of certain events specified in
the Rights Agreement. Under certain circumstances, as
set forth in the Rights Agreement, such Rights may be
redeemed, may expire, may be amended, or may be
evidenced by separate certificates and no longer be
evidenced by this Certificate. HON INDUSTRIES Inc.
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
as set forth in the Rights Agreement, Rights that are
or were beneficially owned by an Acquiring Person or
any Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement) may
become null and void.
(c) As promptly as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent
will countersign and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send, at the expense
of the Company), by first class, insured, postage prepaid mail,
to each record holder of Common Shares as of the Close of
Business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate
evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. As of and after the Distribution
Date, the Rights will be evidenced solely by such Right
Certificates.
(d) In the event that the Company purchases or otherwise
acquires any Common Shares after the Record Date but prior to
the Distribution Date, any Rights associated with such Common
Shares will be deemed canceled and retired so that the Company
will not be entitled to exercise any Rights associated with the
Common Shares so purchased or acquired.
4. Form of Right Certificates. The Right Certificates
(and the form of election to purchase and the form of assignment
to be printed on the reverse thereof) will be substantially in
the form attached as Exhibit B with such changes and 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 or
transaction reporting system on which the Rights may from time
to time be listed or quoted, or to conform to usage. Subject to
the provisions of Section 22, the Right Certificates, whenever
issued, on their face will entitle the holders thereof to
purchase such number of one one-hundredths of a Preferred Share
as are set forth therein at the Purchase Price set forth
therein, but the Purchase Price, the number and kind of
securities issuable upon exercise of each Right and the number
of Rights outstanding will be subject to adjustment as provided
herein.
5. Countersignature and Registration.
(a) The Right Certificates will be executed on behalf of
the Company by its Chairman of the Board, its Chief Executive
Officer, its President, any Vice President or its Treasurer,
either manually or by facsimile signature, and will have affixed
thereto the Company's seal or a facsimile thereof which will be
attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
Certificates will be manually countersigned by the Rights Agent
and will not be valid for any purpose unless so countersigned.
In case any officer of the Company who signed any of the Right
Certificates ceases to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery
by the Company, such Right 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 Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed
on behalf of the Company by any person who, at the actual date
of the execution of such Right Certificate, is a proper officer
of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person
was not such officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at the principal office of the Rights
Agent designated for such purpose and at such other offices 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 or any transaction reporting
system on which the Rights may from time to time be listed or
quoted, books for registration and transfer of the Right
Certificates issued hereunder. Such books will show the names
and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right
Certificates.
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. (a) Subject to the provisions of Sections 7(d)
and 14, at any time after the Close of Business on the
Distribution Date and prior to the Expiration Date, any Right
Certificate or Right Certificates representing exercisable
Rights may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-
hundredths of a Preferred Share (or other securities, as the
case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any such Right
Certificate or Rights Certificates must make such request in a
writing delivered to the Rights Agent and must surrender the
Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on
the reverse side of such Right Certificate and shall have
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Thereupon or as promptly as practicable thereafter, subject to
the provisions of Sections 7(d) and 14, the Company will
prepare, execute and deliver to the Rights Agent, and the Rights
Agent will countersign and deliver, a Right Certificate or Right
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 Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will prepare, execute and deliver a new
Right Certificate of like tenor to the Rights Agent and the
Rights Agent will countersign and deliver such new Right
Certificate to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date and prior to the Expiration Date, upon
surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the
Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment in cash, in
lawful money of the United States of America by certified check
or bank draft payable to the order of the Company, equal to the
sum of (i) the exercise price for the total number of securities
as to which such surrendered Rights are exercised and (ii) an
amount equal to any applicable transfer tax required to be paid
by the holder of such Right Certificate in accordance with the
provisions of Section 9(c).
(b) Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to purchase duly
executed, accompanied by payment as described above, the Rights
Agent will promptly (i) requisition from any transfer agent of
the Preferred Shares (or make available, if the Rights Agent is
the transfer agent) certificates representing the number of one
one-hundredths of a Preferred Share to be purchased (and the
Company hereby irrevocably authorizes and directs its transfer
agent to comply with all such requests), or, if the Company
elects to deposit Preferred Shares 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 Preferred Share as are to be purchased
(and the Company hereby irrevocably authorizes and directs such
depositary agent to comply with all such requests), (ii) after
receipt of such certificates (or depositary receipts, as the
case may be), cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such
holder, (iii) when appropriate, requisition from the Company or
any transfer agent therefor (or make available, if the Rights
Agent is the transfer agent) certificates representing the
number of equivalent common shares to be issued in lieu of the
issuance of Common Shares in accordance with the provisions of
Section 11(a)(iii), (iv) when appropriate, after receipt of such
certificates, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such
holder, (v) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with the provisions of Section 14 or in
lieu of the issuance of Common Shares in accordance with the
provisions of Section 11(a)(iii), (vi) when appropriate, after
receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate, and (vii) when
appropriate, deliver any due xxxx or other instrument provided
to the Rights Agent by the Company for delivery to the
registered holder of such Right Certificate as provided by
Section 11(l).
(c) In case the registered holder of any Right Certificate
exercises less than all the Rights evidenced thereby, the
Company will prepare, execute and deliver a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised and the Rights Agent will countersign and deliver
such new Right Certificate to the registered holder of such
Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company will be
obligated to undertake any action with respect to any purported
transfer, split up, combination or exchange of any Right
Certificate pursuant to Section 6 or exercise of a Right
Certificate as set forth in this Section 7 unless the registered
holder of such Right Certificate has (i) completed and signed
the certificate following the form of assignment or the form of
election to purchase, as applicable, set forth on the reverse
side of the Right Certificate surrendered for such transfer,
split up, combination, exchange or 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 may reasonably request.
8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange will, if surrendered
to the Company or to any of its stock transfer agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, will be canceled
by it, and no Right Certificates will be issued in lieu thereof
except as expressly permitted by the provisions of this
Agreement. The Company will deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent will so cancel
and retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The
Rights Agent will deliver all canceled Right Certificates to the
Company, or will, at the written request of the Company, destroy
such canceled Right Certificates, and in such case will deliver
a certificate of destruction thereof to the Company.
9. Company Covenants Concerning Securities and Rights.
The Company covenants and agrees that:
(a) It will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred
Shares held in its treasury, a number of Preferred Shares that
will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7.
(b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other
securities) issuable upon the exercise of the Rights may be
listed on a national securities exchange, or quoted on NASDAQ,
it will endeavor to cause, from and after such time as the
Rights become exercisable, all securities reserved for issuance
upon the exercise of Rights to be listed on such exchange, or
quoted on NASDAQ, upon official notice of issuance upon such
exercise.
(c) It will take all such action as may be necessary to
ensure that all Preferred Shares (and, following the occurrence
of a Triggering Event, Common Shares and/or other securities)
delivered upon exercise of Rights, at the time of delivery of
the certificates for such securities, will be (subject to
payment of the Purchase Price) duly authorized, validly issued,
fully paid and nonassessable securities.
(d) 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 Right Certificates
and of any certificates representing securities issued upon the
exercise of Rights; provided, however, that the Company will not
be required to pay any transfer tax or charge which may be
payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery
of certificates or depositary receipts representing securities
issued upon the exercise of Rights in a name other than that of,
the registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any
certificates or depositary receipts representing securities
issued upon the exercise of any Rights until any such tax or
charge has been paid (any such tax or charge being payable by
the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
(e) It will use its best efforts (i) to file on an
appropriate form, as soon as practicable following the later of
the Share Acquisition Date and the Distribution Date, a
registration statement under the Securities Act with respect to
the securities issuable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such
registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date.
The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue
sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily
suspend, for a period of time after the date set forth in clause
(i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such
registration statement and to permit it to become effective.
Upon any such suspension, the Company will 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 determines that a registration
statement should be filed under the Securities Act or any state
securities laws following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights in each
relevant jurisdiction until such time as a registration
statement has been declared effective and, upon any such
suspension, the Company will issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding anything in
this Agreement to the contrary, the Rights will not be
exercisable in any jurisdiction if the requisite registration or
qualification in such jurisdiction has not been effected or the
exercise of the Rights is not permitted under applicable law.
(f) Notwithstanding anything in this Agreement to the
contrary, after the later of the Share Acquisition Date and the
Distribution Date it will not 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 eliminate or
otherwise diminish the benefits intended to be afforded by the
Rights.
(g) In the event that the Company is obligated to issue
other securities of the Company and/or pay cash pursuant to
Sections 11, 13, 14 or 24 it will make all arrangements
necessary so that such other securities and/or cash are
available for distribution by the Rights Agent, if and when
appropriate.
10. Record Date. Each Person in whose name any
certificate representing Preferred Shares (or Common Shares
and/or other securities, as the case may be) is issued upon the
exercise of Rights will for all purposes be deemed to have
become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented
thereby on, and such certificate will be dated, the date upon
which the Right 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
transfer books of the Company for the Preferred Shares (or
Common Shares and/or other securities, as the case may be) are
closed, such Person will be deemed to have become the record
holder of such securities on, and such certificate will be
dated, the next succeeding Business Day on which the transfer
books of the Company for the Preferred Shares (or Common Shares
and/or other securities, as the case may be) are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a
Right Certificate will not be entitled to any rights of a holder
of any security for which the Rights are or may become
exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions, or to exercise any
preemptive rights, and will not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
11. Adjustment of Purchase Price, Number and Kind of
Securities or Number of Rights. The Purchase Price, the number
and kind of securities issuable upon exercise of each Right and
the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event that the Company at any time after
the Record Date (A) declares a dividend on the Preferred
Shares payable in Preferred Shares, (B) subdivides the
outstanding Preferred Shares, (C) combines the outstanding
Preferred Shares into a smaller number of Preferred Shares,
or (D) issues any shares of its capital stock in a
reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of
such subdivision, combination or reclassification and/or
the number and/or kind of shares of capital stock issuable
on such date upon exercise of a Right, will be
proportionately adjusted so that the holder of any Right
exercised after such time is entitled to receive upon
payment of the Purchase Price then in effect the aggregate
number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and
at a time when the transfer books of the Company for the
Preferred Shares were open, the holder of such Right would
have owned upon such exercise (and, in the case of a
reclassification, would have retained after giving effect
to such reclassification) and would have been entitled to
receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in
no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value
of the shares of capital stock issuable upon exercise of
one Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii) or Section 13, the adjustment provided for in
this Section 11(a)(i) will be in addition to, and will be
made prior to, any adjustment required pursuant to Section
11(a)(ii) or Section 13.
(ii) Subject to the provisions of Section 24, upon the
later of the Distribution Date or the occurrence of any of
the following events:
(A) any Person becomes an Acquiring Person; or
(B) any Acquiring Person or any Affiliate or
Associate of any Acquiring Person, directly or indirectly,
(1) merges into the Company or otherwise combines with the
Company and the Company is the continuing or surviving
corporation of such merger or combination (other than in a
transaction subject to Section 13), (2) merges or otherwise
combines with any Subsidiary of the Company, (3) in one or
more transactions (otherwise than in connection with the
exercise, exchange or conversion of securities exercisable
or exchangeable for or convertible into shares of any class
of capital stock of the Company or any of its Subsidiaries)
transfers cash, securities or any other property to the
Company or any of its Subsidiaries in exchange (in whole or
in part) for shares of any class of capital stock of the
Company or any of its Subsidiaries or for securities
exercisable or exchangeable for or convertible into shares
of any class of capital stock of the Company or any of its
Subsidiaries, or otherwise obtains from the Company or any
of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the
Company or any of its Subsidiaries or securities
exercisable or exchangeable for or convertible into shares
of any class of capital stock of the Company or any of its
Subsidiaries (otherwise than as part of a pro rata
distribution to all holders of shares of any class of
capital stock of the Company, or any of its Subsidiaries),
(4) sells, purchases, leases, exchanges, mortgages,
pledges, transfers or otherwise disposes (in one or more
transactions) to, from, with or of, as the case may be, the
Company or any of its Subsidiaries (otherwise than in a
transaction subject to Section 13), any property, including
securities, on terms and conditions less favorable to the
Company than the Company would be able to obtain in an
arm's-length transaction with an unaffiliated third party,
(5) receives any compensation from the Company or any of
its Subsidiaries other than compensation as a director or a
regular full-time employee, in either case at rates
consistent with the Company's (or its Subsidiaries') past
practices, or (6) receives the benefit, directly or
indirectly (except proportionately as a stockholder), of
any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantage
provided by the Company or any of its Subsidiaries; or
(C) during such time as there is an Acquiring Person,
there is any reclassification of securities of the Company
(including any reverse stock split), or any
recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries,
or any other transaction or series of transactions
involving the Company or any of its Subsidiaries (whether
or not with or into or otherwise involving an Acquiring
Person), other than a transaction subject to Section 13,
which has the effect, directly or indirectly, of increasing
by more than 1% the proportionate share of the outstanding
shares of any class of equity securities of the Company or
any of its Subsidiaries, or of securities exercisable or
exchangeable for or convertible into equity securities of
the Company or any of its Subsidiaries, of which an
Acquiring Person, or any Affiliate or Associate of any
Acquiring Person, is the Beneficial Owner;
then, and in each such case, proper provision will be made
so that each holder of a Right, except as provided below,
will thereafter have the right to receive, upon exercise
thereof in accordance with the terms of this Agreement at
an exercise price per Right equal to the product of the
then-current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the date of the occurrence
of such Flip-in Event (or, if any other Flip-in Event shall
have previously occurred, the product of the then-current
Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the date of the first
occurrence of a Flip-in Event), in lieu of Preferred
Shares, such number of Common Shares as equals the result
obtained by (x) multiplying the then-current Purchase Price
by the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to the
date of the occurrence of such Flip-in Event (or, if any
other Flip-in Event shall have previously occurred,
multiplying the then-current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the date of the
first occurrence of a Flip-in Event), and dividing that
product by (y) 50% of the current per share market price of
the Common Shares (determined pursuant to Section 11(d)) on
the date of the occurrence of such Flip-in Event.
Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Flip-in Event, any
Rights that are Beneficially Owned by (A) any Acquiring
Person (or any Affiliate or Associate of any Acquiring
Person), (B) a transferee of any Acquiring Person (or any
such Affiliate or Associate) who becomes a transferee after
the occurrence of a Flip-in Event, or (C) a transferee of
any Acquiring Person (or any such Affiliate or Associate)
who became a transferee prior to or concurrently with the
occurrence of a Flip-in Event pursuant to either (1) a
transfer from an Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the
transferred Rights or (2) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has the purpose or
effect of avoiding the provisions of this Section
11(a)(ii), and subsequent transferees of any of such
Persons, will be void without any further action and any
holder of such Rights will thereafter have no rights
whatsoever with respect to such Rights under any provision
of this Agreement. The Company will use all reasonable
efforts to ensure that the provisions of this Section
11(a)(ii) are complied with, but will have no liability to
any holder of Right Certificates or any 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. Upon the occurrence
of a Flip-in Event, no Right Certificate that represents
Rights that are or have become void pursuant to the
provisions of this Section 11(a)(ii) will thereafter be
issued pursuant to Section 3 or Section 6, and any Right
Certificate delivered to the Rights Agent that represents
Rights that are or have become void pursuant to the
provisions of this Section 11(a)(ii) will be canceled.
Upon the occurrence of a Flip-over Event, any Rights that
shall not have been previously exercised pursuant to this
Section 11(a)(ii) shall thereafter be exercisable only
pursuant to Section 13 and not pursuant to this Section
11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if there
are not sufficient Common Shares authorized but unissued or
issued but not outstanding to permit the issuance of all
the Common Shares issuable in accordance with Section
11(a)(ii) upon the exercise of a Right, the Board of
Directors of the Company will use its best efforts promptly
to authorize and, subject to the provisions of Section
9(e), make available for issuance additional Common Shares
or other equity securities of the Company having equivalent
voting rights and an equivalent value (as determined in
good faith by the Board of Directors of the Company) to the
Common Shares (for purposes of this Section 11(a)(iii),
"equivalent common shares"). In the event that equivalent
common shares are so authorized, upon the exercise of a
Right in accordance with the provisions of Section 7, the
registered holder will be entitled to receive (A) Common
Shares, to the extent any are available, and (B) a number
of equivalent common shares, which the Board of Directors
of the Company has determined in good faith to have a value
equivalent to the excess of (x) the aggregate current per
share market value on the date of the occurrence of the
most recent Flip-in Event of all the Common Shares issuable
in accordance with Section 11(a)(ii) upon the exercise of a
Right (the "Exercise Value") over (y) the aggregate current
per share market value on the date of the occurrence of the
most recent Flip-in Event of any Common Shares available
for issuance upon the exercise of such Right; provided,
however, that if at any time after 90 calendar days after
the latest of the Share Acquisition Date, the Distribution
Date and the date of the occurrence of the most recent
Flip-in Event, there are not sufficient Common Shares
and/or equivalent common shares available for issuance upon
the exercise of a Right, then the Company will be obligated
to deliver, upon the surrender of such Right and without
requiring payment of the Purchase Price, Common Shares (to
the extent available), equivalent common shares (to the
extent available) and then cash (to the extent permitted by
applicable law and any agreements or instruments to which
the Company is a party in effect immediately prior to the
Share Acquisition Date), which securities and cash have an
aggregate value equal to the excess of (1) the Exercise
Value over (2) the product of the then-current Purchase
Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable
immediately prior to the date of the occurrence of the most
recent Flip-in Event (or, if any other Flip-in Event shall
have previously occurred, the product of the then-current
Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right would
have been exercisable immediately prior to the date of the
occurrence of such Flip-in Event if no other Flip-in Event
had previously occurred). To the extent that any legal or
contractual restrictions prevent the Company from paying
the full amount of cash payable in accordance with the
foregoing sentence, the Company will pay to holders of the
Rights as to which such payments are being made all amounts
which are not then restricted on a pro rata basis and will
continue to make payments on a pro rata basis as promptly
as funds become available until the full amount due to each
such Rights holder has been paid.
(b) In the event that the Company fixes a record date for
the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preferred Shares (or securities having equivalent
rights, privileges and preferences as the Preferred Shares (for
purposes of this Section 11(b), "equivalent preferred shares"))
or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent
preferred shares) less than the current per share market price
of the Preferred Shares (determined pursuant to Section 11(d))
on such record date, the Purchase Price to be in effect after
such record date will be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a
fraction, the numerator of which is the number of Preferred
Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total
number of Preferred Shares and/or equivalent preferred shares so
to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at
such current per share market price and the denominator of which
is the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of
capital stock issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of
which is in a form other than cash, the value of such
consideration will be as determined in good faith by the Board
of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent. Preferred
Shares owned by or held for the account of the Company will not
be deemed outstanding for the purpose of any such computation.
Such adjustment will be made successively whenever such a record
date is fixed, and in the event that such rights, options or
warrants are not so issued, the Purchase Price will be adjusted
to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In the event that the Company fixes a record date for
the making of a distribution to all holders of Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash
(other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or
subscription rights, options or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in
effect after such record date will be determined by multiplying
the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which is the current per
share market price of the Preferred Shares (as determined
pursuant to Section 11(d)) on such record date or, if earlier,
the date on which Preferred Shares begin to trade on an
ex-dividend or when issued basis for such distribution, less the
fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination will be described
in a statement filed with the Rights Agent) of the portion of
the evidences of indebtedness, cash, assets or stock so to be
distributed or of such subscription rights, options or warrants
applicable to one Preferred Share, and the denominator of which
is such current per share market price of the Preferred Shares;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock issuable upon
exercise of one Right. Such adjustments will be made
successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price
will again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of Common Shares on any
date will be deemed to be the average of the daily closing
prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current per
share market price of the Common Shares is determined
during a period following the announcement by the issuer of
such Common Shares of (A) a dividend or distribution on
such Common Shares payable in such Common Shares or
securities convertible into such Common Shares (other than
the Rights) or (B) any subdivision, combination or
reclassification of such Common Shares, and prior to the
expiration of 30 Trading Days after the ex-dividend date
for such dividend or distribution, or the record date for
such subdivision, combination or reclassification, then,
and in each such case, the current per share market price
will be appropriately adjusted to take into account
ex-dividend trading or to reflect the current per share
market price per Common Share equivalent. The closing
price for each day will be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock
Exchange or, if the Common Shares are not listed or
admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction
reporting system with respect to securities listed on the
principal national securities exchange on which the Common
Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any
national securities exchange, the last quoted 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 Common Shares are not quoted by any such
organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Common Shares selected by the Board of
Directors of the Company. If the Common Shares are not
publicly held or not so listed or traded, or are not the
subject of available bid and asked quotes, "current per
share market price" will mean the fair value per share as
determined in good faith by the Board of Directors of the
Company, whose determination will be described in a
statement filed with the Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares
will be determined in the same manner as set forth above
for Common Shares in Section 11(d)(i), other than the last
sentence thereof. If the current per share market price of
the Preferred Shares cannot be determined in the manner
provided above, the "current per share market price" of the
Preferred Shares will be conclusively deemed to be an
amount equal to the current per share market price of the
Common Shares multiplied by one hundred (as such number may
be appropriately adjusted to reflect events such as stock
splits, stock dividends, recapitalizations or similar
transactions relating to the Common Shares occurring after
the date of this Agreement). If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or
traded, or the subject of available bid and asked quotes,
"current per share market price" of the Preferred Shares
will mean the fair value per share as determined in good
faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with
the Rights Agent. For all purposes of this Agreement, the
current per share market price of one one-hundredth of a
Preferred Share will be equal to the current per share
market price of one Preferred Share divided by one hundred.
(e) Except as set forth below, no adjustment in the
Purchase Price will be required unless such adjustment would
require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made will be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 will be made to the
nearest cent or to the nearest one one-millionth of a Preferred
Share or one ten-thousandth of a Common Share or other security,
as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 will
be made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment and (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised
becomes entitled to receive any securities of the Company other
than Preferred Shares, thereafter the number and/or kind of such
other securities so receivable upon exercise of any Right
(and/or the Purchase Price in respect thereof) will be subject
to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect
to the Preferred Shares (and the Purchase Price in respect
thereof) contained in this Section 11, and the provisions of
Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Shares (and the Purchase Price in respect thereof) will apply on
like terms to any such other securities (and the Purchase Price
in respect thereof).
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder will
evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-hundredths of a Preferred Share issuable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price pursuant to Section 11(b) or Section 11(c), each Right
outstanding immediately prior to the making of such adjustment
will thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred
Share (calculated to the nearest one one-millionth of a
Preferred Share) obtained by (i) multiplying (x) the number of
one one-hundredths of a Preferred Share issuable upon exercise
of a Right immediately prior to such adjustment of the Purchase
Price by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights
in substitution for any adjustment in the number of one one-
hundredths of a Preferred Share issuable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of
the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
will become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by
the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company will 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. Such record date may be
the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued,
will be at least 10 calendar days later than the date of the
public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company will, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing,
subject to the provisions of Section 14, the additional Rights
to which such holders are entitled as a result of such
adjustment, or, at the option of the Company, will cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if
required by the Company, new Right Certificates evidencing all
the Rights to which such holders are entitled after such
adjustment. Right Certificates so to be distributed will 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 will be registered in the names of the
holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Without respect to any adjustment or change in the
Purchase Price and/or the number and/or kind of securities
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the
Purchase Price and the number and kind of securities which were
expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth
of the then par value, if any, of the Preferred Shares or below
the then par value, if any, of any other securities of the
Company issuable upon exercise of the Rights, the Company will
take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Preferred Shares or
such other securities, as the case may be, at such adjusted
Purchase Price.
(l) In any case in which this Section 11 otherwise
requires 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 Preferred Shares or other securities of the
Company, if any, issuable upon such exercise over and above the
number of Preferred Shares or other securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however,
that the Company delivers to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive
such additional Preferred Shares or other securities upon the
occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the
contrary, the Company will 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 its good faith judgment the Board of Directors of the Company
determines to be advisable in order that any (i) consolidation
or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of Preferred Shares at less than the current per share
market price therefor, (iii) issuance wholly for cash of
Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (iv)
stock dividends, or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Shares is not taxable to such
stockholders.
(n) Notwithstanding anything in this Agreement to the
contrary, in the event that the Company at any time after the
Record Date and prior to the Distribution Date (i) pays a
dividend on the outstanding Common Shares payable in Common
Shares, (ii) subdivides the outstanding Common Shares, (iii)
combines the outstanding Common Shares into a smaller number of
shares, or (iv) issues any shares of its capital stock in a
reclassification of the outstanding Common Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each Common
Share then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, will be proportionately adjusted
so that the number of Rights thereafter associated with each
Common Share following any such event equals the result obtained
by multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction the
numerator of which is the total number of Common Shares
outstanding immediately prior to the occurrence of the event and
the denominator of which is the total number of Common Shares
outstanding immediately following the occurrence of such event.
The adjustments provided for in this Section 11(n) will be made
successively whenever such a dividend is paid or such a
subdivision, combination or reclassification is effected.
12. Certificate of Adjusted Purchase Price or Number of
Securities. Whenever an adjustment is made as provided in
Section 11 or Section 13, the Company will promptly (a) prepare
a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) file
with the Rights Agent and with each transfer agent for the
Preferred Shares and the Common Shares a copy of such
certificate, and (c) if such adjustment is made after the
Distribution Date, mail a brief summary of such adjustment to
each holder of a Right Certificate in accordance with Section
26.
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that:
(i) at any time after a Person has become an
Acquiring Person, the Company consolidates with, or merges
with or into, any other Person and the Company is not the
continuing or surviving corporation of such consolidation
or merger; or
(ii) at any time after a Person has become an
Acquiring Person, any Person consolidates with the Company,
or merges with or into the Company, and the Company is the
continuing or surviving corporation of such merger or
consolidation and, in connection with such merger or
consolidation, all or part of the Common Shares is changed
into or exchanged for stock or other securities of any
other Person or cash or any other property; or
(iii) at any time after a Person has become an
Acquiring Person, the Company, directly or indirectly,
sells or otherwise transfers (or one or more of its
Subsidiaries sells or otherwise transfers), in one or more
transactions, assets or earning power (including without
limitation securities creating any obligation on the part
of the Company and/or any of its Subsidiaries) representing
in the aggregate more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons other than the Company or
one or more of its wholly owned Subsidiaries;
then, and in each such case, proper provision will be made so
that from and after the latest of the Share Acquisition Date,
the Distribution Date and the date of the occurrence of such
Flip-over Event (A) each holder of a Right thereafter has the
right to receive, upon the exercise thereof in accordance with
the terms of this Agreement at an exercise price per Right equal
to the product of the then-current Purchase Price multiplied by
the number of one one-hundredths of a Preferred Share for which
a Right was exercisable immediately prior to the Share
Acquisition Date, such number of duly authorized, validly
issued, fully paid, nonassessable and freely tradable Common
Shares of the Issuer, free and clear of any liens, encumbrances
and other adverse claims and not subject to any rights of call
or first refusal, as equals the result obtained by (x)
multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is
exercisable immediately prior to the Share Acquisition Date and
dividing that product by (y) 50% of the current per share market
price of the Common Shares of the Issuer (determined pursuant to
Section 11(d)), on the date of the occurrence of such Flip-over
Event; (B) the Issuer will thereafter be liable for, and will
assume, by virtue of the occurrence of such Flip-over Event, all
the obligations and duties of the Company pursuant to this
Agreement; (C) the term "Company" will thereafter be deemed to
refer to the Issuer; and (D) the Issuer will take such steps
(including without limitation the reservation of a sufficient
number of its Common Shares to permit the exercise of all
outstanding Rights) in connection with such consummation as may
be necessary to assure that the provisions hereof are thereafter
applicable, as nearly as reasonably may be possible, in relation
to its Common Shares thereafter deliverable upon the exercise of
the Rights.
(b) For purposes of this Section 13, "Issuer" means (i) in
the case of any Flip-over Event described in Sections 13(a)(i)
or (ii) above, the Person that is the continuing, surviving,
resulting or acquiring Person (including the Company as the
continuing or surviving corporation of a transaction described
in Section 13(a)(ii) above), and (ii) in the case of any
Flip-over Event described in Section 13(a)(iii) above, the
Person that is the party receiving the greatest portion of the
assets or earning power (including without limitation securities
creating any obligation on the part of the Company and/or any of
its Subsidiaries) transferred pursuant to such transaction or
transactions; provided, however, that, in any such case, (A) if
(1) no class of equity security of such Person is, at the time
of such merger, consolidation or transaction and has been
continuously over the preceding 12-month period, registered
pursuant to Section 12 of the Exchange Act, and (2) such Person
is a Subsidiary, directly or indirectly, of another Person, a
class of equity security of which is and has been so registered,
the term "Issuer" means such other Person; and (B) in case such
Person is a Subsidiary, directly or indirectly, of more than one
Person, a class of equity security of two or more of which are
and have been so registered, the term "Issuer" means whichever
of such Persons is the issuer of the equity security having the
greatest aggregate market value. Notwithstanding the foregoing,
if the Issuer in any of the Flip-over Events listed above is not
a corporation or other legal entity having outstanding equity
securities, then, and in each such case, (x) if the Issuer is
directly or indirectly wholly owned by a corporation or other
legal entity having outstanding equity securities, then all
references to Common Shares of the Issuer will be deemed to be
references to the Common Shares of the corporation or other
legal entity having outstanding equity securities which
ultimately controls the Issuer, and (y) if there is no such
corporation or other legal entity having outstanding equity
securities, (I) proper provision will be made so that the Issuer
creates or otherwise makes available for purposes of the
exercise of the Rights in accordance with the terms of this
Agreement, a kind or kinds of security or securities having a
fair market value at least equal to the economic value of the
Common Shares which each holder of a Right would have been
entitled to receive if the Issuer had been a corporation or
other legal entity having outstanding equity securities; and
(II) all other provisions of this Agreement will apply to the
issuer of such securities as if such securities were Common
Shares.
(c) The Company will not consummate any Flip-over Event
if, (i) at the time of or immediately after such Flip-over
Event, there are or would be any rights, warrants, instruments
or securities outstanding or any agreements or arrangements in
effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Flip-over Event,
the stockholders of the Person who constitutes, or would
constitute, the Issuer for purposes of Section 13(a) shall have
received a distribution of Rights previously owned by such
Person or any of its Affiliates or Associates, or (iii) the form
or nature of the organization of the Issuer would preclude or
limit the exercisability of the Rights. In addition, the
Company will not consummate any Flip-over Event unless the
Issuer has a sufficient number of authorized Common Shares (or
other securities as contemplated in Section 13(b) above) which
have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section
13 and unless prior to such consummation the Company and the
Issuer have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in
subsections (a) and (b) of this Section 13 and further providing
that as promptly as practicable after the consummation of any
Flip-over Event, the Issuer will:
(A) prepare and file a registration statement under
the Securities Act with respect to the Rights and the
securities issuable upon exercise of the Rights on an
appropriate form, and use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;
(B) take all 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; and
(C) deliver to holders of the Rights historical
financial statements for the Issuer and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
(d) The provisions of this Section 13 will similarly apply
to successive mergers or consolidations or sales or other
transfers. In the event that a Flip-over Event occurs at any
time after the occurrence of a Flip-in Event, except for Rights
that have become void pursuant to Section 11(a)(ii), Rights that
shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will
thereafter be exercisable in the manner provided in
Section 13(a).
14. Fractional Rights and Fractional Securities.
(a) The Company will not be required to issue fractions of
Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, the
Company will pay as promptly as practicable to the registered
holders of the Right Certificates with regard to which such
fractional Rights otherwise would be issuable, an amount in cash
equal to the same fraction of the current market value of one
Right. For the purposes of this Section 14(a), the current
market value of one Right is the closing price of the Rights for
the Trading Day immediately prior to the date on which such
fractional Rights otherwise would have been issuable. The
closing price for any day is the last sale price, regular way,
or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use, or, if on any such date
the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board of Directors of the Company. If the Rights are not
publicly held or are not so listed or traded, or are not the
subject of available bid and asked quotes, the current market
value of one Right will mean the fair value thereof as
determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement
filed with the Rights Agent.
(b) The Company will not be required to issue fractions of
Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of
one one-hundredth of a Preferred Share may, at the election of
the Company, be evidenced by depositary receipts pursuant to an
appropriate agreement between the Company and a depositary
selected by it, provided that such agreement provides that the
holders of such depositary receipts have all the rights,
privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a
Preferred Share, the Company may pay to any Person to whom or
which such fractional Preferred Shares would otherwise be
issuable an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For purposes of
this Section 14(b), the current market value of one Preferred
Share is the closing price of the Preferred Shares (as
determined in the same manner as set forth for Common Shares in
the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise; provided,
however, that if the closing price of the Preferred Shares
cannot be so determined, the closing price of the Preferred
Shares for such Trading Day will be conclusively deemed to be an
amount equal to the closing price of the Common Shares
(determined pursuant to the second sentence of Section 11(d)(i))
for such Trading Day multiplied by one hundred (as such number
may be appropriately adjusted to reflect events such as stock
splits, stock dividends, recapitalizations or similar
transactions relating to the Common Shares occurring after the
date of this Agreement); provided further, however, that if
neither the Common Shares nor the Preferred Shares are publicly
held or listed or admitted to trading on any national securities
exchange, or the subject of available bid and asked quotes, the
current market value of one Preferred Share will mean the fair
value thereof as determined in good faith by the Board of
Directors of the Company, whose determination will be described
in a statement filed with the Rights Agent.
(c) Following the occurrence of a Triggering Event, the
Company will not be required to issue fractions of Common Shares
or other securities issuable upon exercise or exchange of the
Rights or to distribute certificates which evidence any such
fractional securities. In lieu of issuing any such fractional
securities, the Company may pay to any Person to whom or which
such fractional securities would otherwise be issuable an amount
in cash equal to the same fraction of the current market value
of one such security. For purposes of this Section 14(c), the
current market value of one Common Share or other security
issuable upon the exercise or exchange of Rights is the closing
price thereof (as determined in the same manner as set forth for
Common Shares in the second sentence of Section 11(d)(i)) for
the Trading Day immediately prior to the date of such exercise
or exchange; provided, however, that if neither the Common
Shares nor any such other securities are publicly held or listed
or admitted to trading on any national securities exchange, or
the subject of available bid and asked quotes, the current
market value of one Common Share or such other security will
mean the fair value thereof as determined in good faith by the
Board of Directors of the Company, whose determination will mean
the fair value thereof as will be described in a statement filed
with the Rights Agent.
15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the
Rights Agent under Section 18, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the
consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the holder
of any Common Shares), may in his own behalf and for his own
benefit enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the
obligations under this Agreement, and injunctive relief against
actual or threatened violations of the obligations of any Person
subject to this Agreement.
16. Agreement of Rights Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights are
transferable only in connection with the transfer of the Common
Shares;
(b) After the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent
if surrendered at the principal office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Share
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent will be affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or
exchange of a Right, except as otherwise provided in Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent will 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, that the Company will use
its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate will be entitled to
vote, receive dividends, or be deemed for any purpose the holder
of Preferred Shares or any other securities of the Company which
may at any time be issuable upon the exercise of the Rights
represented thereby, nor will anything contained herein or in
any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of Directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions of this
Agreement or exchanged pursuant to the provisions of Section 24.
18. Concerning the Rights Agent.
(a) The Company will pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company
will also indemnify the Rights Agent for, and hold it harmless
against, any loss, liability, suit, action, proceeding or
expense, incurred without negligence, bad faith, or willful
misconduct on the part of the Rights Agent, for anything done or
omitted to be done 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
arising therefrom, directly or indirectly. The indemnity
provided for herein shall survive the expiration of the Rights,
the termination of this Agreement, and the resignation or
removal of the Rights Agent. The costs and expenses of
enforcing this right of indemnification shall also be paid by
the Company.
(b) The Rights Agent will be protected and will incur no
liability for or in respect of any action taken, suffered, or
omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate
evidencing Preferred Shares or Common Shares or 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.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if
the Rights Agent has been advised of the likelihood of such loss
or damage and regardless of the form of the action.
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 is a party, or any corporation succeeding to the corporate
trust business of the Rights Agent or any successor Rights
Agent, will be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21. If
at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Right Certificates shall
have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so
countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of
the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates will
have the full force provided in the Right Certificates and in
this Agreement.
(b) If at any time the name of the Rights Agent changes
and at such time any of the Right Certificates have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right
Certificates so countersigned; and if at that time any of the
Right Certificates have not been countersigned, the Rights Agent
may countersign such Right Certificates either in its prior name
or in its changed name; and in all such cases such Right
Certificates will have the full force provided in the Right
Certificates and in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the
following terms and conditions (and no implied duties or
obligations, except the duty of good faith, shall be read into
this Agreement against the Rights Agent), by all of which the
Company and the holders of Right Certificates, by their
acceptance thereof, will be bound:
(a) Before the Rights Agent acts or refrains from acting,
the Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel
will 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 deems it necessary or desirable that
any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman
of the Board, the President, any Vice President, the Secretary
or the Treasurer of the Company and delivered to the Rights
Agent, and such certificate will 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 will be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have
been made by the Company only.
(e) The Rights Agent will not be under any responsibility
in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution and delivery
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature
thereof); nor will it be responsible for any breach by the
Company of any covenant contained in this Agreement or in any
Right Certificate; nor will it be responsible for any adjustment
required under the provisions of Sections 11 or 13 (including
any adjustment which results in Rights becoming void) 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 Right Certificates after actual
notice of any such adjustment); nor will it by any act hereunder
be deemed to make any representation or warranty as to the
authorization or reservation of any shares of stock or other
securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of stock or other
securities will, when issued, be duly authorized, validly
issued, fully paid and nonassessable.
(f) The Company will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its
duties hereunder from any person believed in good faith by the
Rights Agent to be one of the Chairman of the Board, the
President, any Vice President, the Secretary or the Treasurer of
the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be
liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer
or for any delay in acting while waiting for such instructions.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein will preclude
the Rights Agent from acting in any other capacity for the
Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent will 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 reasonable care was exercised in the selection and
continued employment thereof. The Rights Agent will not be
under any duty or responsibility to ensure compliance with any
applicable federal or state securities laws in connection with
the issuance, transfer or exchange of Right Certificates.
(j) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise, transfer, split up,
combination or exchange, either (i) 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 or 2 thereof, or (ii) any other
actual or suspected irregularity exists, the Rights Agent will
not take any further action with respect to such requested
exercise, transfer, split up, combination or exchange without
first consulting with the Company, and will thereafter take
further action with respect thereto only in accordance with the
Company's written instructions.
(k) 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.
21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 calendar days' notice in
writing mailed to the Company and to each transfer agent of the
Preferred Shares or the Common Shares by registered or certified
mail, and, at the expense of the Company, to the holders of the
Right Certificates by first class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 calendar
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 Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Right Certificates by
first class mail. If the Rights Agent resigns or is removed or
otherwise becomes incapable of acting, the Company will appoint
a successor to the Rights Agent. If the Company fails to make
such appointment within a period of 30 calendar days after
giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who will, with such notice, submit his Right
Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, will be a corporation or other legal
entity organized and doing business under the laws of the United
States or of the State of New York (or of any other state of the
United States so long as such corporation is authorized to do
business as a banking institution in the State of New York), in
good standing, having a principal office in the State of New
York, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the
successor Rights Agent will 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 will 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
will file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Preferred Shares or the
Common Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, will 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.
22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved
by its Board of Directors to reflect any adjustment or change in
the Purchase Price per share and the number or kind of
securities issuable upon exercise of the Rights made in
accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale by the Company of Common
Shares following the Distribution Date and prior to the
Expiration Date, the Company (a) will, with respect to Common
Shares so issued or sold pursuant to the exercise, exchange or
conversion of securities (other than Rights) issued prior to the
Distribution Date which are exercisable or exchangeable for, or
convertible into Common Shares, and (b) may, in any other case,
if deemed necessary, appropriate or desirable by the Board of
Directors of the Company, issue Right Certificates representing
an equivalent number of Rights as would have been issued in
respect of such Common Shares if they had been issued or sold
prior to the Distribution Date, as appropriately adjusted as
provided herein as if they had been so issued or sold; provided,
however, that (i) no such Right Certificate will be issued if,
and to the extent that, in its good faith judgment the Board of
Directors of the Company determines that the issuance of such
Right Certificate could have a material adverse tax consequence
to the Company or to the Person to whom or which such Right
Certificate otherwise would be issued and (ii) no such Right
Certificate will be issued if, and to the extent that,
appropriate adjustment otherwise has been made in lieu of the
issuance thereof.
23. Redemption.
(a) Prior to the Expiration Date, the Board of Directors of
the Company may, at its option, redeem all but not less than all
of the then-outstanding Rights at the Redemption Price at any
time prior to the Close of Business on the later of (i) Share
Acquisition Date and (ii) the Distribution Date. Any such
redemption will be effective immediately upon the action of the
Board of Directors of the Company ordering the same, unless such
action of the Board of Directors of the Company expressly
provides that such redemption will be effective at a subsequent
time or upon the occurrence or nonoccurrence of one or more
specified events (in which case such redemption will be
effective in accordance with the provisions of such action of
the Board of Directors of the Company).
(b) Immediately upon the effectiveness of the redemption
of the Rights as provided in Section 23(a), 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 will be to receive the Redemption Price,
without interest thereon. Promptly after the effectiveness of
the redemption of the Rights as provided in Section 23(a), the
Company will publicly announce such redemption and, within 10
calendar days thereafter, will give notice of such redemption to
the holders of the then-outstanding Rights by mailing such
notice to all such holders at their last addresses as they
appear upon the registry books of the Company; provided,
however, that the failure to give, or any defect in, any such
notice will not affect the validity of the redemption of the
Rights. Any notice which is mailed in the manner herein
provided will be deemed given, whether or not the holder
receives the notice. The notice of redemption mailed to the
holders of Rights will state the method by which the payment of
the Redemption Price will be made. The Company may, at its
option, pay the Redemption Price in cash, Common Shares (based
upon the current per share market price of the Common Shares
(determined pursuant to Section 11(d)) at the time of
redemption), or any other form of consideration deemed
appropriate by the Board of Directors of the Company (based upon
the fair market value of such other consideration, determined by
the Board of Directors of the Company in good faith) or any
combination thereof. The Company may, at its option, combine
the payment of the Redemption Price with any other payment being
made concurrently to holders of Common Shares and, to the extent
that any such other payment is discretionary, may reduce the
amount thereof on account of the concurrent payment of the
Redemption Price. If legal or contractual restrictions prevent
the Company from paying the Redemption Price (in the form of
consideration deemed appropriate by the Board of Directors) at
the time of redemption, the Company will pay the Redemption
Price, without interest, promptly after such time as the Company
ceases to be so prevented from paying the Redemption Price.
(c) At any time following the Share Acquisition Date, the
Board of Directors of the Company may relinquish the right to
redeem the Rights under this Section 23 by duly adopting a
resolution to that effect. Immediately upon adoption of such
resolution, the rights of the Board of Directors of the Company
to redeem the Rights will terminate without further action and
without any notice. Promptly after adoption of such a
resolution, the Company will publicly announce such action;
provided, however, that the failure to give, or any defect in,
any such notice will not affect the validity of the action of
the Board of Directors of the Company.
24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after the Share Acquisition Date, exchange
all or part of the then-outstanding and exercisable Rights
(which will not include Rights that have become void pursuant to
the provisions of Section 11(a)(ii)) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the Record Date (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Any
such exchange will be effective immediately upon the action of
the Board of Directors of the Company ordering the same, unless
such action of the Board of Directors of the Company expressly
provides that such exchange will be effective at a subsequent
time or upon the occurrence or nonoccurrence of one or more
specified events (in which case such exchange will be effective
in accordance with the provisions of such action of the Board of
Directors of the Company). Notwithstanding the foregoing, the
Board of Directors of the Company will not be empowered to
effect such exchange at any time after any Person (other than
the Company or any Related Person), who or which, together with
all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the then-outstanding Common
Shares.
(b) Immediately upon the effectiveness of the exchange of
any Rights as provided in Section 24(a), and without any further
action and without any notice, the right to exercise such Rights
will terminate and the only right with respect to such Rights
thereafter of the holder of such Rights will be to receive that
number of Common Shares equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. Promptly after
the effectiveness of the exchange of any Rights as provided in
Section 24(a), the Company will publicly announce such exchange
and, within 10 calendar days thereafter, will give notice of
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; provided, however, that the failure to give, or any
defect in, such notice will not affect the validity of such
exchange. Any notice which is mailed in the manner herein
provided will be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange
will be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of
Section 11(a)(ii)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute for any Common Share
exchangeable for a Right (i) equivalent common shares (as such
term is used in Section 11(a)(iii)), (ii) cash, (iii) debt
securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate
value, as determined in good faith by the Board of Directors of
the Company (whose determination will be described in a
statement filed with the Rights Agent), equal to the current
market value of one Common Share (determined pursuant to Section
11(d)) on the Trading Day immediately preceding the date of the
effectiveness of the exchange pursuant to this Section 24.
25. Notice of Certain Events.
(a) If, after the Distribution Date, the Company proposes
(i) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to
the holders of Preferred Shares (other than a regular periodic
cash dividend), (ii) to offer to the holders of Preferred Shares
rights, options or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of assets or
earning power (including, without limitation, securities
creating any obligation on the part of the Company and/or any of
its Subsidiaries) representing more than 50% of the assets and
earning power of the Company and its Subsidiaries, taken as a
whole, to any other Person or Persons other than the Company or
one or more of its wholly owned Subsidiaries, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi)
to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or
reclassification of the Common Shares then, in each such case,
the Company will give to each holder of a Right Certificate, to
the extent feasible and in accordance with Section 26, a notice
of such proposed action, which specifies the record date for the
purposes of such stock dividend, distribution or offering of
rights, options or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the
date of participation therein by the holders of the Common
Shares and/or Preferred Shares, if any such date is to be fixed,
and such notice will be so given, in the case of any action
covered by clause (i) or (ii) above, at least 10 calendar days
prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and, in the case
of any such other action, at least 10 calendar days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever is the earlier.
(b) In case any Triggering Event occurs, then, in any such
case, the Company will as soon as practicable thereafter give to
the Rights Agent and each holder of a Right Certificate, in
accordance with Section 26, a notice of the occurrence of such
event, which specifies the event and the consequences of the
event to holders of Rights.
26. Notices.
(a) Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company will 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:
HON INDUSTRIES Inc.
000 Xxxx Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Corporate Secretary
(b) Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Agreement to be given or
made by the Company or by the holder of any Right Certificate to
or on the Rights Agent will be sufficiently given or made if
sent by first-class mail, postage prepaid, and the Rights Agent
recommends that any notice or demand authorized by this
Agreement to be given or made by any holder of a Rights
Certificate on the Rights Agent shall be sent or given by
registered or certified mail, and shall be deemed given or made
on receipt. The holders of Rights Certificates and the Company
agree to assume the risk of giving notice or demand on the
Rights Agent if given by any other means. Any such notice or
demand shall be addressed (until another address is filed in
writing with the Company) as follows:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Shareholder Services Division
(c) Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder
of any Right Certificate (or, if prior the Distribution Date, to
the holder of any certificate evidencing Common Shares) will 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.
27. Supplements and Amendments. Prior to the time at
which the Rights cease to be redeemable pursuant to Section 23,
and subject to the last sentence of this Section 27, the Company
may in its sole and absolute discretion, and the Rights Agent
will if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval
of any holders of Rights or Common Shares. From and after the
time at which the Rights cease to be redeemable pursuant to
Section 23, and subject to the last sentence of this Section 27,
the Company may, and the Rights Agent will if the Company so
directs, supplement or amend this Agreement without the approval
of any holders of Rights or Common Shares in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to supplement or amend the provisions
hereunder in any manner which the Company may deem desirable;
provided that no such supplement or amendment shall adversely
affect the interests of the holders of Rights as such (other
than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person), and no such supplement or amendment shall
cause the Rights again to become redeemable or cause this
Agreement again to become supplementable or amendable otherwise
than in accordance with the provisions of this sentence.
Without limiting the generality or effect of the foregoing, (i)
this Agreement may be supplemented or amended to provide for
such voting powers for the Rights and such procedures for the
exercise thereof, if any, as the Board of Directors of the
Company may determine to be appropriate and (ii) the Company may
at any time prior to such time as any Person becomes an
Acquiring Person amend this Agreement to lower the thresholds
set forth in Sections 1(a) and 1(h) hereof from 20% to not less
than the greater of (A) any percentage greater than the largest
percentage of the outstanding Common Shares then known by the
Company to be beneficially owned by any Person (other than any
Related Person) and (B) 10%. Upon the delivery of a certificate
from an 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 will execute such supplement or
amendment; provided, however, that the failure or refusal of the
Rights Agent to execute such supplement or amendment will not
affect the validity of any supplement or amendment adopted by
the Board of Directors of the Company, any of which will be
effective in accordance with the terms thereof. Notwithstanding
anything in this Agreement to the contrary, no supplement or
amendment may be made which decreases the stated Redemption
Price to an amount less than $0.01 per Right. Notwithstanding
anything in this Agreement to the contrary, no supplement or
amendment that changes the rights and duties of the Rights Agent
under this Agreement will be effective against the Rights Agent
without the execution of such supplement or amendment by the
Rights Agent.
28. Successors; Certain Covenants. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent will be binding on and inure to the
benefit of their respective successors and assigns hereunder.
29. Benefits of This Agreement. Nothing in this Agreement
will be construed to give to any Person other than the Company,
the Rights Agent, and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common
Shares) any legal or equitable right, remedy or claim under this
Agreement. This Agreement will be for the sole and exclusive
benefit of the Company, the Rights Agent, and the registered
holders of the Right Certificates (or prior to the Distribution
Date, the Common Shares).
30. Governing Law. This Agreement, each Right and each
Right Certificate issued hereunder will be deemed to be a
contract made under the internal substantive laws of the State
of Iowa and for all purposes will be governed by and construed
in accordance with the internal substantive laws of such State
applicable to contracts to be made and performed entirely within
such State, except as to the rights and obligations of the
Rights Agent, which shall be governed by and construed in
accordance with the laws of the State of Illinois.
31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated;
provided, however, that nothing contained in this Section 31
will affect the ability of the Company under the provisions of
Section 27 to supplement or amend this Agreement to replace such
invalid, void or unenforceable term, provision, covenant or
restriction with a legal, valid and enforceable term, provision,
covenant or restriction.
32. Descriptive Headings, Etc. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and will not control or affect the meaning or
construction of any of the provisions hereof. Unless otherwise
expressly provided, references herein to Articles, Sections and
Exhibits are to Articles, Sections and Exhibits of or to this
Agreement.
33. Determinations and Actions by the Board. For all
purposes of this Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the Beneficial
Owner, will 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. The Board of Directors of the Company will have
the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to
the Board of Directors of the Company 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 any determination as
to whether particular Rights shall have become void). All such
actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, any omission with
respect to any of the foregoing) which are done or made by the
Board of Directors of the Company in good faith will (x) be
final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other parties and (y) not
subject the Board of Directors of the Company to any liability
to any Person, including without limitation the Rights Agent and
the holders of the Rights.
34. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts will for
all purposes be deemed to be an original, and all such
counterparts will together constitute but one and the same
instrument.
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.
HON INDUSTRIES Inc.
By: /s/ Xxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
Vice President, General
Counsel and Secretary
XXXXXX TRUST AND SAVINGS BANK,
As Rights Agent
By: /s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Vice President
EXHIBIT A
FORM
of
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
HON INDUSTRIES Inc.
_______________________
To the Secretary of State
of the State of Iowa:
Pursuant to Section 490.602 of the Iowa Business
Corporation Act, this Corporation submits the following Articles
of Amendment for the purpose of amending and restating a series
of shares and fixing and determining their relative rights and
preferences:
1. The name of the corporation is HON INDUSTRIES
Inc. (the "Corporation").
2. The following resolution, which amends and restates an
existing series of shares and fixes and determines
their relative rights and preferences, was duly adopted by the
Board of Directors of the Corporation on August 10, 1998:
RESOLVED, that pursuant to the authority granted to
and vested in the Board of Directors of this Corporation (the
"Board of Directors" or the "Board") in accordance with the
Articles of Incorporation, the Board of Directors amends and
restates a series of Preferred Stock, par value $1.00 per share
(the "Preferred Stock"), of the Corporation and fixes and
determines the relative rights and preferences thereof as
follows:
Series A Junior Participating Preferred Stock:
1. Designation and Amount. The shares of this series
shall be designated as "Series A Junior Participating Preferred
Stock" (the "Series A Preferred Stock"), and the number of
shares constituting the Series A Preferred Stock shall be
1,000,000. 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 of Series A Preferred
Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance on
the exercise of outstanding options, rights, or warrants or on
the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
2. Dividends and Distributions.
(a) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or any similar
stock) ranking prior and superior to the Series A Preferred
Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of
Common Stock, par value $1.00 per share (the "Common
Stock"), of the Corporation and of any other junior stock,
shall be entitled to receive, when, as, and if declared by
the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the
first day of March, June, September, and December in each
year (each such date being identified as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Preferred Stock. Such
dividends shall be in an amount per share (rounded to the
nearest cent) equal to the greater of (1) $1 or (2) 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 since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock.
If the Corporation at any time declares or pays any
dividend on the Common Stock payable in shares of Common
Stock or effects a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, in each such case the amount to
which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (2)
of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately
prior to such event.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (a) of this Section immediately after it declares
a dividend or distribution on the Common Stock (other than
a dividend payable in shares of Common Stock); provided
that, if no dividend or distribution has 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 per share on the
Series A Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless (1) the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such
shares, or (2) the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred
Stock 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 Series A Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
3. Voting Rights. Except as required by law, holders
of Series A Preferred Stock shall have no voting rights and
their consent shall not be required for taking any corporate
action.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock
outstanding have been paid in full, the Corporation shall
not:
(1) declare or pay dividends or make any other
distributions on any shares of stock ranking junior
(either as to dividends or on liquidation,
dissolution, or winding up) to the Series A Preferred
Stock;
(2) declare or pay dividends or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or on liquidation,
dissolution, or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in
proportion to the total amounts to which the holders
of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or on liquidation,
dissolution, or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time
redeem, purchase, or otherwise acquire shares of any
such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to
dividends or on liquidation, dissolution, or winding
up) to the Series A Preferred Stock; or
(4) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock
or any shares of stock ranking or a parity with the
Series A Preferred Stock except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders
of such shares on such terms as the Board of
Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes,
determines in good faith will result in fair and
equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (a) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such
shares shall, on cancellation, become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Articles of
Incorporation, or in any other Statement of Resolution creating
a series of Preferred Stock or any similar stock or as otherwise
required by law.
6. Liquidation, Dissolution or Winding Up. On any
liquidation, dissolution, or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock
ranking junior (either as to dividends or on liquidation,
dissolution, or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A
Preferred Stock have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided
that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to
holders of shares of Common Stock, or (B) to the holders of
shares of stock ranking on a parity (either as to dividends or
on liquidation, dissolution, or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series
A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled on such liquidation, dissolution, or winding up. If
the Corporation at any time declares or pays any dividend on the
Common Stock payable in shares of Common Stock or effects a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, in each such case
the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event
under the proviso in clause (a) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7. Consolidation, Merger, etc. If the Corporation
enters into any consolidation, merger, combination, or other
transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash, or any
other property, each share of Series A Preferred Stock 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, 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. If the Corporation at any time
declares or pays any dividend on the Common Stock payable in
shares of Common Stock, or effects a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of
shares of Common Stock, in each such case the amount set forth
in the preceding sentence with respect to the exchange or change
of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior
to such event.
8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the
Corporation's Preferred Stock.
Signed on _________, ___
HON INDUSTRIES Inc.
(Corporate Seal) By: _______________________
President
Attest:
______________________
Secretary
STATE OF IOWA, MUSCATINE COUNTY, ss.
On August ___ 1998, _______________ appeared
personally before the undersigned Notary Public and, being duly
sworn, stated that he is the President of the Corporation which
executed the preceding document, the corporate seal is affixed,
and the document was signed and sealed on the Corporation's
behalf by authority of its Board of Directors; and such officer
acknowledged the voluntary execution of the document by him and
by the Corporation.
______________________________
Notary Public in and for the
State of Iowa
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER AUGUST 20, 2008 (SUBJECT TO
POSSIBLE EXTENSION AT THE OPTION OF THE COMPANY) OR
EARLIER IF REDEEMED, EXCHANGED OR AMENDED. THE
RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND
AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT,
RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY BECOME
NULL AND VOID.
Right Certificate
HON INDUSTRIES 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
August 13, 1998 (the "Rights Agreement"), between HON INDUSTRIES
Inc., an Iowa corporation (the "Company"), and Xxxxxx Trust and
Savings Bank (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 prior to 5:00 P.M. (Eastern time)
on the Expiration Date (as such term is defined in the Rights
Agreement) at the principal office or offices of the Rights
Agent designated for such purpose, one one-hundredth of a fully
paid nonassessable share of Series A Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred
Shares"), of the Company, at a purchase price of $200.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase and related Certificate duly
executed. If this Right Certificate is exercised in part, the
holder will be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole
Rights not exercised. The number of Rights evidenced by this
Right Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise thereof)
set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of the date of the Rights
Agreement, based on the Preferred Shares as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price
and/or the number and/or kind of securities issuable upon the
exercise of the Rights evidenced by this Right Certificate are
subject to adjustment upon the occurrence of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are 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 of the
Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary
suspension of the exercisability of the Rights under the
circumstances specified in the Rights Agreement. Copies of the
Rights Agreement are on file at the above-mentioned office of
the Rights Agent and can be obtained from the Company without
charge upon written request therefor. Terms used herein with
initial capital letters and not defined herein are used herein
with the meanings ascribed thereto in the Rights Agreement.
Pursuant to the Rights Agreement, from and after the
occurrence of a Flip-in Event, any Rights that are Beneficially
Owned by (i) any Acquiring Person (or any Affiliate or Associate
of any Acquiring Person), (ii) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who becomes a
transferee after the occurrence of a Flip-in Event, or (iii) a
transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently with
the Flip-in Event pursuant to either (a) a transfer from an
Acquiring Person to holders of its equity securities or to any
Person with whom it 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 the
purpose or effect of avoiding certain provisions of the Rights
Agreement, and subsequent transferees of any of such Persons,
will be void without any further action and any holder of such
Rights will thereafter have no rights whatsoever with respect to
such Rights under any provision of the Rights Agreement. From
and after the occurrence of a Flip-in Event, no Right
Certificate will be issued that represents Rights that are or
have become void pursuant to the provisions of the Rights
Agreement, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become void
pursuant to the provisions of the Rights Agreement will be
canceled.
This Right Certificate, with or without other Right
Certificates, may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates
entitling the holder to purchase a like number of one one-
hundredths of a Preferred Share (or other securities, as the
case may be) as the Right Certificate or Right Certificates
surrendered entitled such holder (or former holder in the case
of a transfer) to purchase, upon presentation and surrender
hereof at the principal office of the Rights Agent designated
for such purpose, with the Form of Assignment (if appropriate)
and the related Certificate duly executed.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right or
may be exchanged in whole or in part. The Rights Agreement may
be supplemented and amended by the Company, as provided therein.
The Company is not required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the option of
the Company, be evidenced by depositary receipts) or other
securities issuable upon the exercise of any Right or Rights
evidenced hereby. In lieu of issuing such fractional Preferred
Shares or other securities, the Company may make a cash payment,
as provided in the Rights Agreement.
No holder of this Right Certificate, as such, will be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable upon
the exercise of the Right or Rights represented hereby, nor will
anything contained herein or in the Rights Agreement be
construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate have been exercised in
accordance with the provisions of the Rights Agreement.
This Right Certificate will not be valid or obligatory for
any purpose until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of __________,
_____.
[SEAL]
ATTEST: HON INDUSTRIES Inc.
By: _______________________
Name:
Title:
Countersigned:
XXXXXX TRUST AND SAVINGS BANK
By:__________________________
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _______________ hereby sells, assigns
and transfers unto ________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _______________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: __________, ____
____________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being sold, assigned, transferred, split up,
combined or exchanged 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 in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: __________, ____
___________________________
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To HON INDUSTRIES Inc.:
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Right Certificate to
purchase the one one-hundredths of a Preferred Share or other
securities issuable upon the exercise of such Rights and
requests that certificates for such securities be issued in the
name of and delivered to:
Please insert social security
or other identifying number:__________________________________
______________________________________________________________
(Please print name and address)
______________________________________________________________
If such number of Rights is not all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance
remaining of such Rights will be registered in the name of and
delivered to:
Please insert social security
or other identifying number:__________________________________
______________________________________________________________
(Please print name and address)
______________________________________________________________
Dated: __________, ____
____________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of
any such 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 Right Certificate from any Person who is, was,
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: __________, ____
___________________________
Signature
NOTICE
Signatures on the foregoing Form of Assignment and Form of
Election to Purchase and in the related Certificates must
correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations
and credit unions with membership in an approved medallion
signature program) pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
The Board of Directors (the "Board") of HON INDUSTRIES Inc.
(the "Company") has declared a dividend distribution of one
right (a "Right") for each outstanding share of common stock,
par value $1.00 per share (the "Common Shares"), of the Company.
The distribution is payable on August 20, 1998 (the "Record
Date") to the stockholders of record as of the close of business
on the Record Date. Each Right entitles the registered holder
thereof to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Stock, par
value $1.00 per share (the "Preferred Shares"), of the Company
at a price (the "Purchase Price") of $200.00 per one one-
hundredth of a Preferred Share, subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement, dated as of August 13, 1998 (the "Rights Agreement"),
between the Company and Xxxxxx Trust and Savings Bank, as Rights
Agent (the "Rights Agent").
Under the Rights Agreement, the Rights will be evidenced by
the certificates evidencing Common Shares until the earlier (the
"Distribution Date") of: (i) the close of business on the tenth
calendar day following the first date (the "Share Acquisition
Date") of public announcement that a person (other than the
Company, a subsidiary or employee benefit or stock ownership
plan of the Company or any of its affiliates or associates),
together with its affiliates and associates, has acquired
beneficial ownership of 20% or more of the outstanding Common
Shares (any such person being hereinafter called an "Acquiring
Person") or (ii) the close of business on the tenth business day
(or such later date as may be specified by the Board) following
the commencement of a tender offer or exchange offer by any
person (other than the Company, a subsidiary or employee benefit
or stock ownership plan of the Company or any of its affiliates
or associates), the consummation of which would result in
beneficial ownership by such person 20% or more of the
outstanding Common Shares.
The Rights Agreement provides that, until the Distribution
Date, the Rights may be transferred with and only with the
Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), any certificate
evidencing Common Shares of the Company issued upon transfer or
new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates
evidencing Common Shares will also constitute the transfer of
the Rights associated with such certificates. As soon as
practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will
be mailed to holders of record of Common Shares as of the close
of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. No Right is
exercisable at any time prior to the Distribution Date. The
Rights will expire on the tenth anniversary of the Record Date
(the "Final Expiration Date") unless earlier redeemed, exchanged
or amended by the Company as described below. Until a Right is
exercised, the holder thereof, as such, will have no rights as a
stockholder of the Company, including the right to vote or to
receive dividends.
The Purchase Price payable, and the number of the Preferred
Shares or other securities issuable, upon exercise of the Rights
will be subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of Preferred Shares of
certain rights or warrants to subscribe for or purchase the
Preferred Shares at a price, or securities convertible into the
Preferred Shares with a conversion price, less than the
then-current market price of the Preferred Shares, or (iii) upon
the distribution to holders of the Preferred Shares of evidences
of indebtedness, cash (excluding regular periodic cash
dividends), assets, stock (excluding dividends payable in the
Preferred Shares) or subscription rights or warrants (other than
those referred to above). The number of outstanding Rights and
the number of one one-hundredths of the Preferred Shares
issuable upon exercise of each Right will be subject to
adjustment in the event of a stock dividend on the Common Shares
payable in Common Shares or a subdivision, combination or
reclassification of Common Shares occurring, in any such case,
prior to the Distribution Date.
The Preferred Shares issuable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled,
in connection with the declaration of a dividend on the Common
Shares, to a preferential dividend payment equal to the greater
of (i) $1.00 per share and (ii) an amount equal to 100 times the
related dividend declared per Common Share. Subject to
customary anti-dilution provisions, in the event of liquidation,
the holders of Preferred Shares will be entitled to a
preferential liquidation payment equal to the greater of (a)
$100 per share and (b) an amount equal to 100 times the
liquidation payment made per Common Share. Because of the
nature of the Preferred Shares' dividend, voting and liquidation
rights, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of a Right should
approximate the value of one Common Share.
Rights will be exercisable to purchase Preferred Shares
only after the Distribution Date occurs and prior to the
occurrence of a Flip-in Event as described below. A
Distribution Date resulting from the commencement of a tender
offer or exchange offer described in clause (ii) of the second
paragraph of this summary could precede the occurrence of a
Flip-in Event and thus result in the Rights being exercisable to
purchase Preferred Shares. A Distribution Date resulting from
any occurrence described in clause (i) of the second paragraph
of this summary would necessarily follow the occurrence of a
Flip-in Event and thus result in the Rights being exercisable to
purchase Common Shares or other securities as described below.
Under the Rights Agreement, in the event (a "Flip-in
Event") that (i) any person, together with its affiliates and
associates, becomes the beneficial owner of 20% or more of the
outstanding Common Shares, (ii) any Acquiring Person or any
affiliate or associate thereof merges into or combines with the
Company and the Company is the surviving corporation, (iii) any
Acquiring Person or any affiliate or associate thereof effects
certain other transactions with the Company, or (iv) during such
time as there is an Acquiring Person the Company effects certain
transactions, in each case as described in the Rights Agreement,
then, in each such case, proper provision will be made so that
from and after the latest of the Share Acquisition Date, the
Distribution Date and the date of the occurrence of such Flip-in
Event each holder of a Right, other than Rights that are or were
owned beneficially by an Acquiring Person (which, from and after
the date of a Flip-in Event, will be void), will have the right
to receive, upon exercise thereof at the then-current exercise
price of the Right, that number of Common Shares (or, under
certain circumstances, an economically equivalent security or
securities of the Company) that at the time of such Flip-in
Event have a market value of two times the exercise price of the
Right.
In the event (a "Flip-over Event") that, at any time after
a person has become an Acquiring Person, (i) the Company merges
with or into any person and the Company is not the surviving
corporation, (ii) any person merges with or into the Company and
the Company is the surviving corporation, but all or part of the
Common Shares are changed or exchanged for stock or other
securities of any other person or cash or any other property, or
(iii) 50% or more of the Company's assets or earning power,
including securities creating obligations of the Company, are
sold, in each case as described in the Rights Agreement, then,
and in each such case, proper provision will be made so that
each holder of a Right, other than Rights which have become
void, will thereafter have the right to receive, upon the
exercise thereof at the then-current exercise price of the
Right, that number of shares of common stock (or, under certain
circumstances, an economically equivalent security or
securities) of such other person that at the time of such Flip-
over Event have a market value of two times the exercise price
of the Right.
From and after the later of the Share Acquisition Date and
the Distribution Date, Rights (other than any Rights that have
become void) will be exercisable as described above, upon
payment of the aggregate exercise price in cash. In addition,
at any time after the later of the Share Acquisition Date and
the Distribution Date and prior to the acquisition by any person
or group of affiliated or associated persons of 50% or more of
the outstanding Common Shares, the Company may exchange the
Rights (other than any rights that have become void), in whole
or in part, at an exchange ratio of one Common Share per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an
adjustment in the Purchase Price of at least 1%. The Company
will not be required to issue fractional Preferred Shares (other
than fractions that are integral multiples of one one-hundredth
of a Preferred Share, which may, at the option of the Company,
be evidenced by depositary receipts) or fractional Common Shares
or other securities issuable upon the exercise of Rights. In
lieu of issuing such securities, the Company may make a cash
payment, as provided in the Rights Agreement.
The Company may, at its option, redeem the Rights in whole,
but not in part, at a price of $.01 per Right, subject to
adjustment (the "Redemption Price"), at any time prior to the
close of business on the Share Acquisition Date. Immediately
upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The Rights Agreement may be amended by the Company without
the approval of any holders of Rights Certificates, including
amendments that increase or decrease the Purchase Price, that
add other events requiring adjustment to the Purchase Price
payable and the number of the Preferred Shares or other
securities issuable upon the exercise of the Rights or that
modify procedures relating to the redemption of the Rights,
except that no amendment may be made that decreases the stated
Redemption Price to an amount less than $.01 per Right.
The Board will have the exclusive power and authority to
administer the Rights Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company
therein, or as may be necessary or advisable in the
administration of the Rights Agreement, including without
limitation the right and power to interpret the provisions of
the Rights Agreement and to make all determinations deemed
necessary or advisable for the administration of the Rights
Agreement (including any determination to redeem or not redeem
the Rights or to amend or not amend the Rights Agreement). All
such actions, calculations, interpretations and determinations
(including any omission with respect to any of the foregoing)
which are done or made by the Board in good faith will be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties and will not subject
the Board to any liability to any person, including without
limitation the Rights Agent and the holders of the Rights.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a
Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company.
This summary description of the Rights is as of the Record
Date, does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is
incorporated herein by this reference.
