Rights Agreement
Rights Agreement, dated as of February 20, 1999 (the
"Agreement") between Temple-Inland Inc., a Delaware corporation
(the "Company") and First Chicago Trust Company of New York, as
Rights Agent (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on February 3, 1989 (the "1989 Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized the Rights Agreement dated February 3, 1989, between
the Company and NCNB Texas National Bank (the "1989 Agreement")
and declared a dividend distribution of one right (the "1989
Rights") for each share of common stock, par value $1.00 per
share, of the Company (the "Common Stock") outstanding at the
close of business on February 20, 1989 (the "1989 Record Date"),
and authorized the issuance of one 1989 Right (as such number may
have been adjusted pursuant to the provisions of the 1989
Agreement) for each share of Common Stock issued between the 1989
Record Date (whether originally issued or delivered from the
Company's treasury) and the 1989 Distribution Date, each 1989
Right initially represented the right to purchase one one-
hundredth of a share of Series A Junior Participating Preferred
Stock of the Company having the rights, powers, and preferences
set forth in the form of Certificate of Designation, Preferences
and Rights as filed with the Secretary of State of the State of
Delaware on February 17, 1989 (the "Certificate of Designation");
and
WHEREAS, on February 5, 1999, the Board of Directors of the
Company determined it desirable and in the best interests of the
Company and its stockholders for the Company to extend the
benefits afforded by the 1989 Agreement and to implement such
extension by executing this Agreement; and
WHEREAS, on February 5, 1999, the Board of Directors of the
Company authorized the Rights Agreement dated February 20, 1999,
between the Company and First Chicago Trust Company of New York
(the "Agreement") and declared a dividend distribution of onehalf
of a right (the "Rights") for each share of Common Stock
outstanding at the close of business on February 20, 1989 (the
"Record Date"), and authorized the issuance of one-half of a
Right (as such number may be adjusted pursuant to the provisions
of this Agreement) for each share of Common Stock issued between
the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date, each one-half
Right initially representing the right to purchase one one-
hundredth of a share of Series A Junior Participating Preferred
Stock of the Company having the rights, powers, and preferences
set forth in the Certificate of Designation; and
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 20 percent or more of the shares of
Common Stock then outstanding, but shall not include the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan.
(b) "Act" shall mean the Securities Act of 1933.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended and in effect on the date of this Agreement (the
"Exchange Act").
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement, or understanding (whether or not
in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants, or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of or to "beneficially own" (A)
securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22
hereof (the "Original Rights") or pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to
any Original Rights;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules
and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement, or understanding, whether or
not in writing; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of or to "beneficially own"
any security under this subparagraph (ii) as a result of an
agreement, arrangement, or understanding to vote such
security if such agreement, arrangement, or understanding:
(A) arises solely from a revocable proxy given in response
to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and
(B) is not also then reportable by such Person on Schedule
13D under the Exchange Act (or any comparable or successor
report); or
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement, or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (d)), or disposing of
any voting securities of the Company; provided, however,
that nothing in this paragraph (d) shall cause a person
engaged in business as an underwriter of securities to be
the "Beneficial Owner" of or to "beneficially own" any
securities acquired through such person's participation in
good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(f) "Close of business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M., New
York City time, on the next succeeding Business Day.
(g) "Common Stock" shall mean the common stock par value
$1.00 per share, of the Company, except that "Common Stock" when
used with reference to any Person other than the Company shall
mean the capital stock of such Person with the greatest voting
power or the equity securities or other equity interest having
power to control or direct the management, of such Person.
(h) "Common stock equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(i) "Current market price" shall have the meaning set forth
in Section 11(d)(i) hereof.
(j) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(1) "Exchange Act" shall have the meaning set forth in
Section 1(c) hereof.
(m) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Final Expiration Date" shall mean the close of
business on February 20, 2009.
(o) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(p) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $1.00 per share, of the
Company, and, to the extent that there are not a sufficient
number of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other
series of Preferred Stock, par value $1.00 per share, of the
Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior
Participating Preferred Stock.
(q) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(r) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(s) "Record Date" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(t) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(u) "Rights" shall have the meaning set forth in the
recitals at the beginning of the Agreement.
(v) "Rights Agent" shall have the meaning set forth in the
parties clause at the beginning of this Agreement.
(w) "Rights Certificates" shall have the meaning set forth
in Section 3(a) hereof.
(x) "Rights Dividend Declaration Date" shall have the
meaning set forth in the recitals at the beginning of this
Agreement.
(y) "Section 11(a)(ii) Event" shall mean any of the events
described in Section 11(a)(ii) hereof.
(z) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(aa) "Section 13 Event" shall mean any event described in
clauses (x), (y), or (z) of Section 13(a) hereof.
(bb) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(cc) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition,
shall include without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(dd) "Subsidiary" shall mean, with reference to any Person,
any corporation of which an amount of voting securities
sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
(ee) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ff) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(gg) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(hh) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof,
and the Rights Agent hereby accepts such appointment. The Company
may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable.
Section 3. Issue of Rights Certificates. (a) Until the
earlier of (i) the close of business on the tenth business day
after the Stock Acquisition Date (or, if the tenth day after the
Stock Acquisition Date occurs before the Record Date, the close
of business on the Record Date) or (ii) the close of business on
the tenth business day (or such later date as may be determined
by the Board of Directors) after the date that a tender or
exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed, or established by the Company for or
pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the Beneficial owner
of 25 percent or more of the shares of Common Stock then out
standing (the earlier of (i) or (ii) being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not
by separate certificates and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will
send by first class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in
substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Right Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) The Company will make available a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), to each record holder of the Common Stock who may so
request from time to time. With respect to certificates for the
Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of
the Common Stock shall also be the registered holders of the
associated Rights. Until the earlier of the Distribution Date or
the Expiration Date (as such term is defined in Section 7
hereof), the transfer of any certificates representing shares of
Common Stock in respect of which Rights have been issued shall
also constitute the transfer of the Rights associated with such
shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock that are issued (whether originally issued or from
the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date.
Certificates representing such shares of Common Stock shall also
be deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Temple-Inland Inc. (the "Company") and First Chicago
Trust Company of New York (the "Rights Agent") dated as of
February 20, 1999 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which
is on file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was, or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become
null and void.
With respect to such certificates bearing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the
Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the
transfer of the rights associated with the Common Stock
represented by such certificates.
Section 4. Form of Rights Certificates. (a) The Rights
Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit A hereto and may
have such marks of identification or designation and such
legends, summaries, or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase such number of one one-
hundredths of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (such exercise price per
one one-hundredth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned
by: (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of
Any such Associate or Affiliate) who becomes a transferee after
such Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect avoidance
of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement, or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate
are or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and
the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of such
Agreement.
Section 5. Countersignature and Registration. (a) The
Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof, which shall be
attested by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer of the Company, either
manually or by facsimile signature. The Rights Certificates shall
be manually countersigned (or by facsimile if permitted by law)
by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall
have signed any of the Rights Certificates shall cease to be such
officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force
and effect as though the person who signed such Rights
Certificates had not ceased to be such of officer of the Company,
and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of
such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. (a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close
of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any Rights Certificate
or Certificates may be transferred, split up, combined, or
exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash, or other
assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine, or exchange any
Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up,
combined, or exchanged at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company
may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination, or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction, or mutilation of a Rights Certificate, and, in case
of loss, theft, or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation
of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed, or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. (a) Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability
set forth in Section 9(c), Section 11(a)(iii), and Section 23(a)
hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one one-hundredths of a share
(or other securities, cash, or other assets, as the case may be)
as to which such surrendered Rights are then exercisable, at or
prior to the earlier of (i) the close of business on February 20,
2009 (the "Final Expiration Date"), or (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier
of (i) and (ii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-hundredth of a share
of Preferred Stock pursuant to the exercise of a Right shall
initially be $200 and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price per one
one-hundredth of a share of Preferred Stock (or other shares,
securities, cash, or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-hundredths
of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) requisition from the
Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made by certified bank check or money
order payable to the order of the Company or the Rights Agent. In
the event that the Company is obligated to issue other securities
(including Common Stock) of the Company, pay cash, and/or
distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other
securities, cash, and/or other property are available for
distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require prior to the occurrence of
a Triggering Event that, upon exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Rights Certificate, or
upon the order of such registered holder, registered in such name
or names as may be designated by such registered holder, subject
to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or
other Person as a result of its failure to make any de
terminations with respect to an Acquiring Person or any of its
Affiliates, Associates, or transferees hereunder.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose
of exercise, transfer, split up, combination, or exchange shall,
if surrendered to the Company or any of its agents, be delivered
to the Rights Agent for cancellation or in canceled form or, if
surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire,
any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such can
celed Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the
Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, a registration statement under the Act, with respect to
the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the date of the
expiration of the Rights. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety
(90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is
no longer in effect. In addition, if the Company shall determine
that a registration statement relating to the Preferred Stock is
required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such
time as such registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction unless
the requisite qualification in such jurisdiction shall have been
obtained and until a registration statement has been declared
effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one
hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges that may be payable in respect of the issuance
or delivery of the Rights Certificates and of any certificates
for a number of one one-hundredths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax that may be payable in respect
of any transfer or delivery of Rights Certificates to a Person
other than, or the issuance or delivery of a number of one one
hundredths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in respect of a name other
than that of, the registered holder of the Rights Certificates
evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have been
paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-hundredths of
a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder
of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions, or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11 Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number kind
of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares,
or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination, or
reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall
be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, that,
if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books
of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification. If
an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (i) shall merge into the
Company or otherwise combine with the Company, and the Company
shall be the continuing or surviving corporation of such merger
or combination, and the Common Stock of the Company shall remain
outstanding and not be changed, (ii) shall, in one or more
transactions, transfer any assets (other than through exercise or
conversion of securities exercisable for or convertible into
Common Stock that are outstanding on the date hereof) to the
Company in exchange (in whole or in part) for shares of Common
Stock or for securities exercisable for or convertible into
shares of Common Stock or otherwise obtain from the Company, with
or without consideration, any additional shares of Common Stock
or other securities exercisable for or convertible into shares of
Common Stock (other than as part of a pro rata distribution to
all holders of Common Stock), (iii) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer, or otherwise dispose (in
one or more transactions), to, from, or with, as the case may be,
the Company or any of its Subsidiaries assets (I) other than in
the ordinary course of business or, (II) having an aggregate fair
market value of more than $10,000,000 (including any such
transaction pursuant to a distribution, pro rata or otherwise, or
offer to all holders of Common Stock, but excluding any regular
periodic cash dividend), (iv) shall receive any compensation from
the Company or any of the Company's Subsidiaries on terms and
conditions less favorable to the Company other than compensation
for full-time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries') past prices,
or (v) shall receive the benefit, directly or indirectly (except
proportionately as a stockholder or in the ordinary course of
business), of any loans, advances, guarantees, pledges or other
financial assistance or any tax credits or other tax advantage
having an aggregate value in excess of $10,000,000 provided by
the Company or any of its Subsidiaries,
(B) during such time as there is an Acquiring Person,
there shall be any reclassification of any securities (including
any reverse stock split), or 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
(whether or not with or into or otherwise involving an Acquiring
Person or any Affiliate or Associate thereof) that has the
effect, directly or indirectly, of increasing by more than one
percent the proportionate share of the outstanding shares of any
class of equity or convertible securities of the Company or any
of its Subsidiaries that is directly or indirectly owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person, or
(C) any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized,
appointed, or established by the Company for or pursuant to the
terms of any such plan), alone or together with its Affiliates
and Associates, shall, at any time after the Rights Dividend
Declaration Date, become the Beneficial Owner of 25 percent or
more of the shares of Common Stock then outstanding, unless the
event causing the 25 percent threshold to be crossed is a
transaction set forth in Section 13(a) hereof, or is an
acquisition of shares of Common Stock pursuant to a tender offer
or an exchange offer for all outstanding shares of Common Stock
at a price and on terms determined by at least a majority of the
members of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, Affiliates, or
Associates of an Acquiring Person, after receiving advice from
one or more investment banking firms, to be (a) at a price that
is fair to stockholders (taking into account all factors that
such members of the Board deem relevant including, without
limitation, prices that could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the best interests of
the Company and its stockholders,
then, promptly following the first occurrence of any Section
11(a)(ii) Event, proper provision shall be made so that each
holder of a Right (except as provided below and in Section 7(e)
hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of a number of one one-
hundredths of a share of Preferred Stock, such number of shares
of Common Stock of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then
number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter
be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50 percent of the current market
price (determined pursuant to Section 11(d) hereof) per share of
Common Stock on the date of such first occurrence (such number of
shares, the "Adjustment Shares").
(iii) In the event that the number of shares of Common
Stock that are authorized by the Company's restated
certificate of incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph
(ii) of this Section 11(a), the Company shall: (A) determine
the excess of (1) the value of the Adjustment Shares
issuable it on the exercise of a Right (the "Current Value")
over (2) the Purchase Price (such excess, the "Spread"), and
(B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares, or
units of shares, of preferred stock (such as the Preferred
Stock) that the Board of Directors of the Company has deemed
to have substantially the economic equivalent of shares of
Common Stock (such shares of preferred stock, "common stock
equivalents )), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Board of
Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by
the Board of Directors of the Company; provided, however, if
the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty
(30) days following the later of (x) the first occurrence of
a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein
as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or
cash have an aggregate value equal to the Spread. If the
Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise
in full of the Rights, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the
event of any such sus pension, the Company shall issue a
public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value
of the Common Stock shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of
the Common Stock on the Section 11(a)(ii) Trigger Date and
the value of any "common stock equivalent" shall be deemed
to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options, or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such
record date) Preferred Stock (or shares having the same rights,
privileges, and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per
share of Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares
of Preferred Stock that the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent preferred
stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of
which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred Stock
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Preferred
Stock, but including any dividend payable in stock other than
Preferred Stock), or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock on such record date, less
the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be de
scribed in a statement filed with the Rights Agent) of the
portion of the cash, assets, or evidences of indebtedness so to
be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of
which shall be such current market price (as determined pursuant
to Section 11(d) hereof) per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase
Price that would have been in effect if such record date had not
been fixed.
(d)(i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30) consecutive
Trading Pays (as such term is hereinafter defined) immediately
prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market price"
per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common
Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that
the current market price per share of the Common Stock is
determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on
such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (oth er
than the Rights) or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Pay period, as set forth above, after the ex-dividend
date for such dividend or distribution, or the record date for
such subdivision, combination, or reclassification, then, and in
each such case, the "current market price" shall be properly
adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of Common Stock
are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the
principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good
faith by the Board of Directors of the Company shall be used. The
term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the
fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be con
clusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d),
the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number
may be appropriately ad justed for such events as stock splits,
stock dividends, and recapitalizations with respect to the Common
Stock occurring after the date of this Agreement) multiplied by
the current market price per share of the Common Stock. If
neither the Common Stock nor the Preferred Stock is publicly held
or so listed or traded, "current market price" per share of the
Preferred Stock shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of one one-
hundredth of a share of Preferred Stock shall be equal to the
"current market price" of one share of Preferred Stock divided by
100.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any
adjustments that by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-
thousandth of a share of Common Stock or other share or one-
millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the
transaction that mandates such adjustment, or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k), and (m), and the provisions of Sections 7, 9,
10, 13, and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-hundredths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one one-hundredths
of a share of Preferred Stock (calculated to the nearest one-
millionth) obtained by (i) multiplying (x) the number of one one-
hundredths of a share covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of one one-hundredths of
a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of one one
hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held
of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-ten-
thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment and, if known at the time, the
amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day
thereafter, but if the Rights Certificates have been issued,
shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed, and countersigned in
the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per one one-hundredth of a share and
the number of one one-hundredths of a share that were expressed
in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any,
of the number of one one-hundredths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any
corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and nonassessable such number of one one-hundredths of
a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one one
hundredths of a share of Preferred Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise
over and above the number of one one-hundredths of a share of
Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx
or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Board of Directors
of the Company shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities that by their terms are
convertible into or exchangeable for shares of Preferred Stock,
(iv) stock dividends, or (v) issuance of rights, options, or
warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50
percent of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger, or sale there are any rights, warrants, or
other instruments or securities outstanding or agreements in
effect that would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger, or sale, the stockholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 26 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding imme
diately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section
11 and Section 13 hereof, the Company shall (a) promptly prepare
a certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate,
and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any
adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event that, following the
Stock Acquisition Date, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), and the Company shall not be
the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction that complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50
percent of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that:
(i) each holder or a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable, and freely
tradable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal, or other adverse claims,
as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number or one one-hundredths
of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event
(or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such
one one-hundredths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to
as the "Purchase Price" for each Right and for all purposes of
this Agreement) by (2) 50 percent of the current market price
(determined pursuant to Section 11(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation
of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Sec
tion 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation
of a sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market
value.
(c) The Company shall not consummate any such consolidation,
merger, sale, or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that
have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with
a prospectus at all times meeting the requirements of the
Act) until the Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
that have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a tender or exchange
offer for all outstanding shares of Common Stock that complies
with the provisions of Section 11(a)(ii)(C) hereof (or a wholly
owned subsidiary of any such Person or Persons), (ii) the price
per share of Common Stock offered in such transaction is not less
than the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant to
such tender or exchange offer, and (iii) the form of
consideration being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is the same as the form
of consideration paid pursuant to such tender or exchange offer.
Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares. (a)
The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section
11(p) hereof, or to distribute Rights Certificates that evidence
fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right shall be
the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day
shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the
Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then
in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than, except as provided in
Section 7(c) hereof, fractions that are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the
Rights or to distribute certificates that evidence fractional
shares of Preferred Stock (other than fractions that are integral
multiples of one one-hundredth of a share of Preferred Stock). In
lieu of fractional shares of Preferred Stock that are not
integral multiples of one one-hundredth of a share of Preferred
Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one one-hundredth of a share of Preferred
Stock. For purposes of this Section 14(b), the current market
value of one one-hundredth of a share of Preferred Stock shall be
one one-hundredth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates that evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one (1) share
of Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing
price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Rights Certif
icate (or, prior to the Distribution Date, of the Common Stock),
may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights
Agent designated for such purposes, duly endorsed or accompanied
by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in
whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree, or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory, or administrative
agency or commission, or any statute, rule, regulation, or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best
efforts to have any such order, decree, or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends, or be deemed for any
purpose the holder of the number of one one-hundredths of a share
of Preferred Stock or any other securities of the Company that
may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or with hold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 24 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on de
mand of the Rights Agent, its reasonable expenses and counsel
fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross
negligence, bad faith, or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against
any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered, or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties
hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person and the determination of
"current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary, or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provi
sions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify
the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or Section 13 hereof
or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after actual
notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or
Preferred Stock will, when so issued, be validly authorized and
issued, fully paid, and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge, and deliver or cause to be performed, executed,
acknowledged, and delivered all such further and other acts,
instruments, and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer,
or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer,
or employee of the Rights Agent may buy, sell, or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect, or misconduct of any such attorneys or agents
or for any loss to the Company resulting from any such act,
default, neglect, or misconduct; provided, however, reasonable
care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof,
the Rights Agent shall not take any further action with respect
to such requested exercise or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first
class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certifi
cate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the
United States that 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
that has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 or (b) an
affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties, and responsibilities
as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act, or deed necessary for the
purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement outstanding, granted or awarded
as of the Distribution Date, or upon the exercise, conversion, or
exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would
be issued, and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) The Board of
Directors of the Company may, at its option, at any time prior to
the earlier of (i) the close of business on the tenth business
day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth business day following the
Record Date), or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price");
provided, however, that if, following the occurrence of a Stock
Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any Triggering Event, (i) a
Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or indirectly
involving the Company or any of its Subsidiaries, that did not
result in the occurrence of a Triggering Event such that such
Person is thereafter a Beneficial Owner of 10 percent or less of
the outstanding shares of Common Stock, and (ii) there are no
other Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons, then the
right of redemption shall be reinstated and thereafter be subject
to the provisions of this Section 23. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not
be exercisable after the first occurrence of a Section 11(a)(ii)
Event until such time as the Company's right of redemption
hereunder has expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the
"current market price," as defined in Section 11(d)(i) hereof, of
the Common Stock at the time of redemption), or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made.
Section 24. Notice of Certain Events. (a) In case the
Company shall propose, at any time after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to
the holders of Preferred Stock (other than a regular quarterly
cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation
or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related
transactions, of more than 50 percent of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company and or any of
its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution, or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of such proposed action that shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking
of such proposed action or the date of participation therein by
the holders of the shares of Preferred Stock whichever shall be
the earlier.
(b) In case any Section 11(a)(ii) Event hereof shall occur,
then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event
to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be
deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Temple-Inland Inc.
000 Xxxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
First Chicago Trust Company of New York
000 Xxxxxxxxxx Xxxx.
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxx
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if sent by first class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein that may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem
necessary or desirable and that shall not adversely affect the
interests of the holders of Rights Certificate provided, this
Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Company that states that the proposed
supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement
to the contrary, no supplement or amendment shall be made that
changes the Redemption Price, the Final Expiration Date, the
Purchase Price, or the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Stock.
Section 27. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board of
Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board 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 a determination to
redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board in
good faith, shall (x) be final, conclusive, and binding on the
Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board to any liability to
the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy, or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certifi
xxxxx (and, prior to the Distribution Date, registered holders of
the Common Stock).
Section 30. Severability. If any term, provision, covenant,
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants,
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired, or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void, or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors.
Section 31. Governing Law. This Agreement, each Right, and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts made and to be per
formed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
Attest: TEMPLE-INLAND INC.
By: By:
--------------------- ---------------------
Name: Name:
Title: Title:
Attest: FIRST CHICAGO TRUST
COMPANY OF NEW YORK
By: By:
------------------ ----------------------
Name: Name:
Title: Title:
Exhibit A
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER February 20, 2009, OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, A $0.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.](*)
----------------------------
(*) The portion of the legend in brackets
shall be inserted only if
Applicable and shall replace the
preceding sentence.
Rights Certificate
TEMPLE-INLAND 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 February 20, 1999 (the "Rights Agreement"), between
Temple-Inland Inc., a Delaware corporation (the "Company"), and
First Chicago Trust Company of New York (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 P.M. (New
York time) on February 20, 2009, at the office or offices of the
Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-hundredth of a fully paid, non-assessable
share of Series A Junior Participating Preferred Stock (the
"Preferred Stock"), of the Company, at a purchase price of $200
per share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to
Purchase and related Certificate duly executed. The number of
Rights evidenced by this Rights Certificate (and the number of
shares that may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of February 20, 1999, based on the
Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights may be exercised so that only
whole shares of Preferred Stock will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Person
(as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate, or
Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person or an Affiliate or Associate
of any such Person, such Rights shall become null and void and no
holder hereof shall have any rights with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities, that may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions, and conditions of the Rights Agreement, which terms,
provisions, and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties, and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written
request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $0.01 per Right at
any time prior to the earlier of the close of business on (i) the
tenth business day following the Stock Acquisition Date (as such
time period may be extended pursuant to the Rights Agreement),
and (ii) the Final Expiration Date. After the expiration of the
redemption period, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving
the Company.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions that are integral multiples of one one-hundredth of a
share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder
of shares of Preferred Stock or of any other securities of the
Company that may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a 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
Rights Certificate shall have been exercised as provided in the
Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of -------- ---, -----
ATTEST: TEMPLE-INLAND INC.
----------------------- By: --------------------
Corporate Secretary Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By: --------------------------
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights
Certificate.)
FOR VALUE RECEIVED --------------------------------------------
hereby sells, assigns, and transfers unto ---------------------
--------------------------------------------------------------
(Please print name and address of transferee)
---------------------------------------------------------------
this Rights Certificate, together with all rights, title, and
interest therein, and does hereby irrevocably constitute and
appoint ______________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ---------- ---, ----- -----------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned, and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was,
or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.
Dated: --------- ----, ----- --------------------
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented by the
Rights Certificate.)
To: TEMPLE-INLAND INC.
The undersigned hereby irrevocably elects to exercise -----
Rights represented by this Rights Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other
person that may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of and delivered to:
Please insert social security
or other identifying number: ------------------------------
----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number: -------------------------
----------------------------------------------------------------
(Please print name and address)
-----------------------------------------------------------------
Dated: ---------- ---, ----- ------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any
such person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was,
or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.
Dated: ---------- ----, ----- --------------------
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On February 5, 1999, the Board of Directors of Temple-Inland
Inc., a Delaware corporation (the "Company"), declared a dividend
distribution of one-half of a Right for each outstanding share of
Temple-Inland Common Stock to stockholders of record at the close
of business on February 20, 1999. Each Right entitles the
registered holder to purchase from the Company a unit consisting
of one one-hundredth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, par value $1.00 per share (the
"Preferred Stock"), at a price of $200 per Unit (the "Purchase
Price"), subject to adjustment in certain circumstances. The
description and terms of the Rights are set forth in a Rights
Agreement, dated as of February 20, 1999 (the "Rights
Agreement"), between the Company and First Chicago Trust Company
of New York, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no
separate certificates evidencing the Rights (the "Rights
Certificates") will be distributed. The Rights will separate
from the Common Stock and a Distribution Date will occur upon the
earlier of (i) ten business days following a public announcement
that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, beneficial ownership of 20 percent or more of the
outstanding shares of Common Stock (the "Stock Acquisition Date")
or (ii) ten business days (or such later dates as may be
determined by the Board of Directors of the Company) following
the commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 25 percent or
more of such outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with Common Stock certificates and (ii)
the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights
Associated with the Common Stock represented by such certificate.
As soon as practicable following the Distribution Date, Right
Certificates will be mailed to holders of record of Common Stock
as of the close of business on the Distribution Date and,
thereafter, such separate Right Certificates alone will evidence
the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on February 20, 2009,
unless earlier redeemed by the Company as described below.
In the event that (i) a person or group becomes the
beneficial owner of 25 percent or more of the then outstanding
shares of Common Stock (other than pursuant to an offer for all
outstanding shares of Common Stock that at least a majority of
the members of the Board of Directors of the Company who are not
officers of the Company and who are not representatives,
nominees, Affiliates, or Associates of an Acquiring Person
determines to be fair and otherwise in the best interests of the
Company and its stockholders), (ii) the Company is the surviving
corporation in a merger with an Acquiring Person, or any
Associate or Affiliate thereof, and the Common Stock is not
changed or exchanged, (iii) an Acquiring Person, or any Associate
or Affiliate thereof, engages in one or more "self-dealing"
transactions as set forth in the Rights Agreement, or (iv) during
such time as there is an Acquiring Person, an event occurs that
results in the ownership interest of such Acquiring Person or
any Associate of Affiliate thereof, being increased by more that
one percent (e.g., a reverse stock split), each holder of a Right
will thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property, or other
securities of the Company) having a value equal to two times the
exercise price of the Right. Notwithstanding the foregoing,
following the occurrence of any of the events set forth in this
paragraph, any Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by an
Acquiring Person shall immediately become null and void.
However, Rights are not exercisable following the occurrence of
the events set forth above until such time as the Rights are no
longer redeemable by the Company as set forth below.
For example, at an exercise price of $200 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase $400 worth of Common Stock
(of other consideration, as noted above, for $200. Assuming that
the Common Stock had a per share value of $50 at such time, the
holder of each valid Right would be entitled to purchase 8 shares
of Common Stock for $200.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is
not the surviving corporation or the Common Stock is changed or
exchanged (other than a merger that follows an offer described in
clause (i) of the second preceding paragraph) or (ii) more than
50 percent of the Company's assets or earning power is sold or
transferred each holder of a Right (except Rights that previously
have been voided as set forth above) shall thereafter have the
right to receive, upon the exercise thereof, common stock of the
acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and
in the second preceding paragraph are referred to as the
"Triggering Events."
The Purchase Price payable, and the number of Units
of Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination, or reclassification
of, the Preferred Stock, (ii) upon the grant to holders of the
Preferred Stock of certain rights or warrants to subscribe for
Preferred Stock or securities convertible into Preferred Stock at
less than the current market price of the Preferred Stock, or
(iii) upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly
dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least one percent in the Purchase Price. No
fractional Units will be issued upon exercise of the Rights and,
in lieu thereof, a cash payment will be made based on the market
price of the Preferred Stock on the last trading date prior to
the date of exercise.
At any time after the date of the Rights Agreement until ten
days following the Stock Acquisition Date, the Company may redeem
the Rights in whole, but not in part, at a price of $0.01 per
Right (the "Redemption Price"), payable in cash, Common Stock, or
other consideration deemed appropriate by the Board of Directors
of the Company. Immediately upon the action of the Board of
Directors of the Company ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price. After the redemption
period has expired, the Company's right of redemption may be
reinstated if, pursuant to a transaction or series
of transactions not involving the Company, the beneficial
ownership of an Acquiring Person is reduced to ten percent or
less of the outstanding shares of Common Stock.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that a
Triggering Event shall occur.
Other than those provisions relating to the
principal economic terms of the Rights, any of the provisions of
the Rights Agreement may be amended by the Board of Directors of
the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company in order to
cure any ambiguity, defect or inconsistency, to shorten or
lengthen any time period under the Rights Agreement, or in
any other respect that will not adversely affect the
interests of holders of Rights; provided, however, that no
amendment to adjust the time period governing redemption may
be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement of the Company on Form 8-A. A copy of the
Rights Agreement is available free of charge from the Company
upon written request therefor. This summary description of the
Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
