================================================================================
XXXXXX DODGE CORPORATION
and
THE CHASE MANHATTAN BANK
Rights Agent
---------------
RIGHTS AGREEMENT
Dated as of February 5, 1998
================================================================================
TABLE OF CONTENTS
Section Page
------- ----
1. Certain Definitions..................................................................................2
-------------------
2. Appointment of Rights Agent.........................................................................14
---------------------------
3. Issue of Right Certificates.........................................................................14
---------------------------
4. Form of Right Certificates..........................................................................18
--------------------------
5. Countersignature and Registration...................................................................20
---------------------------------
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost
----------------------------------------------------------------------------------------------
or Stolen Right Certificates...................................................................21
---------------------------
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......................................24
-------------------------------------------------------------
8. Cancellation and Destruction of Right Certificates..................................................29
--------------------------------------------------
9. Reservation and Availability of Capital Stock.......................................................30
---------------------------------------------
10. Preferred Shares Record Date.......................................................................34
-----------------------------
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights........................36
---------------------------------------------------------------------------
12. Certificate of Adjusted Purchase Price or Number of Shares.........................................61
-----------------------------------------------------------
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............................62
--------------------------------------------------------------------
14. Fractional Rights and Fractional Shares............................................................69
----------------------------------------
15. Rights of Action...................................................................................73
-----------------
16. Agreement of Right Holders.........................................................................74
---------------------------
17. Right Certificate Holder Not Deemed a Shareholder..................................................76
--------------------------------------------------
18. Concerning the Rights Agent........................................................................77
----------------------------
i
19. Merger or Consolidation or Change of Name of Rights Agent..........................................78
---------------------------------------------------------
20. Duties of Rights Agent.............................................................................80
-----------------------
21. Change of Rights Agent.............................................................................87
-----------------------
22. Issuance of New Right Certificates.................................................................89
-----------------------------------
23. Redemption.........................................................................................91
-----------
24. Exchange...........................................................................................93
---------
25. Notice of Certain Events...........................................................................97
-------------------------
26. Notices............................................................................................99
--------
27. Supplements and Amendments........................................................................101
---------------------------
28. Successors........................................................................................103
-----------
29. Determinations and Actions by the Board of Directors, etc.........................................103
----------------------------------------------------------
30. Benefits of this Agreement........................................................................105
---------------------------
31. Severability......................................................................................105
-------------
32. Governing Law.....................................................................................106
--------------
33. Counterparts......................................................................................107
-------------
34. Descriptive Headings..............................................................................107
---------------------
Exhibit A - Certificate of Amendment
Exhibit B - Form of Right Certificate
Exhibit C - Form of Summary of Rights
ii
RIGHTS AGREEMENT
----------------
THIS RIGHTS AGREEMENT, dated as of February 5, 1998 (the
"Agreement"), between Xxxxxx Dodge Corporation, a New York corporation (the
"Company"), and The Chase Manhattan Bank (the "Rights Agent"),
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one Right (a "Right" and collectively the "Rights")
for each Common Share, par value $6.25 per share, of the Company outstanding at
the Close of Business (as hereinafter defined) on February 24, 1998 (the "Record
Date"), each Right representing the right to purchase one two-hundredth
(1/200th) of a Series A Junior Participating Cumulative Preferred Share, par
value $1.00 per share, of the Company having the rights and preferences set
forth in the form of Certificate of Amendment attached hereto as Exhibit A, and
has further authorized the issuance of one Right with respect to each Common
Share of the Company that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Expiration Date and the Final
Expiration Date (as such terms are hereinafter defined);
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) "Act" shall have the meaning set forth in Section 9(b).
(b) "Acquiring Person" shall mean any Person who constitutes
an "Interested Shareholder" as defined in the NYBCL with respect to the
Company, provided that for purposes of this Agreement, those Persons
excluded from the definition of "Beneficial Owner" pursuant to this
Agreement shall not, by virtue of such beneficial ownership, be deemed
to be Interested Shareholders, so long as such persons are not
otherwise Interested Shareholders as defined in the NYBCL with respect
to the Company, and provided further that the term "Acquiring Person"
shall not include any Exempt Person.
Notwithstanding the foregoing:
(i) no Person shall become an "Acquiring Person" as
the result of an acquisition of Common Shares by the Company
which, by reducing the number of Common Shares outstanding,
increases the proportionate number of shares Beneficially
Owned by such Person to a level that would constitute such
Person an Interested Shareholder under the NYBCL, provided,
however, that if a Person shall become an Interested
Shareholder by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the
Company, then such Person shall be deemed to be an "Acquiring
Person" unless, upon becoming the Beneficial Owner of such
additional shares of Common Stock of the Company, such Person
is not then an Interested Shareholder;
(ii) if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be
an "Acquiring Person" has become such inadvertently
(including, without limitation, because (A) such Person was
unaware that he or it Beneficially Owned a percentage of
Common Shares that would otherwise cause such Person to be an
"Acquiring Person" or (B) such Person was aware of the extent
of his or its Beneficial Ownership but had no actual knowledge
of the consequences of such Beneficial Ownership under this
Agreement) and without any intention of changing or
influencing control of the Company, and if such Person as
promptly as practicable has divested or divests himself or
itself of Beneficial Ownership of a sufficient number of
Common Shares so that such Person would no longer be an
"Acquiring Person", then such Person shall not be deemed to be
or to have become an "Acquiring Person" for any purposes of
this Agreement; and
(iii) no Person shall become an "Acquiring Person" by
virtue of beneficial ownership of Common Shares of the Company
by any Affiliate and/or Associate of such Person, which
Affiliate and/or Associate is deemed to be an Affiliate and/or
Associate of such Person solely by reason of such Affiliate
and/or Associate being a director or officer of the Company.
(c) "Act" shall have the meaning set forth in Section 9(b)
hereof.
(d) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii).
(e) "Agreement" shall have the meaning set forth in the first
paragraph hereof.
2
(f) "Affiliate" and "Associate", when used with reference to
any Person, shall have the respective meanings ascribed to such terms
in Section 912 of the NYBCL.
(g) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities if such Person
constitutes with respect to such securities a "Beneficial Owner" as
defined in Section 912 of the NYBCL; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own,
(i) any security as a result of having the right to vote such security
pursuant to any agreement, arrangement or understanding (whether or not
in writing) if the agreement, arrangement or understanding to vote such
security (A) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (B) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report), or (ii) 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.
(h) "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.
(i) "Certificate of Amendment" shall mean the Certificate of
Amendment amending the Certificate of Incorporation of the Company by
the addition of a provision stating the number, designation, relative
rights, preferences and limitations of the Preferred Shares, a copy of
which is attached hereto as Exhibit A.
(j) "Close of Business" on any given date shall mean 5:00
P.M., New York, New York time, on such date; provided, however, that if
such date is not a Business Day, it shall mean 5:00 P.M., New York, New
York time, on the next succeeding Business Day.
(k) "Common Shares" when used with reference to the Company
shall mean the Common Shares, par value $6.25 per share, of the
Company. "Common Shares" when used with reference to any Person other
than the Company which is organized in corporate form shall mean the
capital stock with the greatest voting power, or the equity securities
or other equity interest having power to control or direct the
management, of such Person, or, if such Person is a Subsidiary of
another Person, the capital stock with the greatest voting power of the
Person which ultimately controls such first-mentioned Person. "Common
Shares" when used with reference to any Person which is not organized
in corporate form shall mean units of beneficial interest which (i)
shall represent the right to participate generally in the profits and
losses of such Person (including, without limitation, any flow-through
tax benefits resulting from an ownership interest in such Person) and
which (ii) shall be entitled to exercise the greatest voting power of
such Person or, in the case of a limited partnership, shall have the
power to remove the general partner or partners.
(l) "Common Share Equivalents" shall have the meaning set
forth in Section 11(a)(iii).
(m) "Company" shall have the meaning set forth in the first
paragraph of this Agreement.
(n) "Current Market Price" shall have the meaning set forth in
Section 11(d).
(o) "Current Value" shall have the meaning set forth in
Section 11(a)(iii).
(p) "Distribution Date" shall have the meaning set forth in
Section 3(a).
(q) "Equivalent Preference Shares" shall have the meaning set
forth in Section 11(b).
(r) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, as in effect from time to time .
3
(s) "Exempt Person" means the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any subsidiary of
the Company, or any Person organized, appointed or established by the
Company or such Subsidiary as a fiduciary for or pursuant to the terms
of any such employee benefit plan or for the purpose of funding any
such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company.
(t) "Expiration Date" shall have the meaning set forth in
Section 7(a).
(u) "Final Expiration Date" shall have the meaning set forth
in Section 7(a).
(v) "NASDAQ" shall have the meaning set forth in Section
11(d)(i).
(w) "NYBCL" shall mean the New York Business Corporation Law
as in effect from time to time.
(x) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(y) "Preferred Shares" shall mean Series A Junior
Participating Cumulative Preferred Shares, par value $1.00 per share,
of the Company, having the relative rights, preferences and limitations
set forth in the Certificate of Amendment, and, to the extent there are
not a sufficient number of Series A Junior Participating Cumulative
Preferred Shares authorized to permit the full exercise of the then
outstanding Rights, any other series of preferred shares of the Company
designated for such purpose by the Board of Directors of the Company
containing terms substantially similar to the terms of the Series A
Junior Participating Cumulative Preferred Shares.
(z) "Principal Party" shall have the meaning set forth in
Section 13(b).
(aa) "Purchase Price" shall have the meaning set forth in
Section 4(a).
(bb) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(cc) "Redemption Price" shall have the meaning set forth in
Section 23(a).
4
(dd) "Right" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(ee) "Right Certificate" shall have the meaning set forth in
Section 3(a).
(ff) "Rights Agent" shall have the meaning set forth in the
first paragraph of this Agreement.
(gg) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii).
(hh) "Section 13 Event" shall have the meaning set forth in
Section 13(a).
(ii) "Spread" shall have the meaning set forth in Section
11(a)(iii).
(jj) "Stock Acquisition Time" shall mean the time of
occurrence of whichever of the following first occurs: (i) the first
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
of the Exchange Act) by the Company or an Acquiring Person that the
Acquiring Person has become such, or (ii) the communication to the
Company (including, without limitation, to the directors of the
Company) of any notice (including, without limitation, any written
consent or notice related thereto) from an Acquiring Person indicating
or reflecting that the Acquiring Person has become such.
(kk) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions are at the time beneficially
owned, directly or indirectly, by such Person or otherwise controlled
by such Person.
(ll) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii).
(mm) "Summary of Rights" shall have the meaning set forth in
Section 3(b).
(nn) "Trading Day" shall have the meaning set forth in Section
11(d).
5
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company 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. Any actions which may be taken by the Rights
Agent pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent.
Section 3. Issue of Right Certificates.
(a) Until the earlier of the Close of Business on (i) the
tenth day after the date on which the Stock Acquisition Time occurs, or (ii) the
tenth Business Day (or such specified or unspecified later date as may be
determined by action of the Board of Directors of the Company prior to such time
as any Person becomes an Acquiring Person) after the commencement by any Person
(other than an Exempt Person) of, or the first public announcement of the
intention of any Person (other than an Exempt Person) to commence (which
intention to commence remains in effect for five Business Days after such
announcement), a tender or exchange offer for an amount of Common Shares of the
Company which, together with the Common Shares already owned by such Person,
would, upon consummation thereof, result in such person becoming an Acquiring
Person (including any such date which is after the date of this Agreement and
prior to the issuance of the Rights) (the earlier of such dates described in
clauses (i) and (ii) above 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 Common Shares registered in the names of
the holders of Common Shares (which certificates for Common Shares shall be
deemed also to be certificates for Rights) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of the underlying Common
Shares. 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 Common Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held, subject to adjustment as
provided herein and to the provisions of Section 14(a). As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form attached hereto as Exhibit C (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the earlier of the
Distribution Date or the Expiration Date, the Rights will be evidenced by such
certificates for Common Shares registered in the names of the holders of Common
Shares with a copy of the Summary of Rights attached thereto. Until the earliest
of the Distribution Date, the Expiration Date and the Final Expiration Date, the
surrender for transfer of any of the certificates for Common Shares outstanding
on the Record Date, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate.
(c) Certificates issued by the Company for Common Shares
(whether upon transfer of outstanding Common Stock, original issuance or
disposition from the Company's treasury) after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date and the Final Expiration
Date shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
6
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Xxxxxx Dodge
Corporation (the "Corporation") and The Chase Manhattan Bank, dated as
of February 5, 1998, and as it may be amended from time to time (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive
offices of the Corporation. 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
Corporation will mail to the holder of this certificate a copy of the
Rights Agreement without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to an Acquiring Person or any Associate or
Affiliate thereof (as such terms are defined in the Rights Agreement)
may be null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificates.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares, certification and assignment to
be printed on the reverse thereof) shall be substantially in the form set forth
in Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11 and 22, the Right Certificates,
whenever distributed, which are distributed in respect of Common Shares which
were issued and outstanding as of the Record Date, shall be dated as of the
Record Date, and all Right Certificates which are distributed in respect of
other Common Shares shall be dated as of the respective dates of issuance of
such Common Shares, and in each such case on their face shall entitle the
holders thereof to purchase such number of one two-hundredths of a Preferred
Share as shall be set forth therein at the price per one two-hundredth of a
Preferred Share set forth therein (the "Purchase Price"), but the number and
type of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided in this Agreement. 7
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company manually or by facsimile signature by the Chairman of the Board, the
Chief Executive Officer, the President or any Vice President and also by the
Secretary or any Assistant Secretary, either manually or by facsimile signature.
The Right Certificates shall be countersigned by the Rights Agent manually 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 Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office in New York, New York, books
for registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date and certificate number of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e) and 14, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the earlier of the Expiration Date and the Final
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
Preferred Shares (or other securities, cash, and/or other assets, as the case
may be) as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged, with the
form of assignment and certificate appropriately executed, at the principal
office of the Rights Agent in New York, New York. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate or Right Certificates until
the registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Right Certificate or Right
Certificates 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 Sections 7(e) and 14, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment from the holders of Right
Certificates 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 any Right Certificates. 8
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, if requested by
the Company, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will execute and
deliver a new Right Certificate of like tenor to the Rights Agent for
counter-signature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to Section 7(e), the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent in New York, New York, together with
payment of the Purchase Price for each one two-hundredth of a Preferred Share as
to which the Rights are exercised, at or prior to the earliest of (i) the Close
of Business on February 24, 2008 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23, (iii) the time at which
the Rights are exchanged as provided in Section 24, or (iv) the time at which
the Rights expire pursuant to Section 13(d) (the earliest of such times being
herein referred to as the "Expiration Date").
(b) The Purchase Price for each one two-hundredth of a
Preferred Share issued pursuant to the exercise of a Right shall initially be
$210, shall be subject to adjustment from time to time as provided in Sections
11 and 13 and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase and certificate duly executed, accompanied by payment (by certified
check or bank draft payable to the order of the Company) of the Purchase Price
for the Preferred Shares (or other shares, securities, cash or other assets, as
the case may be) to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of the Rights pursuant hereto in cash, or
by certified check or bank draft payable to the order of the Company, the Rights
Agent shall, subject to Section 20(k), (i)(A) promptly requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent) certificates for the number of Preferred Shares 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 Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing interests in such number of one two-hundredths
of a Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby directs the depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14, (iii) promptly after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder, and (iv) when appropriate, after
receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
9
(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 any such Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after such
Acquiring Person becomes such, or (iii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with such Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
such Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect 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 ensure that the
provisions of this Section 7(e) are complied with, but shall have no liability
to any holder of Right Certificates or any other Person as a result of its
failure to make any determination with respect to an Acquiring Person or any of
its respective Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Right
Certificate upon the occurrence of any purported transfer or exercise as set
forth in this Section 7 unless such registered holder shall have (i) completed
and signed the certificate following the form of assignment or election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such assignment or exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to 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
Right 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 Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right 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 Preferred Shares
or any authorized and issued Preferred Shares held in its treasury (and will use
its best efforts, following the occurrence of a Section 11(a)(ii) Event, to
cause to be reserved and kept available out of its authorized and unissued
Common Shares and/or other securities or out of its authorized and issued Common
Shares and/or other securities held in its treasury), the number of Preferred
Shares (and, following the occurrence of a Section 11(a)(ii) Event, Common
Shares and/or other securities) that will be sufficient to permit the exercise
in full of all outstanding Rights.
10
(b) 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 or a Section 13 Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with this Agreement, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the 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 Expiration Date. The Company will also take such action
as may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability of
the Rights. The Company may, acting by resolution of its Board of Directors,
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(b), 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. 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.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all two-hundredths of a Preferred
Share (and, following the occurrence of a Section 11(a)(ii) Event or a Section
13 Event, Common Shares and/or other securities) delivered (or evidenced by
depositary receipts 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 shares.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and other
similar charges which may be payable in respect of the issuance or delivery of
the Right Certificates or of any Preferred Shares or depositary receipts (or
Common Shares 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
which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of certificates
or depositary receipts for a number of one-hundredths of a Preferred Share (or
Common Shares and/or other securities, as the case may be), in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or deliver any certificates for Preferred
Shares (or Common Shares and/or other securities, as the case may be) or
depositary receipts for Preferred Shares upon the exercise of any Rights until
any such tax or other similar charge shall have been paid (any such tax or other
similar charge being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
11
Section 10. Preferred Shares Record Date. Each person in whose
name any certificate for a number of one two-hundredths of a Preferred Share (or
Common Shares 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 Preferred (or Common Shares and/or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares (or Common Shares 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 and
otherwise) on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Shares (or Common Shares 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 Right Certificate, as such,
shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any meetings or other proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares,
or fractions thereof, covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares into a greater
number of shares, (C) combine or consolidate the outstanding Preferred Shares
into a smaller number of shares, or (D) issue any shares of its capital stock in
a reclassification of the Preferred Shares (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in Section
7(e) and this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of Preferred Shares or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of Preferred Shares or capital stock, as
the case may be, which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer books of the Company
were open, such holder would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification.
If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii), 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).
12
(ii) In the event (a "Section 11(a)(ii) Event") that any Person,
alone or together with its Affiliates and Associates, shall become an Acquiring
Person, then each holder of a Right (except as provided below and in Section
7(e)), shall thereafter have the right to receive, upon exercise thereof
following the Distribution Date at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of two-hundredths of a
Preferred Share, such number of Common Shares of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the then
number of two-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of such Section 11(a)(ii) Event,
whether or not such Right was then exercisable, and (y) dividing that product
(which, following such first occurrence, shall thereafter be adjusted as
appropriate in accordance with Section 11(f) hereof and, as so adjusted, shall
be referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price per Common Share of the
Company (determined pursuant to Section 11(d)) on the date of the occurrence of
such Section 11(a)(ii) Event (such number of shares being hereinafter referred
to as the "Adjustment Shares"). The Company shall notify the Rights Agent as to
any Persons who are deemed by the Company to be Acquiring Persons or Associates,
Affiliates or transferees (as described in subparagraphs (ii) and (iii) of
Section 7(e)) of such Persons and shall identify any Rights pertaining thereto.
(iii) In lieu of issuing Common Shares of the Company in accordance
with Section 11(a)(ii), the Company, acting by resolution of its Board of
Directors, may (and, in the event that the number of Common Shares which are
authorized by the Company's 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
Section 11(a)(ii), the Company, acting by resolution of its Board of Directors,
shall): (A) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value"), over (2) the
Purchase Price attributable to each Right (such excess, the "Spread") and (B)
with respect to each Right (subject to Section 7(e)), make adequate provision to
substitute for all or any part of the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Preferred Shares or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which the Board of
Directors of the Company has determined to have the same value as Common Shares
of the Company (such Preferred Shares or shares or units of preferred stock
hereinafter called "Common Share Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, which, when
combined with the Adjustment Shares (if any) to be issued, has an aggregate
value equal to the Current Value, where such aggregate value has been determined
by action of 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 30 days following
the first occurrence of a Section 11(a)(ii) Event, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares of the Company (to the
extent available) and then, if necessary, cash, securities and/or assets, that
in the aggregate have a value equal to the Spread. If, after the occurrence of a
Section 11(a)(ii) Event, the number of Common Shares that are authorized by the
Company's Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit exercise in full of the Rights in accordance with Section 11(a)(ii)
and the Company, acting by resolution of its Board of Directors, shall determine
in good faith that it is likely that sufficient additional Common Shares could
be authorized for issuance upon exercise in full of the Rights, the 30 day
period set forth above may be extended to the extent necessary, but not more
than 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 is to be taken pursuant to the
terms of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e), that such action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder approval for the
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to the first sentence of this Section
11(a)(iii) and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Shares shall be the Current
Market Price per Common Share (as determined pursuant to Section 11(d)) on the
date of the first occurrence of the Section 11(a)(ii) Event, and the per share
or per unit value of any Common Share Equivalents shall be deemed to equal the
Current Market Price per Common Share of the Company on such date.
13
(b) In the event that the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("Equivalent
Preference Shares")) or securities convertible into Preferred Shares or
Equivalent Preference Shares at a price per Preferred Share or Equivalent
Preference Share (or having a conversion price per share, if a security
convertible into Preferred Shares or Equivalent Preference Shares) less than the
Current Market Price per Preferred Share (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or Equivalent Preference Shares which the aggregate
offering price of the total number of such shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or Equivalent Preference
Shares 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 in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b)), 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 per Preferred Share on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share, and the denominator of which shall be such Current Market Price
per Preferred Share. Such adjustments shall be made successively whenever such a
record date is fixed, and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
14
(d)(i) For the purpose of any computation hereunder, the
"Current Market Price" per Common Share on any date shall be deemed to be the
average of the daily closing prices per such Common Share for the 30 consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the Current Market Price per Common Share is determined during a
period following the announcement by the issuer of such Common Shares of (A) a
dividend or distribution on such Common Shares payable in such Common Shares or
securities convertible into such Common Shares or (B) any subdivision,
combination or reclassification of such Common Shares, and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, as the case may be, then, and in each such case, the "Current
Market Price" shall be appropriately adjusted to take into account the
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the Common
Shares are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
Common Shares selected by the Company, acting by resolution of the Board of
Directors of the Company, or, if on any such date no market maker is making a
market in Common Shares, the fair value of such shares on such date as
determined in good faith by the Company, acting by resolution of the Board of
Directors of the Company (which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes). The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Shares are listed or admitted to trading is open
for the transaction of business or, if the Common Shares are not listed or
admitted to trading on any national securities exchange but are quoted on
NASDAQ, a day on which NASDAQ is in operation or if the Common Shares are
neither listed or admitted to trading on any national securities exchange nor
quoted on NASDAQ, a Business Day. (ii) For the purpose of any computation
hereunder, the "Current Market Price" per Preferred Share shall be determined in
the same manner as set forth for the Common Shares in Section 11(d)(i) (other
than the last clause of the second sentence thereof). If the Current Market
Price per Preferred Share cannot be determined in the manner provided above or
if the Preferred Shares are not publicly held or listed or traded in a manner
described in Section 11(d)(i), the "Current Market Price" per Preferred Share
shall be conclusively deemed to be an amount equal to 200 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Shares occurring after the date of
this Agreement) multiplied by the Current Market Price per Common Share. If
neither the Common Shares nor the Preferred Shares is publicly held or so listed
or traded, the "Current Market Price" per Preferred Share shall mean the fair
value per share as determined in good faith by the Company, acting by resolution
of its Board of Directors, whose determination shall be described in a statement
filed with Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "Current Market Price" of one two-hundredth of a
Preferred Share shall be equal to the "Current Market Price" of one Preferred
Share divided by 200.
15
(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 1% in such price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a Common Share or other share or the
nearest one-millionth of a Preferred Share, as the case may be. Notwithstanding
the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the Purchase Price and the number of such other
shares so receivable upon exercise of any Right and the number of Rights
outstanding shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j),
(k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Shares shall apply on like terms to any such other shares,
provided, however, that the Company shall not be liable for its inability or
failure to reserve and keep available for issuance upon exercise of the Rights
pursuant to Section 11(a)(ii) a number of Common Shares greater than the number
then authorized by the Certificate of Incorporation of the Company but not
outstanding or reserved for any other purpose.
(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 two-hundredths of a
Preferred Share 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 Section 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
two-hundredths of a Preferred Share (calculated to the nearest one-millionth of
a Preferred Share) obtained by (i) multiplying (A) the number of one
two-hundredths of a Preferred Share covered by a Right immediately prior to such
adjustment of the Purchase Price by (B) 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.
16
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one two-hundredths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one two-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest 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 Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14, 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
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and 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 Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares, or fraction thereof, issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per one two-hundredth of a Preferred
Share and the number of shares which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the one
two-hundredths of a Preferred Share issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
17
(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 issuing to the holder of any Right exercised after such record date
the Preferred Shares, or a fraction thereof, and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the Preferred Shares 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, acting by resolution of its Board of Directors,
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent
that it in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Shares, any issuance wholly for
cash of any Preferred Shares at less than the current market price, any issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, any stock dividends or
any issuance of rights, options or warrants referred to herein above in this
Section 11, hereafter made by the Company to holders of its Preferred Shares
shall not be taxable to such shareholders.
(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)), (ii) merge with or into any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o)), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction or
in a series of related transactions, assets, cash flow or earning power
aggregating more than 50% of the assets, cash flow 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)), 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) 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, Section 24 or
Section 27, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
18
(p) Anything in this Agreement to the contrary
notwithstanding, in the event the Company shall at any time after the date of
this Agreement and prior to the Distribution Date (i) declare or pay any
dividend on the Common Shares of the Company payable in such Common Shares or
(ii) subdivide the outstanding Common Shares of the Company into a greater
number of shares (by reclassification or otherwise than by payment of dividends
in such Common Shares) or (iii) combine or consolidate the outstanding Common
Shares of the Company into a smaller number of shares, then in any such case,
(x) the number of one two-hundredths of a Preferred Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying the
number of one two-hundredths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares of the Company outstanding immediately before such event and the
denominator of which is the number of such Common Shares outstanding immediately
after such event and (y) action shall be taken such that each Common Share of
the Company outstanding immediately after such event shall have issued with
respect to it that number of Rights which each such Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(p) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected. If an event occurs that would require an adjustment under Section
11(a)(ii) and this Section 11(p), the adjustments provided for in this Section
11(p) shall be in addition and prior to any adjustment required pursuant to
Section 11(a)(ii).
Section 12 Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13, 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 Common Shares
and Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or if prior to the Distribution
Date, to each holder of a certificate representing Common Shares) in accordance
with Section 25 of this Agreement. Notwithstanding the foregoing sentence, the
failure of the Company to make such certificates or give such notice shall not
affect the validity or the force or effect of the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained. Any adjustment to be made
pursuant to Sections 11 and 13 shall be effective as of the date of the event
giving rise to such adjustment.
19
Section 13 Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event (a "Section 13 Event") that, following the
Stock Acquisition Time, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a wholly
owned Subsidiary of the Company in a transaction that complies with Section
11(o)) and the Company shall not be the surviving or continuing corporation of
such merger, consolidation or combination, (y) any Person (other than a wholly
owned Subsidiary of the Company in a transaction that complies with Section
11(o)) shall consolidate with the Company, or merge with and into the Company,
and the Company shall be the surviving or continuing corporation of such merger
or consolidation and, in connection therewith, all or part of the Common Shares
shall be changed into or exchanged for stock or other securities of the Company
or of any 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 or more transactions, assets, cash flow or earning power
aggregating more than 50% of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole and calculated on the basis of
the Company's most recent regularly prepared financial statement) to any other
Person or Persons (other than the Company or any wholly owned Subsidiary of the
Company in one or more transactions each of which complies with Section 11(o)),
then, and in each such case (except as provided in Section 13(d)), proper
provision shall be made so that (i) each holder of a Right (except as otherwise
provided in Section 7(e)) shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradable Common Shares of the Principal Party (as
hereinafter defined), not subject to any liens, encumbrances, rights of call,
rights of first refusal or other adverse claims, as shall be equal to the result
obtained by dividing the then current Purchase Price by 50% of the Current
Market Price per Common Share of such Principal Party on the date of
consummation of such merger, consolidation, sale or transfer (provided that the
Purchase Price and the number of shares of Common Stock of such Principal Party
so receivable upon exercise of a Right shall, from and after such Section 13
Event, be subject to further adjustment in accordance with Section 11(f) hereof
to reflect any events occurring in respect of the Common Stock of such Principal
Party after the occurrence of such Section 13 Event); (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares in
accordance with Section 9) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be possible, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) shall be of no effect following the first occurrence of any
Section 13 Event.
(b) "Principal Party" shall mean:
20
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a): (A) the Person that is the
issuer of any securities into which Common Shares of the Company are
converted in such merger or consolidation, or (B) if no securities are
so issued, (x) the Person that is the other party to such merger, and
if such Person survives such merger, or (y) if the Person that is the
other party to the merger does not survive the merger, the Person that
does survive the merger (including the Company if it survives) or (z)
the Person resulting from the 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, cash flow or earning
power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person is not at any time and has not been continuously over the preceding
twelve month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common Shares of
which are and have been so registered, "Principal Party" shall refer to such
other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized Common
Shares which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement containing the provisions set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any such Section 13 Event, 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) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter, subject to
Section 7(e) hereof, become exercisable in the manner described in Section
13(a).
(d) The Company covenants and agrees that it will not, after
the Stock Acquisition Time, engage in any Sec-
21
tion 13 Event if at the time of or after such event there are any charter or
by-law provisions or any rights, warrants or other instruments outstanding or
any other action taken which would diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
Section 14 Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractions of Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price 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 Company, acting by resolution of its Board of
Directors. 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 Company, acting by resolution of its Board of Directors, shall be used.
22
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
two-hundredths of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional shares (other than fractions
which are integral multiples of one two-hundredths of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one two-hundredths of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that the
holders of depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares. In lieu of fractional shares which are not integral multiples of one
two-hundredths of a Preferred Share, the Company may pay to the registered
holders of Right Certificates at the time such Right Certificates are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one Preferred Share. For purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section
11(d)(ii)) for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Section 11(a)(ii) Event or a
Section 13 Event, the Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Company may
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this Section 14(c),
the current market value of one Common Share of the Company shall be the closing
price of one Common Share of the Company (as determined pursuant to Section
11(d)(i)) 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.
23
Section 15 Rights of Action. All rights of action in respect
of this Agreement, except the rights of action vested in the Rights Agent
pursuant to Section 18, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of Common Shares); and any registered holder of any Right Certificate (or, prior
to the Distribution Date, of Common Shares), without the consent of the Rights
Agent or of any holder of any other Right Certificate (or, prior to the
Distribution Date, of Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations hereunder, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this Agreement.
Section 16 Agreement of Right Holders. Every holder of a Right
by accepting such Right consents and agrees with the Company and with every
other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for Common Shares registered in the name
of the holders of such shares (which certificates for Common Shares
shall also constitute certificates for Rights) and each Right will be
transferable only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates duly completed and fully executed;
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Share certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall 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.
24
Section 17 Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right or Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of one two-hundredth
of a Preferred Share or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer
upon the holder of any Right or Right Certificate, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions 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 demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
by the Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred Shares or Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
25
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. The purchase of all or substantially all of the
Rights Agent's assets employed in the performance of transfer agent activities
shall be deemed a merger or consolidation for purposes of this Section 19. In
case at the time such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20 Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
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 an
Acquiring Person and the determination of the Current Market Price per
Preferred Share and Common Share) 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 Chief Executive
Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except as to its countersignature
thereof) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
26
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any adjustment required under the provisions of Sections 11 or 13 or
responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment), nor
shall it be responsible for any determination by the Board of Directors
of the Company of the Current Market Price of the Rights or Preferred
Shares or Common Shares, nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or
reservation of any Common Shares or Preferred Shares or other
securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares or Common Shares or
other securities will, when 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 Chief Executive Officer,
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, except it may not act for an
Acquiring Person in an investment banking capacity, or otherwise assist
an Acquiring Person in ways hostile to the Company, without the consent
of the Company.
27
(i) The Rights Agent may execute and exercise any of the
rights and 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, omission,
default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company or to holders of the Rights resulting from any
such act, omission, default, neglect or misconduct, provided 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 Right 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 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and Preferred Shares by registered,
certified or express mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares and Preferred Shares by registered, certified or express mail, and
to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States or of any state of the United States, in good standing,
which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent 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 Shares and Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
28
Section 22 Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by resolution of its Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or class
of shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities, notes or debentures
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 Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right Certificates
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 Right Certificates
would be issued, and (ii) no such Right Certificates 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.
(a) The Company may, by resolution of its Board of Directors,
at its option, at any time prior to the earlier of (x) the Stock Acquisition
Time or (y) the Close of Business on the Final Expiration Date, redeem all but
not less than all of the then outstanding Rights at a redemption price of $0.01
per Right (payable in cash, Common Shares (based on the Current Market Price of
the Common Shares at the time of redemption) or any other form of consideration
deemed appropriate by the Board of Directors of the Company), 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").
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights (or at such time subsequent to
such action as the Board of Directors may determine), 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. Within 10 days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase any Rights
at any time in any manner other than that specifically set forth in this Section
23 or Section 24, and other than in connection with the repurchase of Common
Shares of the Company prior to the Distribution Date.
29
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e)) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24, evidence of which shall have been filed with the Rights Agent,
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company shall promptly mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e)) held
by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Shares (or any other series of preferred
shares of the Company containing terms substantially similar to the terms of the
Preferred Shares) for some or all of the Common Shares exchangeable for Rights,
at the initial rate of one two-hundredth of a Preferred Share (or of such other
series of preferred shares of the Company) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share (or of such other series of preferred shares of the Company)
delivered in lieu of each Common Share shall have the same voting rights as one
Common Share.
(d) In the event that there shall not be sufficient Common
Shares or Preferred Shares (or any other series of preferred shares of the
Company containing terms substantially similar to the terms of the Preferred
Shares) issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
Common Shares or Preferred Shares (or such other series of preferred shares of
the Company) for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (d), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
30
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly dividend out of earnings or retained earnings of the Company
at a rate not in excess of 125% of the rate of the last regular quarterly cash
dividend theretofore paid), or (ii) to offer to the holders of Preferred Shares
options, rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of the Preferred Shares
(other than a reclassification involving only the subdivision of outstanding
Preferred Shares), or (iv) to effect any merger, consolidation or other
combination into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of more than 50% of the assets, cash flow or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other Person, or (v)
to effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right, in accordance
with Section 26, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, merger, consolidation,
combination, sale, transfer, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of Common Shares
and/or Preferred Shares, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above at
least 20 days prior to the record date for determining holders of Preferred
Shares for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of Common Shares and/or Preferred
Shares, whichever shall be the earlier. The failure to give notice required by
this Section 25 or any defect therein shall not affect the legality or validity
of the action taken by the Company or the vote upon any such action.
(b In case any of the events set forth in Section 11(a)(ii) or
Section 13(a) of this Agreement shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each holder of a Right
Certificate, to the extent feasible and in accordance with Section 26, 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) or
Section 13(a), and (ii) all references in Section 25(a) to Preferred Shares
shall be deemed thereafter to refer also to Common Shares or other securities
issuable in respect of the Rights.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the 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:
Xxxxxx Dodge Corporation
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The Chase Manhattan Bank
c/o ChaseMellon Shareholders Services, L.L.C.
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
31
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or if prior
to the Distribution Date to each holder of a certificate representing Common
Shares) shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such Right holder (or if prior to the Distribution Date to
such holder of Common Shares) at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Stock
Acquisition Time and subject to the penultimate sentence of this Section 27, the
Company may, by resolution of its Board of Directors, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement in any respect whatsoever (including, without limitation, any
extension of the period in which the Rights may be redeemed) without the
approval of any holders of certificates representing Common Shares of the
Company. From and after the Stock Acquisition Time and subject to the
penultimate sentence of this Section 27, without the approval of any holders of
certificates representing Common Shares of the Company or of Right Certificates,
the Company may, by resolution of its Board of Directors, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder or (iv) to change or
supplement or make any other provisions in any manner which the Company may deem
necessary or desirable, which shall not adversely affect the interests of, or
diminish substantially or eliminate the benefits intended to be afforded by the
Rights to, the holders of Right Certificates (other than an Acquiring Person or
an Affiliate or Associate of any such Person); provided, however, that this
Agreement may not be supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when the Rights may be
redeemed or to modify the ability (or inability) of the Board of Directors of
the Company to redeem the Rights, in either case 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 or the benefits
to the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of any such Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price, the Final Expiration Date, the Purchase
Price or the number of one two-hundredths of a Preferred Share 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
Shares.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
32
Section 29. Determinations and Actions by the Board of
Directors, etc.. For all purposes of this Agreement, any calculation of the
number of Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, shall be made in accordance
with Section 912 of the NYBCL. The Board of Directors of the Company shall have
the exclusive power, authority and discretion to administer this Agreement and
to exercise all rights and powers specifically granted to such Board of
Directors, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including, but
not limited to, a determination to redeem or not redeem the Rights, to amend the
Agreement or to find or to announce publicly that any Person has become an
Acquiring Person). All such actions, calculations, interpretations and
determinations (including, for purposes of clauses (i) and (iii) below, all
omissions with respect to the foregoing) which are done or made by the Board of
Directors of the Company or the Company (i) shall be within the discretion of
the Board of Directors, (ii) shall be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all other
parties, and (iii) shall not subject the Board of Directors of the Company to
any liability to the holders of the Rights and Right Certificates.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, registered holders of the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this 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 shall
be reinstated and shall not expire until the Close of Business on the tenth
Business Day following the date of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New York and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
33
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
XXXXXX DODGE CORPORATION
By /s/ Xxxxxx X. Xxxx
----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and Secretary
THE CHASE MANHATTAN BANK
By /s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
ChaseMellon Shareholder Services,
LLC
34
Exhibit B
---------
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER FEBRUARY 24, 2008 OR EARLIER IF THE BOARD OF DIRECTORS
ORDERS THE REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS
HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH
JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE.
Rights Certificate
XXXXXX DODGE CORPORATION
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 5, 1998, as the same may be amended from time to
time (the "Rights Agreement"), between Xxxxxx Dodge Corporation, a New York
corporation (the "Company"), and The Chase Manhattan Bank (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (New York, New
York time) on February 24, 2008, at the principal office of the Rights Agent, or
its successors as Rights Agent, one two-hundredth of a fully paid nonassessable
Series A Junior Participating Cumulative Preferred Share, par value $1.00 per
share, of the Company (the "Preferred Shares"), at a purchase price of $210 per
one two-hundredth of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
and the Certificate contained therein duly executed. The number of Rights
evidenced by this Right Certificate (and the number of two-hundredths of a
Preferred Share which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per one two-hundredth of a Preferred Share set forth
above, are the number and Purchase Price as of February 24, 1998, based on the
Preferred Shares as constituted at such date.
From and after the first occurrence of a Section 11(a)(ii)
Event (as defined in the Rights Agreement), if the Rights evidenced by this
Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person (or of any Associate
or Affiliate thereof) who becomes a transferee after such Acquiring Person (or
any Associate or Affiliate thereof) becomes such or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of such Acquiring
Person (or of any Associate or Affiliate thereof) who becomes a transferee prior
to or concurrently with such Acquiring Person becoming such, such Rights shall
become null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Section 11(a)(ii) Event.
The Rights evidenced by this Right Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any jurisdiction
where the requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall not have been
obtained or be obtainable.
As provided in the Rights Agreement, the Purchase Price and
the number of one two-hundredths of a Preferred Share or the number and kind of
other securities which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events, including Section 11(a)(ii) Events and
Section 13 Events (as defined in the Rights Agreement).
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, as it may be amended from
time to time, 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 Right 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 principal executive offices of the Company and the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of one two-hundredths of a Preferred Share as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
2
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at a
redemption price of $.01 per Right at any time prior to the earlier of (i) the
Stock Acquisition Time (as defined in the Rights Agreement) and (ii) the close
of business on the Expiration Date (as defined in the Rights Agreement). Subject
to the provisions of the Rights Agreement, the rights evidenced by this Right
Certificate may be exchanged in whole or part for Common Shares or fractional
Preferred Shares (or any other substantially similar series of preferred shares
of the Company).
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one two-hundredth of a Preferred Share, 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.
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 in any respect whatsoever up
until the Stock Acquisition Time and thereafter in certain respects which do not
adversely affect the interests of holders of Right Certificates (other than an
Acquiring Person or the Affiliates or Associates thereof).
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred Shares
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of February 6, 1998.
ATTEST: XXXXXX DODGE CORPORATION
/s/ Xxxxxx X. Xxxx By /s/ Xxxxxxx X. Xxxxxxx
----------------------------- ----------------------------------
Secretary Title: Chairman and CEO
Countersigned:
The Chase Manhattan Bank
By /s/ Xxxxxx X. Xxxxx
---------------------------
Authorized Signatory
4
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________ hereby sells,
assigns and transfers unto _____________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _____________________ Attorney,
to transfer the within Right Certificate on the books of the within named
Company, with full power of substitution.
Dated:_____________, ____
--------------------------
Signature
Signatures Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced
by this Right Certificate are not beneficially owned by an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement); and (2)
after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ]
did not acquire the Rights evidenced by this Right Certificate from any Person
who is, was or subsequently became an Acquiring Person of an Affiliate or
Associate thereof.
---------------------------
Signature
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To Xxxxxx Dodge Corporation:
The undersigned hereby irrevocably elects to exercise
_______________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of: Please insert social
security or other identifying number
----------------------------------------------------------
(Please print name and address)
----------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
----------------------------------------------------------
(Please print name and address)
----------------------------------------------------------
Dated:__________________, ____
6
[Form of Election to Purchase -- continued]
--------------------------
Signature
(Signature must conform in
all respects to name of
holder as specified on the
face of this Right
Certificate.)
Signature Guaranteed:
--------------------------------------------------------------------------------
(To be completed if applicable)
The undersigned hereby certifies that the (1) Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and (2) after due inquiry
and to the best knowledge of the undersigned, it [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person of an Affiliate or Associate thereof.
--------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above in the Forms of
Assignment and Election is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and, in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Rights Certificate.
7
Exhibit C
---------
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
XXXXXX DODGE CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On February 4, 1998, the Board of Directors of Xxxxxx Dodge
Corporation (the "Company") declared a dividend distribution of one Preferred
Share Purchase Right (a "Right") for each outstanding Common Share, par value
$6.25 per share, of the Company (the "Common Shares").
The following is a summary of the terms of the Rights.
Each Right entitles the registered holder to purchase from the
Company one two-hundredth of a Series A Junior Participating Cumulative
Preferred Share, par value $1.00 per share, of the Company (the "Preferred
Shares"), at a price of $ 210 per one two-hundredth of a Preferred Share,
subject to adjustment (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement, dated as of February 5, 1998, as it
may be amended from time to time (the "Rights Agreement"), between the Company
and The Chase Manhattan Bank, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common Share
certificates representing shares then outstanding, and no separate certificates
representing the Rights ("Right Certificates") will be distributed. The Rights
will separate from the Common Shares and a "Distribution Date" will occur upon
the earlier to occur of (i) ten days following the time (the "Stock Acquisition
Time") of a public announcement or notice to the Company that a person or group
of affiliated or associated persons (an "Acquiring Person") acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the
outstanding Common Shares of the Company and (ii) ten business days (or, if
determined by the Board of Directors, a specified or unspecified later date)
following the commencement or announcement of an intention to make a tender
offer or exchange offer which, if successful, would cause the bidder to own 20%
or more of the outstanding Common Shares.
The Rights Agreement provides that, until the Distribution
Date, (i) the Rights will be transferred with and only with the Common Shares,
(ii) new Common Share certificates issued after February 24, 1998, upon transfer
or new issuance of the Common Shares, will contain a notation incorporating the
Rights Agreement by reference and (iii) the surrender for transfer of any of the
Common Share certificates outstanding will also constitute the transfer of the
Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate Right Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right Certificates alone
will evidence the Rights. Except as otherwise determined by the Board of
Directors, only Common Shares issued prior to the Distribution Date will be
issued with Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on February 24, 2008, unless earlier redeemed or
exchanged by the Company as described below.
In the event that, after the Stock Acquisition Time, the
Company is acquired in a merger or other business combination transaction
(except certain transactions with a person who became an Acquiring Person as a
result of a tender offer described in the next succeeding paragraph) or 50% or
more of its assets, cash flow or earning power is sold, proper provision shall
be made so that each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of common shares of the acquiring company which at the time
of such transaction would have a market value (as defined in the Rights
Agreement) of two times the Purchase Price of the Right. In the event that,
after the Stock Acquisition Time, the Company were the surviving corporation of
a merger and its Common Shares were changed or exchanged, proper provision shall
be made so that each holder of a Right will thereafter have the right to receive
upon exercise that number of common shares of the Company having a market value
of two times the exercise price of the Right.
In the event that a person or group becomes an Acquiring
Person, each holder of a Right (other than the Acquiring Person) will thereafter
have the right to receive upon exercise that number of Common Shares (or, in
certain circumstances, cash, a reduction in the Purchase Price, Preferred
Shares, other equity securities of the Company, debt securities of the Company,
other property or a combination thereof) having a market value (as defined in
the Rights Agreement) of two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person (or an affiliate, associate or transferee thereof) will be null
and void. A person will not be an Acquiring Person if the Board of Directors of
the Company determines that such person or group became an Acquiring Person
inadvertently and such person or group promptly divests itself of a sufficient
number of Common Shares so that such person or group is no longer an Acquiring
Person.
2
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of Preferred Shares of certain
rights or warrants to subscribe for Preferred Shares or convertible securities
at less than the current market price of Preferred Shares or (iii) upon the
distribution to holders of Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends or dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
referred to above). The number of Rights and number of Preferred Shares issuable
upon the exercise of each Right are also subject to adjustment in the event of a
stock split, combination or stock dividend on the Common Shares.
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Preferred Shares will be issued (other
than fractions which are integral multiples of one two-hundredth of a Preferred
Share which may, upon the election of the Company, be evidenced by depositary
receipts) and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading date prior to the date
of exercise.
At any time prior to the earlier of the Stock Acquisition Time
and the Expiration Date (as defined in the Rights Agreement), the Board of
Directors may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"). Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01 Redemption
Price.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such Person of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights beneficially owned by such Person which have become void), in whole
or part, at an exchange ratio of one Common Share per Right (subject to
adjustment). The Company, at its option, may substitute one two-hundredth of a
Preferred Share (or other series of substantially similar preferred shares of
the Company) for each Common Share to be exchanged.
Each Preferred Share purchasable upon exercise of the Rights
will have a minimum preferential dividend of $10 per year, but will be entitled
to receive, in the aggregate, a dividend of 200 times the dividend declared on
the Common Shares. In the event of liquidation, the holders of the Preferred
Shares will be entitled to receive a minimum liquidation payment of $10 per
share, but will be entitled to receive an aggregate liquidation payment equal to
200 times the payment made per Common Share. Each Preferred Share will have 200
votes, voting together with the Common Shares. In the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 200 times the amount and type of
consideration received per Common Share. The rights of the Preferred Shares as
to dividends and liquidation, and in the event of mergers and consolidations,
are protected by anti-dilution provisions.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, other than rights resulting from
such holder's ownership of Common Shares, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to stockholders or to the Company, stockholders may, depending
upon the circumstances, recognize taxable income in the event that the Rights
become exercisable for Common Shares (or other consideration) of the Company or
for common shares of the acquiring company as set forth above.
3
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 prior to the Stock Acquisition Time. After
such time, the provisions of the Rights Agreement may be amended by the Board of
Directors in order to cure any ambiguity, to correct or supplement defective or
inconsistent provisions, to shorten or lengthen any time period under the Rights
Agreement, to make changes which do not adversely affect the interests of the
holders of Rights (excluding the interests of any Acquiring Person) or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Form 8-A dated February 6,
1998. Copies of the Rights Agreement are available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, as it may
be amended from time to time, which is hereby incorporated herein by reference.
4
