Exhibit 10.12
SEQUA CORPORATION
and
THE BANK OF NEW YORK, as Rights Agent
RIGHTS AGREEMENT
Dated as of October 30, 2000
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 8
Section 3. Issue of Right Certificates 9
Section 4. Form of Right Certificates 11
Section 5. Countersignature and Registration 12
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates 13
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 15
Section 8. Cancellation and Destruction of
Right Certificates 17
Section 9. Reservation and Availability of Shares
of Capital Stock 18
Section 10. Junior Preferred Stock Record Date 20
Section 11. Adjustment of Purchase Price, Number
of Shares or Number of Rights 21
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares 32
Section 13. Fractional Rights and Fractional Shares 33
Section 14. Rights of Action 34
Section 15. Agreement of Right Holders 35
Section 16. Right Certificate Holder Not Deemed
a Stockholder 36
Section 17. Concerning the Rights Agent 36
Section 18. Merger or Consolidation or Change of
Name of Rights Agent 37
Section 19. Duties of Rights Agent 38
Section 20. Change of Rights Agent 42
Section 21. Issuance of New Right Certificates 43
Section 22. Redemption and Termination 43
Section 23. Exchange 45
Section 24. Notice of Certain Events 47
Section 25. Notices 48
Section 26. Supplements and Amendments 48
Section 27. Successors 49
Section 28. Determinations and Actions by the
Board of Directors 49
Section 29. Benefits of This Agreement 50
Section 30. Severability 50
Section 31. Governing Law 50
Section 32. Counterparts 51
Section 33. Descriptive Headings 51
Exhibit A - Certificate of Designation A-1
Exhibit B - Form of Right Certificate B-1
Exhibit C - Summary of Rights to Purchase
Junior Preferred Stock C-1
Exhibit D - Incumbency Certificate D-1
RIGHTS AGREEMENT
Rights Agreement (the "Agreement"), dated as of
October 30, 2000, between Sequa Corporation, a Delaware
corporation (the "Company"), and The Bank of New York, a New
York banking corporation, as Rights Agent (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company on
October 30, 2000 (the "Rights Dividend Declaration Date")
authorized and declared a dividend distribution (the
"Distribution") of one Class A Right (as such term is
hereinafter defined) for each outstanding share of the Class A
Common Stock, no par value (the "Class A Common Stock"), and one
Class B Right (as such term is hereinafter defined) for each
outstanding share of the Class B Common Stock, no par value (the
"Class B Common Stock"), of the Company outstanding at the close
of business on December 1, 2000 (the "Record Date") and has
authorized and directed the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions
hereof) in respect of each share of Common Stock (as such term
is hereinafter defined) issued (whether originally issued or
delivered from the Company's treasury stock) between the Record
Date and the earlier of the Distribution Date or the Expiration
Date (as such terms are hereinafter defined), each Class A Right
and Class B Right initially representing the right to purchase,
under certain circumstances, one one-thousandth of a share of
Series A Junior Participating Preferred Stock, $1.00 par value
(the "Junior Preferred Stock"), of the Company having the
rights, powers and preferences set forth in the Certificate of
Designation attached hereto as Exhibit A, upon the terms and
subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which, together
with all Affiliates (as such term is hereinafter defined)
and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of securities of the Company
constituting a Substantial Block (as such term is
hereinafter defined), but shall not include (i) the
Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person
organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of
any such plan; (ii) any Person who or which, together with
all Affiliates and Associates of such Person, becomes the
Beneficial Owner of a Substantial Block solely as a result
of a change in the aggregate number of shares of Voting
Stock (as such term is hereinafter defined) outstanding
since the last date on which such Person acquired
Beneficial Ownership of any shares of the Voting Stock
constituting all or a portion of such Substantial Block;
(iii) any Person who or which, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner
of a Substantial Block in the good faith belief that such
acquisition would not (x) cause such Person and its
Affiliates and Associates to become the Beneficial Owner of
a Substantial Block and such Person relied in good faith in
computing the percentage of its voting power on publicly
filed reports or documents of the Company which are
inaccurate or out-of-date or (y) otherwise cause a
Distribution Date or the adjustment provided for in Section
11(a)(ii) to occur; and (iv) any Alexander Person (as such
term is hereinafter defined). Notwithstanding clause (ii)
or (iii) of the prior sentence, if any Person that is not
an Acquiring Person due to such clause (ii) or (iii) does
not cease to be the Beneficial Owner of a Substantial Block
by the close of business on the fifth Business Day (as such
term is hereinafter defined) after notice from the Company
(the date of notice being the first Business Day) that such
Person is the Beneficial Owner of a Substantial Block, such
Person shall, at the end of such five Business Day period,
become an Acquiring Person (and such clause (ii) or (iii)
shall no longer apply to such Person). For purposes of
this definition, the determination whether any Person acted
in "good faith" shall be conclusively determined by the
Board of Directors of the Company. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as
a result of an acquisition of Voting Stock by the Company
which, by reducing the number of shares of Voting Stock
outstanding, increases the proportionate voting power of
Voting Stock beneficially owned by such Person to 33 1/3%
or more of the total voting power of the then outstanding
shares of Voting
Stock of the Company; provided, however, if a Person shall
become the Beneficial Owner of a Substantial Block as a
result of an acquisition of Voting Stock by the Company and
shall, after such acquisition of Voting Stock by the
Company, become the Beneficial Owner of any additional
Voting Stock of the Company other than pursuant to a stock
split, stock dividend or similar transaction, and
immediately thereafter be the Beneficial Owner of a
Substantial Block, then such Person shall be deemed to be
an "Acquiring Person."
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Adjustment Shares" shall have the meaning set
forth in Section 11(a)(ii)(B) hereof.
(d) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the date hereof.
(e) "Agreement" shall have the meaning set forth in
the introduction hereto.
(f) "Alexander Person" shall mean (i) Xxxxxx X.
Xxxxxxxxx and his spouse, their lineal descendants and
their spouses (so long as they remain spouses) and the
estate of any of the foregoing persons, and any
partnership, trust, corporation or other entity to the
extent any shares of Voting Stock owned by such entity are
considered beneficially owned by any of such individuals or
estates, and (ii) any person who would be an Acquiring
Person solely by reason of being deemed to be the
Beneficial Owner of shares of Voting Stock beneficially
owned by any such estate or entity, whether by acting as an
officer, director, executor, trustee or other managing
person of any such entity, or by reason of any ownership
interest or other pecuniary interest in any such entity, or
having an agreement, arrangement or understanding with any
such individual, estate or entity.
(g) A Person shall be deemed the "Beneficial Owner"
of and shall be deemed to "beneficially own" any
securities:
(i) which such Person or any of such Person's
Affiliates or Associates has, directly or indirectly, the
right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the
occurrence of an event) pursuant to any agreement,
arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided,
however, a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (1) securities
tendered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (2) securities issuable upon exercise
of Rights at any time prior to the occurrence of a
Triggering Event or (3) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering
Event, which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) hereof
("Original Rights") or pursuant to Section 11(i) or Section
21 hereof in connection with an adjustment made with
respect to Original Rights; or
(ii) which such Person or any of such Person's
Affiliates or Associates has, directly or indirectly, the
right to vote or dispose of or has "beneficial ownership"
of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding
(whether or not in writing) or has a "pecuniary interest"
or an "indirect pecuniary interest" in (as determined
pursuant to Rule 16a-1(a)(2) of the General Rules and
Regulations under the Exchange Act); provided, however, a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph
(ii) if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not
then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (g)) or
disposing of any securities of the Company.
Notwithstanding the foregoing, nothing contained in
this definition shall cause a Person ordinarily engaged in
business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any
securities acquired in a bona fide firm commitment
underwriting pursuant to an underwriting agreement with the
Company.
(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) "Certification" shall have the meaning set forth
in Section 17 hereof.
(j) "Class A Adjustment Shares" shall have the
meaning set forth in Section 11(a)(ii)(A) hereof.
(k) "Class A Common Stock" shall have the meaning
set forth in the recitals hereto.
(l) "Class A Right" shall have the meaning set
forth in Section 3(a) hereof.
(m) "Class A Right Certificate" shall have the
meaning set forth in Section 3(a) hereof.
(n) "Class B Adjustment Shares" shall have the
meaning set forth in Section 11(a)(ii)(B) hereof.
(o) "Class B Common Stock" shall have the meaning
set forth in the recitals hereto.
(p) "Class B Right" shall have the meaning set forth
in Section 3(a) hereof.
(q) "Class B Right Certificate" shall have the
meaning set forth in Section 3(a) hereof.
(r) "close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided,
however, if such date is not a Business Day it shall mean
5:00 P.M., New York City time, on the next succeeding
Business Day.
(s) "Common Stock" when used with reference to the
Company shall mean the Class A Common Stock of the Company
and the Class B Common Stock of the Company. "Common
Stock" when used with reference to any Person other than
the Company shall mean either the capital stock with the
greatest voting power of such other Person or, if such
Person is a Subsidiary of another Person, the equity
securities or other equity interest having power to control
or direct the management of such other Person.
(t) "Common Stock Equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(u) "Company" shall have the meaning set forth in
the introduction hereto.
(v) "Current Market Price" shall have the meaning
set forth in Section 11(d) hereof.
(w) "Current Value" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(x) "Distribution" shall have the meaning set forth
in the recitals hereto.
(y) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(z) "Equivalent Junior Preferred Stock" shall have
the meaning set forth in Section 11(b) hereof.
(aa) "Exchange Act" shall have the meaning set forth
in the definitions of "Affiliate" and "Associate" above.
(bb) "Exchange Ratio" shall have the meaning set
forth in Section 23(a) hereof.
(cc) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(dd) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(ee) "Incumbency Certificate" shall have the meaning
set forth in Section 26 hereof.
(ff) "Junior Preferred Stock" shall mean the shares
of Series A Junior Participating Preferred Stock, par value
$1.00 per share, of the Company.
(gg) "NASDAQ" shall have the meaning set forth in
Section 11(d)(i) hereof.
(hh) "Original Rights" shall have the meaning set
forth in the definition of "Beneficial Owner" above.
(ii) "Person" shall mean any individual, firm,
corporation, partnership, trust or other entity.
(jj) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(kk) "Record Date" shall have the meaning set forth
in the recitals hereto.
(ll) "Redemption Price" shall have the meaning set
forth in Section 22(a) hereof.
(mm) "Right Certificates" shall have the meaning set
forth in Section 3(a) hereof.
(nn) "Rights" shall have the meaning set forth in the
recitals hereto.
(oo) "Rights Agent" shall have the meaning set forth
in the introduction hereto.
(pp) "Rights Dividend Declaration Date" shall have
the meaning set forth in the recitals hereto.
(qq) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(rr) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(ss) "Shares Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this
definition, includes a report filed pursuant to Section
13(d) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(tt) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(uu) "Subsidiary" shall mean, with reference to any
Person, any corporation (or other entity) of which an
amount of voting securities (or comparable ownership
interests) sufficient to elect at least a majority of the
directors (or comparable individuals) of such corporation
(or other entity) is beneficially owned or otherwise
controlled, directly or indirectly, by such Person.
(vv) "Substantial Block" shall mean a number of
shares of the Voting Stock which are entitled to thirty
three and one-third percent (33 1/3%) or more (without
regard to any instruments, agreements, arrangements or
understandings to which a holder thereof may be a party or
to which such shares may be subject or by which such shares
may be bound) of the aggregate voting power of all
outstanding shares of Voting Stock.
(ww) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(xx) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
(yy) "Trading Day" shall have the meaning set forth
in Section 11(d)(i) hereof.
(zz) "Triggering Event" shall mean any Section
11(a)(ii) Event.
(aaa)"Voting Stock" when used with reference to the
Company shall mean the Class A Common Stock, the Class B
Common Stock and the $5 Cumulative Convertible Preferred
Stock, $1.00 par value, and any other outstanding shares of
capital stock of the Company which are entitled to vote
generally in the election of directors.
Any term defined in the singular shall have the same meaning in
the plural and any term defined in the plural shall have the
same meaning in the singular.
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
shall act as Co-Rights Agent and may from time to time appoint
such other Co-Rights Agents as it may deem necessary or
desirable upon ten calendar days' written notice to the Rights
Agent. In no event shall the Rights Agent have any duty to
supervise or in any way be liable for the actions or omissions
of such Co-Rights Agents.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on
the tenth calendar day after the Shares Acquisition Date (or, if
the tenth calendar day after the Shares Acquisition Date occurs
before the Record Date, the close of business on the Record
Date) or (ii) the close of business on the tenth calendar day
(or such later date as may be determined by action of the Board
of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement of, or
first public announcement of the intent of any Person (other
than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company
or any Person organized, appointed or established by the Company
or any Subsidiary of the Company for or pursuant to the
terms of any such plan) to commence, a tender or exchange offer
if, upon consummation thereof, such Person would be an Acquiring
Person (the earlier of the dates in subsections (i) and (ii)
hereof being herein referred to as the "Distribution Date") (x)
the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the
Common Stock (which certificates for the Common Stock shall be
deemed also to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of
Common Stock. A Right issued to a holder of Class A Common
Stock (a "Class A Right"), if exercised to purchase Common Stock
pursuant to Section 11(a)(ii)(A) of this Agreement, may purchase
only Class A Common Stock and a Right issued to a holder of
Class B Common Stock (a "Class B Right"), if exercised to
purchase Common Stock pursuant to Section 11(a)(ii)(B) of this
Agreement, may purchase only Class B Common Stock. As soon as
practicable after receipt by the Rights Agent of written notice
from the Company of the Distribution Date, the Rights Agent, at
the Company's expense, will send by first-class, postage prepaid
mail, to each record holder of Common Stock as of the close of
business on the Distribution Date, at the address of such holder
shown on the records of the Company, a Class A Right Certificate
or a Class B Right Certificate, as the case may be, in
substantially the form of Exhibit B hereto (the "Class A Right
Certificate" or the "Class B Right Certificate," as the case may
be) (together, the "Right Certificates"), evidencing one Class
A Right or one Class B Right for, respectively, each share of
the Class A Common Stock or Class B Common Stock so held,
subject to adjustment as provided herein. As of the
Distribution Date, the Rights will be evidenced solely by such
Right Certificates and the conversion of a share of Class B
Common Stock into a share of Class A Common Stock after the
Distribution Date will have no effect on any such Rights.
(b) As soon as practicable following the Record Date,
the Company will send a copy of a Summary of Rights to Purchase
Junior Preferred Stock, 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 Stock as
of the close of business on the Record Date, at the address of
such holder shown on the records of the Company. With respect
to certificates for Common Stock outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced
by such certificates for Common Stock, and the registered
holders of the Common Stock shall also be the registered holders
of the associated Rights. Until the Distribution Date (or
earlier redemption or expiration of the
Rights), the surrender for transfer or conversion of any of the
certificates for Common Stock outstanding on the Record Date
shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares
of Common Stock issued after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date (as such
term is defined in Section 7), or, in certain circumstances
provided in Section 21 hereof, after the Distribution Date.
Certificates representing such shares of Common Stock shall have
impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Sequa Corporation and The
Bank of New York dated as of October 30, 2000 (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 Sequa
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. Sequa Corporation
will mail to the holder of this certificate a copy of
the Rights Agreement as in effect on the date of
mailing without charge within five Business Days after
receipt of a written request therefor. Rights
beneficially owned by an Acquiring Person and certain
other persons will be null and void under certain
circumstances set forth in the Rights Agreement.
After the due execution of any supplement or amendment to this
Agreement in accordance with the terms hereof, the reference to
this Agreement in the foregoing legend shall mean the Agreement
as so supplemented or amended. Until the Distribution Date, the
Rights associated with the Common Stock represented by
certificates containing the foregoing legend shall be evidenced
by such certificates alone, and the surrender for transfer or
conversion of any of such certificates shall also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate. In the event that the Company
purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise
any Rights associated with the shares of Common Stock which are
no longer outstanding. The failure to print the foregoing
legend on any such Common Stock certificate or any other defect
therein shall not affect in any manner whatsoever the
application or interpretation of the provisions of Section 7(e)
hereof.
Section 4. FORM OF RIGHT CERTIFICATES. (a) The
Right Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof) shall be
substantially the same as 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 (but which do not affect the rights or duties
of the Rights Agent) 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 the NASDAQ
National Market or of any stock exchange on which the Rights may
from time to time be listed, or to conform to usage. The Right
Certificates shall be in machine-printable format and in a form
reasonably satisfactory to the Rights Agent. Subject to the
provisions of Section 11 and Section 21 hereof, the Right
Certificates, whenever distributed, shall be dated as of the
Record Date, shall show the date of countersignature, and on
their face shall entitle the holders thereof to purchase such
number of shares of Junior Preferred Stock (or following a
Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as shall be set forth therein at the
price per one one-thousandth of a share of Junior Preferred
Stock set forth therein (the "Purchase Price"), but the number
of such shares and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Notwithstanding any other provision of this
Agreement, (i) any Right Certificate issued pursuant to Section
3(a) or Section 21 hereof that represents Rights beneficially
owned by: (x) an Acquiring Person or any Associate or Affiliate
thereof, (y) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such or (z) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring
Person has any agreement, arrangement or understanding (whether
or not in writing) 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
(whether or not in writing) which has as a primary purpose or
effect avoidance of Section 7(e) hereof, (ii) any Right
Certificate issued at any time to any nominee of such Acquiring
Person, Associate or Affiliate and (iii) any Right Certificate
issued pursuant to Section 6 or Section 11 hereof, upon
transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the
extent feasible following the written instruction of the Company
to the Rights Agent) the following legend, modified as
applicable to apply to such Person:
The Rights represented by this Right Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this
Right Certificate and the Rights represented will be
null and void in the circumstances specified in
Section 7(e) of the Rights Agreement.
The Company shall instruct the Rights Agent in writing of
the Rights which should be so legended and shall supply the
Rights Agent with such legended Right Certificates.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The
Right Certificates shall be executed on behalf of the Company by
one of its authorized officers either manually or by facsimile
signature. The Right Certificates shall be countersigned by an
authorized signatory of the Rights Agent
either manually or by facsimile signature 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, issued and delivered 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 Agreement any such person was not such an
officer.
In case any authorized signatory of the Rights Agent
who shall have countersigned any of the Right Certificates shall
cease to be such signatory before delivery by the Company, such
Right Certificates, nevertheless, may be issued and delivered by
the Company with the same force and effect as though the person
who countersigned such Right Certificates had not ceased to be
such signatory; and any Right Certificate may be countersigned
on behalf of the Rights Agent by any person who, at the actual
date of the countersignature of such Right Certificate, shall be
a proper signatory of the Rights Agent to countersign such Right
Certificate, although at the date of the execution of this
Agreement any such person was not such a signatory.
Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for such
purpose, 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, the date of each of the Right
Certificates and the date of countersignature of each of the
Right Certificates.
Section 6. TRANSFER, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Section
13 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on
the Expiration Date, any 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 shares of Junior
Preferred Stock (or following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as
the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such
purpose, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably
request. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such
additional evidence, as the Company or the Rights Agent shall
reasonably request, of the identity of the Beneficial Owner,
Affiliates or Associates thereof or of the holder, or of any
other Person with which such holder or any of such holder's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting or disposing of securities of the
Company. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e), Section 13 and Section 19(k) hereof,
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 a Right
Certificate holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right
Certificates. The Rights Agent shall have no duty or obligation
to take any action under any Section of this Agreement which
requires the payment by a Rights holder of applicable taxes and
governmental charges unless and until the Rights Agent is
satisfied that all such taxes and/or charges have been paid.
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
satisfactory to them, along with a signature guarantee and such
other further documentation as the Rights Agent may reasonably
request and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate,
if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for 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) hereof,
the registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein,
including, without limitation, the restrictions on
exercisability set forth in Sections 3(a), 9(c), 11(a)(iii),
22(a) and 23(b) hereof) in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the designated
office of the Rights Agent, together with payment of the
aggregate Purchase Price for the total number of one one-
thousandths of a share of Junior Preferred Stock (or shares of
Common Stock, other securities, cash or other assets, as the
case may be) as to which the Rights are then exercisable, at or
prior to the earliest of (i) the close of business on October
31, 2010 (the "Final Expiration Date"), (ii) the time at which
the Rights are exchanged as provided in Section 23 or (iii) the
time at which the Rights are redeemed as provided in Section 22
(such earliest date being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-thousandth of
a share of Junior Preferred Stock pursuant to the exercise of a
Right shall initially be $200, shall be subject to adjustment
from time to time as provided in Section 11 hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and
the certificate duly executed and completed accompanied by
payment of the Purchase Price for the number of one one-
thousandths of shares of Junior Preferred Stock (or shares of
Common Stock, other securities, cash or other assets, as the
case may be) to be purchased and an amount equal to any
applicable transfer tax, the Rights Agent shall thereupon,
subject to Section 19(k), promptly (i) requisition from any
transfer agent of Junior Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares)
certificates for the number of one one-thousandths of shares of
Junior Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all
such requests, (ii) if the Company shall have elected to deposit
the total number of shares of Junior Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts
representing such number of shares of Junior Preferred Stock as
are to be purchased (in which case certificates for the shares
of Junior Preferred Stock 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, (iii) when appropriate, requisition from any
transfer agent of the Common Stock of the Company (or make
available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of shares of Common
Stock to be paid in accordance with Section 11(a)(ii) and
11(a)(iii), (iv) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 13, (v) 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 (vi) when appropriate, after
receipt deliver such cash to or upon the order of the registered
holder of such Right Certificate. The payment of the then
Purchase Price may be made in cash or by certified bank check or
bank draft or money order payable to the order of the Company or
the Rights Agent. In the event that the Company is obligated to
issue securities, distribute property or pay cash pursuant to
Section 11(a)(iii) hereof, the Company will make all
arrangements necessary so that cash, property or securities are
available for payment, distribution or issuance by the Rights
Agent, if and when appropriate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of
Section 13 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person became such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person
has any agreement, arrangement or understanding (whether or not
in writing) 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 (whether or not in
writing) 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
notify the Rights Agent when this Section 7(e) applies and shall
use all reasonable efforts to insure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but
neither the Company nor the Rights Agent shall have any
liability to any holder of Right Certificates or other Person as
a result of the Company's failure to make any determinations
with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. The Rights Agent will
endeavor to comply with the provisions hereof to the extent it
has received instructions from the Company concerning such
matters.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set
forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the
Right Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the
Beneficial Owner, Affiliates or Associates thereof or of the
holder, or of any other Person with which such holder or any of
such holder's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting or disposing of any
securities of the Company as the Company or the Rights Agent
shall reasonably request.
Section 8. CANCELLATION 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.
Section 9. RESERVATION AND AVAILABILITY OF SHARES
OF CAPITAL STOCK. (a) The Company covenants and agrees that it
will cause to be reserved and kept available out of its
authorized and unissued shares of Junior Preferred Stock (and,
following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other
securities) or out of its authorized and issued shares of Junior
Preferred Stock (and, following the occurrence of a Triggering
Event, out of its authorized and issued Common Stock and/or
other securities) held in its treasury, the number of shares of
Junior Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that
will be sufficient to permit the exercise in full of all
outstanding Rights (it being understood that any of the
foregoing shares or securities may also be reserved for other
purposes) or will take such other steps as are appropriate to
assure that the number of such shares or securities (or their
equivalents) sufficient to permit the exercise in full of all
outstanding Rights will be available upon such exercise.
(b) So long as the shares of Junior Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) issuable upon the exercise of
Rights may be listed on any national securities exchange, or
admitted to trading on NASDAQ, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable (but only to the extent that the Board of Directors
of the Company determines that it is reasonably likely that the
Rights will be exercised), all shares reserved for such issuance
to be listed on such exchange or admitted to trading on NASDAQ
upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (X)(i) to
file, as soon as practicable following the first occurrence of
a Section 11(a)(ii) Event, or as soon as required by law, as the
case may be, a registration statement under the Act with respect
to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) to cause such registration statement to
become effective as soon as practicable after such filing and
(iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
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 and (Y)(i) to file appropriate applications with
any state or federal regulatory bodies having jurisdiction over
the issuance of the securities (or assets) purchasable upon
exercise of the Rights in order to obtain any approvals or
orders of such bodies as may be legally required, (ii) to cause
such approvals to be obtained or orders to be issued as soon as
practicable after such filing and (iii) to cause such approvals
or orders to remain effective until the earlier of (A) the date
as of which the Rights are no longer exercisable for such
securities (or assets) and (B) the Expiration Date, to the
extent not previously obtained. The Company will also take such
action as may be appropriate under the blue sky laws of the
various states. The Company may temporarily suspend, (X) for a
period of time not to exceed ninety (90) days after the date set
forth in clause (X)(i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and
file such registration statement and permit it to become
effective and (Y) for a period of time not in excess of one
hundred eighty (180) days after such date (or for such longer
period as is required by any applicable law or rule or
regulation of any appropriate regulatory bodies), the
exercisability of the Rights in order to obtain any such
required regulatory body approvals or orders. Upon any such
suspension, the Company shall issue a public announcement and
shall give simultaneous written notice to the Rights Agent
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public
announcement and notice to the Rights Agent 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
qualifications in such jurisdiction shall have been obtained.
The Rights Agent may assume that any Right exercised is
permitted to be exercised under applicable law, unless
specifically notified in writing by the Company prior to such
exercise, and shall have no liability for acting in reliance
upon such assumption.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
shares of the Junior Preferred Stock (and following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all taxes and government
charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any shares of the
Junior Preferred Stock (or Common Stock and/or other securities,
as the case may be) upon the exercise of Rights. The Company
shall not, however, be required (a) to pay any transfer tax
which may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates or the issuance or
delivery of certificates for the Junior Preferred Stock (or
Common Stock 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 (b) to
issue or deliver any certificates for shares of the Junior
Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder
of such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such
tax is due.
Section 10. JUNIOR PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for any number of
shares of Junior Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the
holder of record of such whole and/or fractional shares of
Junior Preferred Stock (or Common Stock and/or other securities,
as the case may be) represented thereby on, and such certificate
shall be dated the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable taxes and charges) was made
and shall show the date of countersignature; provided, however,
if the date of such surrender and payment is a date upon which
the Junior Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company
are closed, such person shall be deemed to have become the
record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Junior
Preferred Stock (or Common Stock and/or other securities, as the
case may be) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number of
shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Junior Preferred Stock payable in shares of the Junior Preferred
Stock, (B) subdivide the outstanding Junior Preferred Stock, (C)
combine the outstanding Junior Preferred Stock into a smaller
number of shares or (D) issue any shares of its capital stock in
a reclassification of the Junior Preferred Stock (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Junior
Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled
to receive upon payment of the Purchase Price then in effect the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Junior Preferred Stock (or Common Stock
and/or other securities) transfer books of the Company were
open, he would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination
or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii), 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).
(ii) Subject to Section 23 of this Agreement, in the
event any Person, alone or together with its Affiliates and
Associates, becomes an Acquiring Person (a "Section 11(a)(ii)
Event"), then, prior to the later of (x) the date on which the
Company's rights of redemption pursuant to Section 22(a) expire,
or (y) five (5) days after the date of the first occurrence of
a Section 11(a)(ii) Event, proper provision shall be made so
that
(A) Each holder of a Class A Right, except as
provided in Section 7(e) hereof, shall thereafter have a right
to receive, upon exercise thereof at the then current Purchase
Price for the number of one one-thousandths of a share of Junior
Preferred Stock for which such Class A Right is then exercisable
in accordance with the terms of this Agreement, in lieu of
shares of Junior Preferred Stock, such number of shares of the
Class A Common Stock of the Company (subject to Section 3(a)
hereof) as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of one one
thousandths of a share of Junior Preferred Stock for which a
Class A Right is then exercisable and dividing that product by
(y) fifty percent (50%) of the Current Market Price per share of
the Class A Common Stock of the Company (determined pursuant to
Section 11(d)) on the date of the occurrence of the event listed
above in this subparagraph (ii) (such number of shares are
hereinafter referred to as the "Class A Adjustment Shares")
provided that the Purchase Price
and the number of Class A Adjustment Shares shall be further
adjusted as provided in this Agreement to reflect any events
occurring after the date of such first occurrence; and
(B) Each holder of a Class B Right, except as
provided in Section 7(e) hereof, shall thereafter have a right
to receive, upon exercise thereof at the then current Purchase
Price for the number of one one-thousandths of a share of Junior
Preferred Stock for which such Class B Right is then exercisable
in accordance with the terms of this Agreement, in lieu of
shares of Junior Preferred Stock, such number of shares of the
Class B Common Stock of the Company (subject to Section 3(a)
hereof) as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of one one
thousandths of a share of Junior Preferred Stock for which a
Class B Right is then exercisable and dividing that product by
(y) fifty percent (50%) of the Current Market Price per share of
the Class B Common Stock of the Company (determined pursuant to
Section 11(d)) on the date of the occurrence of the event listed
above in this subparagraph (ii) (such number of shares are
hereinafter referred to as the "Class B Adjustment Shares")
(together with the Class A Adjustment Shares, the "Adjustment
Shares") provided that the Purchase Price and the number of
Class B Adjustment Shares shall be further adjusted as provided
in this Agreement to reflect any events occurring after the date
of such first occurrence.
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's Restated
Certificate of Incorporation, as amended, but not outstanding or
reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii),
the Company 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 (such excess, the
"Spread") and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon exercise
of the Rights and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Company (subject to Section 3(a)
hereof) (including, without limitation, shares, or units of
shares, of preferred stock which the Board of Directors of the
Company has deemed to have the same value as shares of Common
Stock (such shares of
preferred stock, "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company; provided,
however, if the Company shall not have made adequate provision
to deliver value pursuant to clause (B) above within thirty (30)
days following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's
rights of redemption pursuant to Section 22(a) expires (the
later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock
(subject to Section 3(a) hereof) (to the extent available) and
then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. Only Class A Common Stock
shall be issued with respect to Class A Rights and only Class B
Common Stock shall be issued with respect to Class B Rights. If
the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in
full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the
authorization of such additional shares (such period, as it may
be extended, the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to
the first and/or second sentences of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights
and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public
announcement and shall give simultaneous written notice to the
Rights Agent stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement and
notice to the Rights Agent at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the value
of any Common Stock Equivalent shall be deemed to have the same
value as the Common Stock on such date. The Company shall give
the Rights Agent notice of the selection of any Common Stock
Equivalent under this Section 11(a)(iii).
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Junior Preferred Stock entitling them (for a period expiring
within forty-five (45) calendar days after such record date) to
subscribe for or purchase Junior Preferred Stock (or securities
having substantially the same rights, privileges and preferences
as the shares of Junior Preferred Stock ("Equivalent Junior
Preferred Stock") or convertible into the Junior Preferred Stock
or Equivalent Junior Preferred Stock) at a price per share of
the Junior Preferred Stock or Equivalent Junior Preferred Stock
(or having a conversion price per share, if a security
convertible into the Junior Preferred Stock or Equivalent Junior
Preferred Stock) less than the Current Market Price (as defined
in Section 11(d) per share of the Junior Preferred Stock or
Equivalent Junior Preferred Stock, as the case may be) 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, of which the numerator shall be the number of shares
of Junior Preferred Stock outstanding on such record date plus
the number of shares of Junior Preferred Stock or Equivalent
Junior Preferred Stock which the aggregate offering price of the
total number of shares of Junior Preferred Stock or Equivalent
Junior Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price and of
which the denominator shall be the number of shares of Junior
Preferred Stock outstanding on such record date plus the number
of additional shares of Junior Preferred Stock and/or Equivalent
Junior Preferred Stock to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription
price may be paid by delivery of consideration part or all of
which 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. Shares of
Junior Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such
rights, 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 Junior Preferred
Stock (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 Junior Preferred Stock) 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, of which
the numerator shall be the Current Market Price per share of
Junior Preferred Stock (as defined in Section 11(d)) 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 share of Junior Preferred Stock
and of which the denominator shall be such Current Market Price
per share of Junior Preferred Stock. Such adjustments shall be
made successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, other than computations made pursuant to Section
11(a)(iii), the "Current Market Price" per share of Class A
Common Stock or Class B Common Stock, as the case may be, on any
date shall be deemed to be the average of the daily closing
prices per share of the Class A Common Stock or the Class B
Common Stock, as the case may be, for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined in
this paragraph (d)) immediately prior to but not including such
date and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the "Current Market Price" per share of Class
A Common Stock or Class B Common Stock, as the case may be, on
any date shall be deemed to be the average of the daily closing
prices per share of the Class A Common Stock or the Class B
Common Stock, as the case may be, for the ten (10) consecutive
Trading Days immediately following but not including such date;
provided, however, in the event that the Current Market Price
per share of Class A Common Stock or Class B Common Stock, as
the case may be, is determined during the period following the
announcement by the issuer of such Class A Common Stock or Class
B Common Stock, as the case may be, of (A) a dividend or
distribution on such Class A Common Stock or Class B Common
Stock, as the case may be, payable in shares of
Class A Common Stock or Class B Common Stock, as the case may
be, or securities convertible into shares of Class A Common
Stock (other than the Class A Rights) or Class B Common Stock
(other than the Class B Rights), as the case may be, or (B) any
subdivision, combination or reclassification of Class A Common
Stock or Class B Common Stock, as the case may be, and prior to
the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above after the ex-dividend date for such
dividend or distribution or the record date for such
subdivision, combination or reclassification, then, and in each
such case, the Current Market Price shall be appropriately
adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of the Class A
Common Stock or Class B Common Stock, as the case may be, are
not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the
principal national securities exchange on which the shares of
the Class A Common Stock or Class B Common Stock, as the case
may be, are listed or admitted to trading or, if the shares of
the Class A Common Stock or Class B Common Stock, as the case
may be, are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-
the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or such other system then in use, or, if on any such date the
shares of the Class A Common Stock or the Class B Common Stock,
as the case may be, are not quoted by such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Class A Common
Stock or the Class B Common Stock, as the case may be, selected
by the Board of Directors of the Company. If on any such date
no market maker is making a market in the Class A Common Stock
or the Class B Common Stock, as the case may be, the fair value
of such shares on such date shall be as determined in good faith
by the Board of Directors (which may, in its sole discretion,
rely upon the opinion of an independent investment banking firm
selected by the Board of Directors) whose 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 shares of Class A Common Stock or Class B Common
Stock, as the case may be, are listed or admitted to trading is
open for the transaction of business or, if the shares of the
Class A Common Stock or the Class B Common Stock, as the case
may be, are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or
Friday on
which banking institutions in the State of New York are not
authorized or obligated by law or executive order to close. If
the Class A Common Stock or the Class B Common Stock, as the
case may be, is not publicly held or not so listed or traded,
"Current Market Price" per share shall mean the fair value per
share as determined in good faith by the Board of Directors
(which may, in its sole discretion, rely upon the opinion of an
independent investment banking firm selected by the Board of
Directors) whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the
Current Market Price per share of Junior Preferred Stock shall
be determined in the same manner as set forth above for the
Class A Common Stock in clause (i) of this Section 11(d) (other
than the last sentence thereof). If the Current Market Price
per share of Junior Preferred Stock cannot be determined in the
manner provided above or if the Junior Preferred Stock is not
publicly held or listed or traded in any manner described in
clause (i) of this Section 11(d), the Current Market Price per
share of Junior Preferred Stock shall be conclusively deemed to
be an amount equal to one thousand (1,000) (as such number may
be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Class A
Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Class A
Common Stock. If neither the Class A Common Stock nor the
Junior Preferred Stock is publicly held or so listed or traded,
Current Market Price per share of the Junior Preferred Stock
shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. For all purposes of
this Agreement, the Current Market Price of one one-thousandth
of a share of Junior Preferred Stock shall be equal to the
Current Market Price of one share of Junior Preferred Stock
divided by one thousand (1,000).
(e) Anything herein to the contrary notwithstanding,
no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at
least one percent (1%) in such price; provided, however, 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, the nearest
ten-thousandth of a share of Common Stock or the nearest one-
millionth of a share of Junior Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock
other than shares of Junior Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
shares of Junior Preferred Stock contained in Sections 11(a)
through (q), inclusive, and the provisions of Sections 7, 9, 10
and 13 with respect to the Junior Preferred Stock shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-thousandths of a share of
Junior Preferred Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment
as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number
of shares (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The 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 shares of
Junior Preferred Stock 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 shares
of Junior Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest 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 the adjustment of the Purchase
Price. The Company shall make a public announcement and shall
give simultaneous written notice to the Rights Agent of its
election to adjust the number of Rights, indicating the record
date for 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 ten (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 Right Certificates on such
record date Right Certificates evidencing, subject to Section
13, 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 shares of Junior Preferred Stock
issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price per 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 one one-thousandth
of the then stated value, if any, of a share of Junior Preferred
Stock issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable such number of one
one-thousandths of a share of such Junior Preferred Stock at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record
date the shares of Junior Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise over and above the shares of Junior Preferred Stock and
other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, the
Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that the Board of Directors of the Company shall
determine to be advisable in order that any consolidation or
subdivision of shares of Junior Preferred Stock, issuance wholly
for cash of any shares of Junior Preferred Stock at less than
the Current Market Price, issuance wholly for cash of the Junior
Preferred Stock or securities which by their terms are
convertible into or exchangeable for Junior Preferred Stock,
stock dividends or issuance of rights, options or warrants
referred to hereinabove in this Section 11 hereafter made by the
Company to holders of its Junior Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections
22, 23 and 26 hereof, take (nor will it permit any of its
Subsidiaries to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(o) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(n)), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(n)) or
(iii) sell or transfer (or permit any of its Subsidiaries to
sell or transfer), in one or more transactions, assets or
earning power aggregating more than fifty percent (50%) of the
assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(n)) if 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 which would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Record Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock or (iii) combine the
outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter
but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction, the numerator of which shall
be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event; provided, however, if the events in this Section
11(p) involve Class A Common Stock, then the adjustments herein
shall apply to the Class A Rights, and if the events in this
Section 11(p) involve Class B Common Stock, then the adjustments
herein shall apply to the Class B Rights.
(q) Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date, the Company may, in
lieu of making any adjustment to the Purchase Price, the number
of shares of Junior Preferred Stock eligible for purchase on
exercise of each Right or the number of Rights outstanding,
which adjustment would otherwise be required by Section
11(a)(i), 11(b), 11(c), 11(h) or 11(i), make such other
equitable adjustment or adjustments thereto as the Board of
Directors (whose determination shall be conclusive) deems
appropriate in the circumstances and not inconsistent with the
objectives of the Board of Directors in adopting this Agreement
and such Sections.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE
OR NUMBER OF SHARES. Whenever an adjustment is made as provided
in Section 11, the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement
of the calculations and facts accounting for such adjustment and
the adjusted Purchase Price, (b) promptly file with the Rights
Agent and with each transfer agent for the Junior Preferred
Stock and the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25. The Rights Agent
shall be fully protected in relying on any such certificate and
on any adjustment therein contained and shall have no duty with
respect to and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such a
certificate.
Section 13. 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, the
Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Right. For the
purposes of this Section 13(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then
in use, or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date
as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue
fractions of shares of Junior Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of
a share of Junior Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares
(other than fractions which are integral multiples of one one-
thousandth of a share of Junior Preferred Stock). In lieu of
fractional shares that are not integral multiples of one one-
thousandth of a share of Junior Preferred Stock, the Company may
pay to the registered holders of Right Certificates at the time
the Rights evidenced thereby are exercised or exchanged as
herein provided an amount in cash equal to the same fraction of
the current market value of one one-thousandth of a share of
Junior Preferred Stock. For purposes of this Section 13(b),
the current market value of one one-thousandth of a share of
Junior Preferred Stock shall be one one-thousandth of the
closing price of a share of Junior Preferred Stock (as
determined pursuant to Section 11(d)(ii)) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event
the Company shall not be required to issue fractions of shares
of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, 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
(1) share of Common Stock (subject to Section 3(a) hereof). For
purposes of this Section 13(c), the current market value of one
share of Common Stock shall be the closing price of one share of
Common Stock (as determined pursuant to Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise or exchange of a
Right, except as otherwise permitted by this Section 13.
(e) The Rights Agent shall have no duty or obligation
with respect to this Section 13 and Section 23(e) hereof unless
and until it has received specific instructions (and sufficient
cash, if required) from the Company with respect to its duties
and obligations under such Sections.
Section 14. RIGHTS OF ACTION. All rights of action
in respect of this Agreement are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution
Date, of the Common Stock), may, on 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 hereunder of
any Person subject to this Agreement.
Section 15. AGREEMENT OF RIGHT HOLDERS. Every
holder of a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of
a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the
Common Stock;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6 and Section 7(f) hereof, 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 Stock 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 Stock certificate
made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the
Company nor the Rights Agent shall be required to be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or other Person as a
result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment 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, judgment or ruling lifted or otherwise overturned as
soon as possible.
Section 16. RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of shares of Junior Preferred
Stock 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
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 24), 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 17. CONCERNING THE RIGHTS AGENT. The
Company agrees to pay to the Rights Agent such compensation as
shall be agreed to in writing between the Company and the Rights
Agent 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
preparation, execution, delivery, amendment and administration
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,
damage, judgment, fine, penalty, claim, demand, settlement, cost
or expense (including the reasonable fees and expenses of
counsel), incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent (each as may
be finally determined by a court of competent jurisdiction) for
any action taken, suffered 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 on the premises. Anything to the
contrary notwithstanding, in no event shall the Rights Agent be
liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including, but
not limited to, lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage. The indemnity
provided herein shall survive the termination of this Agreement
and the termination and the expiration of the Rights. The costs
and expenses incurred in enforcing this right of indemnification
shall be paid by the Company. Any liability of the Rights Agent
under this Rights Agreement will be limited to the amount of
fees paid by the Company to the Rights Agent. The provisions of
this Section 17 shall survive the expiration of the Rights and
the termination of this Agreement. Notwithstanding anything in
this Agreement to the contrary, in no event shall the Rights
Agent be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the
likelihood of the loss or damage and regardless of the form of
the action.
The Rights Agent shall be authorized and protected and
shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its acceptance and
administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice,
direction, consent, instruction, adjustment notice, 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.
In addition to the foregoing, 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 (i) the
execution of the certification concerning beneficial ownership
appended to the Form of Assignment and the Form of Election to
Purchase included as part of Exhibit B hereto (the
"Certification"), unless the Rights Agent shall have actual
knowledge that, as executed, the Certification is untrue or (ii)
the non-execution or failure to complete the Certification
including, without limitation, any refusal to honor any
otherwise permissible assignment or election by reason of such
non-execution or failure.
Section 18. MERGER OR CONSOLIDATION OR CHANGE OF
NAME OF RIGHTS AGENT. Any Person into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Rights
Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the
parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 20. 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 so countersigned; and in
case at that time any of the Right Certificates shall not have
been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases
such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 19. DUTIES OF RIGHTS AGENT. The Rights
Agent undertakes only the duties and obligations expressly
imposed by this Agreement, and no implied duties or obligations
shall be read into this Agreement against the Rights Agent, 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
of its selection (who may be legal counsel for the Company) and
the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking, suffering or omitting to take any
action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed
to be conclusively proved and established by a certificate
signed by any one of the Chairman of the Board, the President,
any Vice President, the 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, suffered or omitted 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 gross negligence, bad faith or willful misconduct
(and as may be finally determined by a court of competent
jurisdiction); provided, however, the Rights Agent shall not be
liable for any indirect, special, consequential or punitive
damages. The issuance or non-issuance of a Right Certificate or
Junior Preferred Stock or other security issued in lieu of
Junior Preferred Stock in accordance with instructions given to
the Rights Agent by the Company pursuant to Section 19(k) hereof
or in accordance with the terms hereof shall not constitute
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any 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 Section 11 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 by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Junior
Preferred Stock or Common Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares
of Junior Preferred Stock or Common Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable, nor
shall the Rights Agent be responsible for the legality of the
terms hereof in its capacity as an administrative agent.
(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 and certificates delivered pursuant to
any provision hereof from any one of the Chairman of the Board,
the President, any Vice President, the Secretary or the
Treasurer of the Company, and is authorized to apply to such
officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken,
suffered or omitted to be taken by it in accordance with
instructions of any such officer. An application by the Rights
Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action
proposed to be taken, suffered or omitted by the Rights Agent
with respect to its duties and obligations under this Agreement
and the date on and/or after which such action shall be taken,
or such omission shall be effective and the Rights Agent shall
not be liable for any action taken, suffered or omitted in
accordance with a proposal included in any such application on
or after the date specified therein (which date shall not be
less than three Business Days after the Company receives such
application) without the consent of the Company unless prior to
taking, suffering or omitting such action, the Rights Agent has
received written instructions in response to such application
specifying the actions to be taken, suffered or omitted.
(h) The Rights Agent and any shareholder, affiliate,
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 Person.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either by itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company or any
other person resulting from any such act, default, neglect or
misconduct; provided, however, reasonable care was exercised in
the selection 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 it believes 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, the Rights Agent
shall not take any further action with respect to such requested
exercise or transfer without first consulting the Company. The
Company shall give the Rights Agent prompt written instructions
as to the action to be taken regarding the Right Certificate
involved. The Rights Agent shall not be liable for acting in
accordance with such instructions.
(l) In addition to the foregoing, the Rights Agent
shall be protected and shall incur no liability for, or in
respect of, any action taken or omitted by it in connection with
its administration of this Agreement if such acts or omissions
are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the
form of assignment and the form of election to purchase attached
hereto unless the Rights Agent shall have actual knowledge that,
as executed, such certification is untrue, or (ii) the non-
execution of such certification including, without
limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent
prompt written notice of any event of ownership of which the
Company is aware and which would prohibit the exercise or
transfer of the Right Certificates.
Section 20. CHANGE OF RIGHTS AGENT. The Rights
Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days'
notice in writing mailed to the Company and to each transfer
agent of the Junior Preferred Stock and the Common Stock by
registered or certified mail, and, at the Company's expense, to
the holders of the Right Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights
Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Junior Preferred Stock and the
Common Stock by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the Company
shall become the temporary Rights Agent and 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 (i) a Person organized and
doing business under the laws of the United States or of the
State of New York (or of any other state of the United States so
long as such Person is authorized to do business as a banking or
trust institution in the State of New York), in good standing,
having an office in the State of New York, which is subject to
supervision or examination by federal or state authority or
which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $25 million or (ii) an
affiliate of such Person. 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 Junior Preferred Stock and
the Common Stock, 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 20, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 21. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with
the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following
the Distribution Date and prior to the redemption or expiration
of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, (i) no such Right Certificate shall be issued
if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person
to whom such Right Certificate would be issued and (ii) no such
Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 22. REDEMPTION AND TERMINATION. (a) The
Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the close of business on the
tenth calendar day following the Shares Acquisition Date (or if
the Shares Acquisition Date shall have occurred prior to the
Record Date, the close of business on the tenth day following
the Record Date) 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 $.001 per Right as
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"), and the Company may, at its option, pay the
Redemption Price either, in whole or in part, in shares of its
Class A Common Stock for Class A Rights or in shares of its
Class B Common Stock for Class B Rights (subject to Section 3(a)
hereof) (valued at their Current Market Price as defined in
Section 11(d)(i) on the date of the redemption), other
securities, cash or other assets. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall
not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired.
(b) In deciding whether or not to exercise the
Company's right of redemption hereunder, the Board of Directors
of the Company shall act in good faith, in a manner they
reasonably believe to be in the best interests of the Company
and with such care, including reasonable inquiry, skill and
diligence, as a person of ordinary prudence would use under
similar circumstances, and they may consider the long-term and
short-term effects of any action upon employees, customers and
creditors of the Company and upon communities in which offices
or other establishments of the Company are located, and all
other pertinent factors.
(c) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right held. Within ten (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 the Rights Agent and 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 Stock. 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 for value any Rights at any time in any
manner other than that specifically set forth in this Section
22, and other than in connection with the repurchase of Common
Stock prior to the Distribution Date.
Section 23. EXCHANGE. (a) The Board of Directors
of the Company may, at its option, from time to time on or after
a Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 7(e) hereof) for shares of Class A Common Stock and
Class B Common Stock (subject to Section 3(a) hereof) at an
exchange ratio of one share of Class A Common Stock per Class A
Right or one share of Class B Common Stock per Class B Right
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date of this
Agreement (such exchange ratio being hereinafter referred to as
the "Exchange Ratio").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to Section 23(a) and without any further action and
without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock
(subject to Section 3(a) hereof) equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.
Promptly after the action of the Board of Directors ordering an
exchange of the Rights, the Company shall give notice of any
such exchange to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at
each holder's last address as it appears upon the registry books
of the Rights Agent; provided, however, the failure to give, or
any defect in, such notice shall not affect the validity of such
exchange. 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
shares of Common Stock 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 null and void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 23, the
Company, at its option, may substitute shares of Junior
Preferred Stock (or Equivalent Junior Preferred Stock, as such
term is defined in Section 11(b) hereof) for shares of Common
Stock exchangeable for the Rights, at the initial rate of one
one-thousandth of a share of Junior Preferred Stock (or
Equivalent Junior Preferred Stock) for each share of Common
Stock, as appropriately adjusted to reflect adjustments in the
dividend rights of the Junior Preferred Stock pursuant to the
terms thereof.
(d) In the event that there shall not be sufficient
shares of Common Stock or Junior Preferred Stock issued, but not
outstanding, or authorized but unissued, to permit any exchange
of Rights as contemplated in accordance with this Section 23 or
that any regulatory actions or approvals are required in
connection therewith, the Company shall take all such action as
may be necessary to authorize additional Common Stock or Junior
Preferred Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue
fractional shares of Common Stock or to distribute certificates
which evidence fractional shares of Common Stock pursuant to
this Section 23. In lieu of such fractional shares of Common
Stock, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional shares
of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole share of Common Stock (subject to Section 3(a) hereof).
For the purposes of this Section 23(e), the current market value
of a whole share of Common Stock shall be the closing price of
a share of Common Stock (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this
Section 23.
(f) In any exchange pursuant to this Section 23, the
Company, at its option, may substitute for any share of Common
Stock exchangeable for a Right (i) Common Stock Equivalents,
(ii) cash, (iii) debt securities of the Company, (iv) other
assets or (v) any combination of the foregoing, having an
aggregate value which a majority of the Board of Directors of
the Company shall have determined in good faith to be equal to
the Current Market Price of one share of Common Stock
(determined pursuant to Section 11(d) hereof) on the Trading Day
immediately preceding the date of exchange pursuant to this
Section 23.
Section 24. NOTICE OF CERTAIN EVENTS. In case the
Company shall propose at any time following the Distribution
Date (a) to pay any dividend payable in stock of any class to
the holders of Junior Preferred Stock or to make any other
distribution to the holders of Junior Preferred Stock (other
than a regular periodic cash dividend), (b) to offer to the
holders of Junior Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Junior
Preferred Stock or shares of stock of any class or any other
securities, rights or options, (c) to effect any
reclassification of Junior Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
Junior Preferred Stock), (d) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(n)
hereof) or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than fifty
percent (50%) of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section
11(n) hereof) or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company
shall give to the Rights Agent and to each holder of a Right, in
accordance with Section 25, a notice of such proposed action,
which shall specify the record date for the purposes of such
stock dividend, distribution of rights or Rights, or the date on
which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of
the Junior Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at
least twenty (20) days prior to the record date for determining
holders of the Junior Preferred Stock for purposes of such
action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the Junior Preferred Stock, whichever shall be the
earlier.
In case a Section 11(a)(ii) Event shall occur, then,
in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a
Right, to the extent feasible and in accordance with Section 25,
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) and all references in the preceding
paragraph to Junior Preferred Stock shall be deemed to
thereafter refer to Common Stock and/or other securities, as the
case may be.
Section 25. NOTICES. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by
the holder of any 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:
Sequa Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Senior Executive Vice
President and General Counsel
Subject to the provisions of Section 20, 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 Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder
of any Right Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry
books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to
the earlier of the Distribution Date or the Shares Acquisition
Date and subject to the penultimate sentence of this Section 26,
the Company may from time to time supplement or amend this
Agreement without the approval of any holders of Right
Certificates. From and after the earlier of the Distribution
Date or the Shares Acquisition Date, and subject to the
penultimate sentence of this Section 26, the Company may from
time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates 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 lengthen the time period
during which the Rights may be redeemed following the Shares
Acquisition Date for up to an additional twenty (20) days beyond
the time period set forth in Section 22(a) or (iv) to change or
supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). The Company shall provide
the Rights Agent with an Incumbency Certificate in substantially
the form attached hereto as Exhibit D (the "Incumbency
Certificate") and shall update it as necessary. Upon the
delivery of a certificate from an authorized officer of the
Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment unless the
Rights Agent shall have determined in good faith that such
supplement or amendment would adversely affect its interests
under this Agreement. Notwithstanding anything in this
Agreement to the contrary, no supplement or amendment shall be
made on or after the Distribution Date which changes the
Redemption Price, the Final Expiration Date, the Purchase Price
or the number of shares of Junior Preferred Stock for which a
Right is then exercisable.
Section 27. SUCCESSORS. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD
OF DIRECTORS. For all purposes of this Agreement, any
calculation of the number of shares of Voting Stock outstanding
at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Voting
Stock of which any Person is the Beneficial Owner, shall be made
in accordance with the provisions of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Company's Board of
Directors, or the Company, or as may be necessary or advisable
in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions
of this Agreement and (ii) make all determinations and
calculations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations
(including, for the purpose of clause (ii) below, all omissions
with respect to the
foregoing) which are done or made by the Board in good faith,
shall (i) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all
other parties and (ii) not subject the Company's Board of
Directors to any liability to the holders of the Right
Certificates. The Rights Agent shall always be entitled to
assume that the Company's Board of Directors acted in good faith
and shall be fully protected and incur no liability in reliance
thereon.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the
Common Stock) any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 30. SEVERABILITY. If any term, provision,
covenant, or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or
invalidated; provided, however, 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 22 hereof shall be reinstated and shall not expire
until the close of business on the tenth day following the date
of such determination by the Board of Directors.
Section 31. GOVERNING LAW. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for
all purposes shall be governed by and construed in accordance
with the laws of such State applicable to contracts to be made
and performed entirely within such State except that the rights,
duties and obligations of the Rights Agent under this Agreement
shall be governed by the laws of the State of New York.
Section 32. COUNTERPARTS. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and their respective
corporate seals to be hereunto affixed and attested, all as of
the day and year first above written.
[SEAL]
SEQUA CORPORATION
By: /S/ XXXXXX X. XXXXXXX
----------------------
Stuary Z. Krinsly
Senior Executive Vice President
and General Counsel
Attest:
By: /S/ XXXXXX X. XXXXXXX
----------------------
Xxxxxx X. Xxxxxxx
Senior Vice President, Finance
THE BANK OF NEW YORK, Rights Agent
By: /S/ XXXXX XXXXX
----------------------
Xxxxx Xxxxx
Vice President
Exhibit A
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
SEQUA CORPORATION
_________________
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
_________________
SEQUA CORPORATION (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the
State of Delaware does hereby certify that, pursuant to
authority conferred upon the Board of Directors by the Restated
Certificate of Incorporation, as amended, and pursuant to the
provisions of Section 151 of the Delaware General Corporation
Law, said Board of Directors duly adopted the following
resolution, which resolution remains in full force and effect as
of October 30, 2000:
RESOLVED, that pursuant to authority conferred upon
the Board of Directors by the Restated Certificate of
Incorporation of the Corporation, as amended, there is hereby
created a series of preferred stock of the Corporation; which
series shall have the following powers, preferences, and
relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, in
addition to those set forth in the Restated Certificate of
Incorporation of the Corporation, as amended:
1. DESIGNATION AND AMOUNT. The series of Preferred
Stock established hereby shall be designated as "Series A Junior
Participating Preferred Stock," par value $1.00, and the
authorized number of shares of Series A Junior Participating
Preferred Stock shall be 25,000 shares.
2. DIVIDENDS AND DISTRIBUTIONS. (A) Subject to the
rights of the holders of any shares of any series of Preferred
Stock ranking prior and superior to the shares of Series A
Junior Participating Preferred Stock with respect to dividends,
the holders of shares of Series A Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first day of
February, May, August and November in each year (each such date
being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of
Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a)
$10.00 per share or (b) subject to the provision for adjustment
hereinafter set forth, one thousand (1,000) times the aggregate
per share amount of all cash dividends, and one thousand (1,000)
times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend
payable in shares of Class A Common Stock or a subdivision of
the outstanding shares of Class A Common Stock (by
reclassification or otherwise), declared on the Class A Common
Stock, no par value, of the Corporation (the "Common Stock")
since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
Series A Junior Participating Preferred Stock. In the event the
Corporation shall at any time after October 30, 2000 (the
"Rights Dividend Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding shares of Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then
in each such case the amount to which holders of shares of
Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred
Stock as provided in Paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided,
however, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $10.00 per share
on the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Participating Preferred
Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Series A Junior
Participating Preferred Stock, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series
A Junior Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be no more than thirty (30) days prior to the date fixed
for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series
A Junior Participating Preferred Stock shall have the following
voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior
Participating Preferred Stock shall entitle the holder thereof
to one thousand (1,000) votes on all matters submitted to a vote
of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the Common Stock or (iii) combine
the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which
holders of shares of Series A Junior Participating Preferred
Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in the
Certificate of Incorporation, as amended, or by law, the holders
of shares of Series A Junior Participating Preferred Stock and
the holders of shares of Class A Common Stock, Class B Common
Stock and $5 Cumulative Convertible Preferred Stock shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in an
amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall xxxx the beginning of a
period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A Junior
Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six (6) quarterly dividends
thereon, voting as a class, irrespective of series, shall have
the right to elect two (2) directors.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock may
be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting
of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of
directors shall be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding shall
be present in person or by proxy. The absence of a quorum of
the holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting
at which the holders of Preferred Stock shall exercise such
voting right initially during an existing default period, they
shall have the right, voting as a class, to elect directors to
fill such vacancies, if any, in the Board of Directors as may
then exist up to two (2) directors or, if such right is
exercised at an annual meeting, to elect two (2) directors. If
the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Preferred
Stock shall have the right to make such increase in the number
of directors as shall be necessary to permit the election by
them of the required number. After the holders of the Preferred
Stock shall have exercised their right to elect directors in any
default period and during the continuance of such period, the
number of directors shall not be increased or decreased except
by vote of the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking senior
to or pari passu with the Series A Junior Participating
Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect directors, the Board of Directors may
order, or any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series,
may request, the calling of a special meeting of the holders of
Preferred Stock, which meeting shall thereupon be called by the
President, a Vice-President or the Secretary of the Corporation.
Notice of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote pursuant to this
Paragraph (C)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his
last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not
earlier than twenty (20) days and not later than sixty (60) days
after such order or request or in default of the calling of such
meeting within sixty (60) days after such order
or request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less
than ten percent (10%) of the total number of shares of
Preferred Stock outstanding. Notwithstanding the provisions of
this Paragraph (C)(iii), no such special meeting shall be called
during the period within sixty (60) days immediately preceding
the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) directors voting as
a class, after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period and (y)
any vacancy in the Board of Directors may (except as provided in
Paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining directors theretofore elected by the
holders of the class of stock which elected the director whose
office shall have become vacant. References in this Paragraph
(C) to directors elected by the holders of a particular class of
stock shall include directors elected by such directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect directors shall cease, (y) the term of any
directors elected by the holders of Preferred Stock as a class
shall terminate and (z) the number of directors shall be such
number as may be provided for in the certificate of
incorporation or by-laws irrespective of any increase made
pursuant to the provisions of Paragraph (C)(ii) of this Section
3 (such number being subject, however, to change thereafter in
any manner provided by law or in the certificate of
incorporation or by-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the
remaining directors.
(D) Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special
voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to
the Series A Junior Participating Preferred
Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on
a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock,
except dividends paid ratably on the Series A
Junior Participating Preferred Stock and all such
parity stock on which dividends are payable or in
arrears in proportion to the total amounts to
which the holders of all such shares are then
entitled;
(iii)redeem, purchase or otherwise acquire for
consideration shares of any stock ranking on a
parity (either as to dividends or upon
liquidation, dissolution or winding up) with the
Series A Junior Participating Preferred Stock,
provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of
any such parity stock in exchange for shares of
any stock of the Corporation ranking junior
(either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating
Preferred Stock, or any shares of stock ranking
on a parity with the Series A Junior
Participating Preferred Stock, except in
accordance with a purchase offer made in writing
or by publication (as determined by the Board of
Directors) to all holders of such shares upon
such terms as the Board of Directors, after
consideration of the respective annual dividend
rates and other relative rights and preferences
of the respective series and classes, shall
determine in good faith will result in fair and
equitable treatment among the respective series
or classes;
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under subparagraph (A) of this Paragraph 4,
purchase or otherwise acquire such shares at such time and in
such manner.
5. REACQUIRED SHARES. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received an amount equal to $1,000
per share of Series A Junior Participating Preferred Stock, plus
an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the
holders of shares of Series A Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Common
Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the
Series A Junior Liquidation Preference by (ii) one thousand
(1,000) (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of
all outstanding shares of Series A Junior Participating
Preferred Stock and Common Stock, respectively, holders of
Series A Junior Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in
the ratio of the Adjustment Number to one (1) with respect to
such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the
Series A Liquidation Preference and the liquidation preferences
of all other series of Preferred Stock, if any, which rank on a
parity with the Series A Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are
not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time
after the Rights Dividend Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such
event.
7. CONSOLIDATION, MERGER, ETC. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case the shares of Series A Junior Participating Preferred Stock
shall at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment
hereinafter set forth) equal to one thousand (1,000) times the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights
Dividend Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Junior
Participating Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
8. REDEMPTION. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
9. RANKING. The Series A Junior Participating
Preferred Stock shall rank junior to the $5 Cumulative
Convertible Preferred Stock and all other series of the
Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series
shall provide otherwise.
10. AMENDMENT. At any time when any shares of Series
A Junior Participating Preferred Stock are outstanding, neither
the Restated Certificate of Incorporation of the Corporation, as
amended, nor this Certificate of Designation shall be amended in
any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior
Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or
more of the outstanding shares of Series A Junior Participating
Preferred Stock, voting separately as a class.
11. FRACTIONAL SHARES. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating
Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed
this Certificate and do affirm the foregoing as true under
penalties of perjury as of this _______ th day of __________,
_________.
SEQUA CORPORATION
By:
----------------------
[Name]
----------------------
[Title]
----------------------
ATTEST:
By:
---------------------------
[Name]
[Title]
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- Rights
----------
NOT EXERCISABLE AFTER OCTOBER 31, 2010 OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]*(1)
SEQUA CORPORATION
Class [A/B]*(2) Right Certificate
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 October 30, 2000 (the "Rights
Agreement") between Sequa Corporation, a Delaware corporation
(the "Company"), and The Bank of New York, a New York banking
corporation, as Rights Agent (the "Rights Agent"), to purchase
from the Company at any time prior to 5:00 P.M. (New York City
time) on October 31, 2010 at the office of the Rights Agent
*(1) The portion of the legend in brackets shall be
inserted only if aplicable and shall replace the
preceding sentence.
*(2) Depending on whether issued with respect to Class A
Common Stock or Class B Common Stock.
designated for such purpose, or its successors as Rights Agent,
one one-thousandth of a fully paid, non-assessable share of
Series A Junior Participating Preferred Stock, $1.00 par value
(the "Junior Preferred Stock"), of the Company, at a purchase
price of $200 per one one-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related
Certificate duly executed, along with a signature guarantee and
such other and further documentation as the Rights Agent may
reasonably request. The number of Rights evidenced by this
Right Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and
Purchase Price as of October 30, 2000, based on the Junior
Preferred Stock as constituted at such date. The Company
reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only
whole shares of Junior Preferred Stock will be issued.
Upon the occurrence of a Triggering Event, if the
Rights evidenced by this Right Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of
a person who, after such transfer, became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person, such Rights
would become null and void and no holder hereof would have any
right with respect to such Rights from and after the occurrence
of such Triggering Event.
As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares of Junior Preferred
Stock (or, in certain circumstances, common stock and/or 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 Triggering Events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
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 above-
mentioned office of the Rights Agent and at the executive
offices of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, along with a signature guarantee
and such other and further documentation as the Rights Agent may
reasonably request, 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 one-thousandths of a share of Junior
Preferred Stock 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, along with a signature guarantee and such
other and further documentation as the Rights Agent may
reasonably request, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.001 per Right
at any time prior to the earlier of the close of business on (i)
the tenth day following the Shares Acquisition Date (as such
time period may be extended pursuant to the Rights Agreement)
and (ii) the Final Expiration Date. In addition, under certain
circumstances following the Shares Acquisition Date, the Rights
may be exchanged, in whole or in part, for shares of common
stock or shares of preferred stock of the Company having
essentially the same value or economic rights as such shares.
Immediately upon the action of the Board of Directors of the
Company authorizing any such exchange, and without any further
action or any notice, the Rights (other than Rights which are
not subject to such exchange) will
terminate and the Rights will only enable holders to receive the
shares issuable upon such exchange.
No fractional shares of Junior Preferred Stock will be
issued upon the exercise of any Right or Rights evidenced hereby
(other than fractions which are integral multiples of one one-
thousandth of a share of Junior Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement. The Company, at its election, may require that a
number of Rights be exercised so that only whole shares of
Junior Preferred Stock would be issued.
No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of shares of Junior Preferred Stock 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 consent to or withhold consent from 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 an authorized signatory of the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of
, .
--------- ---- ------
[SEAL]
ATTEST: SEQUA CORPORATION
By: By:
-------------------- -----------------
Name: Name:
Title: Title:
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent
By:
-----------------------
Authorized Signatory
Date:
[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
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:______________, ____________,
---------------------------------
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate
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.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
To Sequa Corporation:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate
to purchase the shares of Junior Preferred Stock issuable upon
the exercise of the Rights (or such other securities of the
Company or of any other Person which may be issuable upon the
exercise of the Rights) and requests that certificates for such
shares be issued in the name of:
Please insert social security or
other taxpayer identifying number
__________________________________________________________
(Please print name and address)
__________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for
the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security or
other taxpayer identifying number
_________________________________________________________
(Please print name and address)
_________________________________________________________
Dated: ____________, ____
______________________
Signature
CERTIFICATE
-----------
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: _____________, ____
_______________________
Signature
__________________________________________________________
NOTICE
------
The signature to the foregoing Election to Purchase
and Certificate 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.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
JUNIOR PREFERRED STOCK
The Board of Directors of Sequa Corporation (the
"Company") has declared a dividend distribution of one Right for
each outstanding share of Class A Common Stock, no par value,
and Class B Common Stock, no par value (the "Class A Common
Stock" and "Class B Common Stock," respectively and together,
the "Common Stock"), of the Company. The distribution is
payable to holders of record on December 1, 2000 (the "Record
Date"). Each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share of Series A
Junior Participating Preferred Stock, $1.00 par value (the
"Junior Preferred Stock"), at a price of $200.00 per one one-
thousandth of a share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and The Bank of New York, as Rights Agent (the "Rights
Agent").
Distribution Date; Transfer of Rights
-------------------------------------
Until the earlier to occur of (i) ten calendar days
following the date (the "Shares Acquisition Date") of public
announcement that a person or group of affiliated or associated
persons, subject to certain exceptions (an "Acquiring Person")
acquired, or obtained the right to acquire, beneficial ownership
of Common Stock or other voting securities ("Voting Stock") that
have 33 1/3% or more of the voting power of the outstanding
shares of Voting Stock or (ii) ten calendar days (or such later
date as may be determined by action of the Board of Directors
prior to the time any person or group of affiliated persons
becomes an Acquiring Person) following the commencement or
announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in such person or
group acquiring, or obtaining the right to acquire, beneficial
ownership of Voting Stock having 33 1/3% or more of the voting
power of the outstanding shares of Voting Stock (the earlier of
such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Company's Common
Stock certificates outstanding as of the Record Date, by such
Common Stock certificates. The Rights Agreement provides that,
until the Distribution Date, the Rights will be transferred with
and only with the Company's Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuance of the Company's Common Stock
will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any
of the Company's Common Stock certificates outstanding as of the
Record Date or issued thereafter will also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Company's Common Stock as of the close
of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. The Rights
Agreement provides that, as defined therein, the term "Acquiring
Person" shall not include Xxxxxx X. Xxxxxxxxx (and certain
related Persons) who currently beneficially own Voting Stock in
excess of 50% of the voting power.
The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on
October 31, 2010, unless earlier redeemed or exchanged by the
Company as described below.
Exercise of Rights for Common Stock of the Company
--------------------------------------------------
In the event that a Person becomes an Acquiring
Person, each holder of a Right will thereafter have the right to
receive, upon exercise, Class A Common Stock for Rights issued
with respect to Class A Common Stock and Class B Common
Stock for Rights issued with respect to Class B Common Stock
(or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the
Purchase Price of the Right. Notwithstanding any of the
foregoing, following the occurrence of the event 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 will be null and
void.
Exchange of Rights
------------------
At any time after the occurrence of the event set
forth under the heading "Exercise of Rights for Common Stock of
the Company" above, the Board of Directors may exchange the
Rights (other than Rights owned by the Acquiring Person which
shall have become void), in whole or in part, at an exchange
ratio of one share of Class A Common Stock (or a fraction of a
share of Junior Preferred Stock having the same market value)
per Class A Right (subject to adjustment) and one share of Class
B Common Stock (or a fraction of a share of Junior Preferred
Stock having the same market value) per Class B Right (subject
to adjustment).
Redemption of Rights
--------------------
At any time prior to 5:00 P.M., New York City time, on
the tenth calendar day following the Shares Acquisition Date,
the Company may redeem the Rights in whole, but not in
part, at a price of $.001 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make
announcement thereof, and upon such action, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Rights Holder Not a Stockholder
-------------------------------
Until a Right is exercised or exchanged, the holder
thereof, as such, will have no rights as a stockholder of the
Company, including, without limitation, the right to vote or to
receive dividends.
Terms of the Junior Preferred Stock
-----------------------------------
The Junior Preferred Stock will rank junior to all
other series of the Company's preferred stock (including, but
not limited to, the $5.00 Cumulative Convertible Preferred
Stock) with respect to payment of dividends and as to
distributions of assets in liquidation. Each share of Junior
Preferred Stock will have a quarterly dividend rate per share
equal to the greater of $10.00 or 1,000 times the per share
amount of any dividend (other than a dividend payable in shares
of Common Stock or a subdivision of the Common Stock) declared
from time to time on the Class A Common Stock, subject to
certain adjustments. The Junior Preferred Stock will not be
redeemable. Generally, in the event of liquidation, the holders
of each one one-thousandth of a share of the Junior Preferred
Stock will receive a payment equivalent to that received by the
holders of each share of Common Stock. Generally, each share of
Junior Preferred Stock will vote together with the Common Stock
and any other series of cumulative preferred stock entitled to
vote in such manner and will be entitled to 1,000 votes, subject
to certain adjustments. In the event of any merger,
consolidation, combination or other transaction in which shares
of Common Stock are exchanged for or changed into other stock or
securities, cash and/or other property, each share of Junior
Preferred Stock will be entitled to receive 1,000 times the
aggregate amount of stock, securities, cash and/or other
property, into which or for which each share of Common Stock is
changed or exchanged, subject to certain adjustments. The
foregoing dividend, voting and liquidation rights of the Junior
Preferred Stock are protected against dilution in the event that
additional shares of Common Stock are issued pursuant to a stock
split or stock dividend or distribution. Because of the nature
of the Junior Preferred Stock's dividend, voting, liquidation
and other rights, the value of the one one-thousandth of a share
of Junior Preferred Stock purchasable with each Right is
intended to approximate the value of one share of Common Stock.
Amendments to Terms of the Rights
---------------------------------
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions
of the Rights Agreement may be amended by the Board in order to
cure any ambiguity, defect or inconsistency, or to make changes
which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person).
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8 A dated ____, 2000. A copy of
the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated
herein by reference.
EXHIBIT D
SEQUA CORPORATION
INCUMBENCY CERTIFICATE
I, Xxxxxx X. Xxxxxx, do hereby certify that I am the
Secretary of Sequa Corporation, a Delaware Corporation (the
"Company"), and do further certify in such capacity that (i) the
following named individuals are duly appointed officers of the
Company who hold the offices set forth opposite their names, and
(ii) the signature opposite the name and title of each such
officer is his true and correct signature:
NAME OFFICE SIGNATURE
---- ------ ------------
Xxxxxx X. Xxxxxxxxx Chairman of the Board
and Chief Executive Officer ------------
Xxxx X. Xxxxxx President and Chief
Operating Officer ------------
Xxxxxx X. Xxxxxxx Senior Executive Vice
President and General Counsel ------------
Xxxxxx X. Xxxxxxx Senior Vice President,
Finance ------------
Xxxxxxx X. Xxxxxxx Vice President and Treasurer ------------
Xxxxxxx X. Xxxxxxx Vice President and Controller ------------
Xxxxxx Xxxxxxxxx Executive Vice President ------------
Xxxxxx X. Xxxxxx Secretary ------------
Xxxxxxxx X. Xxxxxxx Assistant Secretary ------------
IN WITNESS WHEREOF, I have hereunto set my hand this
___ day of _____, 2000.
-----------------------
Xxxxxx X. Xxxxxx
Secretary
I, _____, ______ of the Company, do hereby certify
that Xxxxxx X. Xxxxxx is duly elected, qualified and acting
Secretary of the Company, and that his signature set forth above
is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand this
___ day of _____, 2000.
-----------------------
[Name]
[Title]
