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EXHIBIT 4.2
NATCO GROUP INC.
(FORMERLY XXXXXXXX POINT INDUSTRIES, INC.)
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF MAY 15, 1998
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TABLE OF CONTENTS
Page
NATCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . 7
Section 3. Issue of Right Certificates. . . . . . . . . . . . . . . . 7
Section 4. Form of Right Certificates. . . . . . . . . . . . . . . . . 9
Section 5. Execution, Authentication and Delivery. . . . . . . . . . . 10
Section 6. Registration, Registration of Transfer and Exchange. . . . . 10
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates. . . . 11
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights. 12
Section 9. Cancellation and Destruction of Right Certificates. . . . . . . 13
Section 10. Reservation and Availability of Shares . . . . . . . . . . . . 13
Section 11. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 12. Adjustment of Purchase Price, Number of Shares or Number of
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 13. Certificate of Adjusted Purchase Price or Number of Shares. 20
Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 15. Fractional Rights and Fractional Shares. . . . . . . . . . . 22
Section 16. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . 23
Section 17. Agreement of Right Holders. . . . . . . . . . . . . . . . . . . 00
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Xxxxxxx 00. Right Certificate Holder Not Deemed a Stockholder . . . . . . . 24
Section 19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . 24
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . 25
Section 21. Merger or Consolidation or Change of Name of Rights Agent . . . 26
Section 22. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . 27
Section 23. Issuance of New Right Certificates . . . . . . . . . . . . . . 28
Section 24. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 25. Mandatory Redemption and Exchange . . . . . . . . . . . . . . . 29
Section 26. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . 30
Section 27. Securities Laws Registrations . . . . . . . . . . . . . . . . . 31
Section 28. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 29. Supplements and Amendments. . . . . . . . . . . . . . . . . 32
Section 30. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 31. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . 32
Section 32. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 33. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 34. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 35. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . 33
Section 36. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . 33
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Exhibit A -- Form of Right Certificate
Exhibit B -- Certificate of Designation, Rights and Preferences of Series A
Junior Participating Preferred Stock
Exhibit C -- Summary of Rights to Purchase Preferred Stock
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This RIGHTS AGREEMENT, dated as of May 15, 1998 is between NATCO Group
Inc., a Delaware corporation and formerly named Xxxxxxxx Point Industries, Inc.
(the "Company"), and ChaseMellon Shareholder Services, L.L.C., a New Jersey
limited liability company, as Rights Agent.
RECITALS:
The Board of Directors of the Company has authorized and declared a
dividend distribution of one Right (as hereinafter defined) for each share of
Common Stock (as hereinafter defined) of the Company outstanding at the Close
of Business on the Record Date (as such terms are hereinafter defined) and has
authorized the issuance of one Right with respect to each share of Common Stock
that shall hereafter be issued out of authorized but unissued Common Stock or
out of treasury between the Record Date and the earlier of the Distribution
Date or the Expiration Date (as such terms are hereinafter defined) or the
date, if any, on which such Rights are redeemed.
Each Right will initially represent the right to purchase, upon the
terms and subject to the conditions hereinafter set forth, one one-hundredth of
a share of Series A Junior Participating Preferred Stock of the Company, having
the rights and preferences set forth in the form of Certificate of Designation,
Rights and Preferences of Series A Junior Participating Preferred Stock
attached hereto as Exhibit B.
The Board of Directors of the Company has directed that the terms and
conditions under which the Rights are to be distributed, including without
limitation those affecting the exercise thereof, the securities or other
property to be acquired thereby and the purchase price to be paid therefor,
shall be set forth in a written agreement between the Company and a rights
agent made for the benefit of the holders of the Rights to the extent so
provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. (a) Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Voting Shares of the Company then
outstanding, but shall not include the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of
the Company or any entity holding Voting Shares for or pursuant to any
such plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Voting Shares by
the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such
Person to 15% or more of the Voting Shares of the Company then
outstanding; provided, however, that, if a Person shall become the
Beneficial Owner of 15% or more of the Voting Shares of the Company then
outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company and at a time when such Person is
the Beneficial Owner of 15% or more of the Voting Shares of the Company
then outstanding, become the
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Beneficial Owner of any additional Voting Shares of the Company, then
such Person shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, any Person who has reported or is
required to report such ownership (but who is the Beneficial Owner of
less than 20% of the outstanding Common Shares of the Company) on
Schedule 13G under the Exchange Act (or any comparable or successor
reporting form) or on Schedule 13D under the Exchange Act (or any
comparable or successor reporting form) which Schedule 13D does not
state any intention or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the
Common Shares) and, within ten Business Days of being requested by the
Company to advise it regarding the same, certifies to the Company that
such Person acquired Common Shares in excess of 14.9% of the outstanding
Common Shares of the Company inadvertently or without knowledge of the
terms of the Rights and who, together with all such Person's Affiliates
and Associates, thereafter does not acquire additional Common Shares
while being the Beneficial Owner of 15% or more of the outstanding
Common Shares of the Company shall not be deemed to be an "Acquiring
Person"; provided, however, that, if the Person requested so to certify
fails to do so within ten Business Days, then such Person shall become
an Acquiring Person immediately after such ten day period.
"Agreement" shall mean this Rights Agreement as hereafter amended
from time to time.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "own beneficially" any securities which (without duplication):
(i) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, rights, warrants,
options or otherwise;
(ii) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act, including
any such right or ownership obtained pursuant to any agreement,
arrangement or understanding, whether or not in writing; or
(iii) are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or
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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;
provided, however, that, for purposes of each clause of this definition,
a Person shall not be deemed the Beneficial Owner of, or to own
beneficially, any securities (A) tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; (B) issuable upon the exercise of
Rights at any time prior to the Shares Acquisition Date; (C) as a
result of any agreement, arrangement or understanding to vote such
security if such agreement, arrangement, or understanding (1) arises
solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or successor
report); or (D) acquired by a Person engaged in business as an
underwriter of securities through such Person's participation in good
faith in a firm commitment underwriting until the expiration of forty
days after the date of such acquisition.
Notwithstanding anything in this definition to the contrary, the
phrase "then outstanding", when used with reference to a Person's
Beneficial Ownership of securities of the Company (or to the number of
such securities "beneficially owned"), shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the State of Texas are
authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M.,
Houston time, on such date; provided, however, that, if such date is not
a Business Day it shall mean 5:00 P.M., Dallas time, on the next
succeeding Business Day.
"Closing Price", with respect to any security, shall mean the
last sale price, regular way, on a specific Trading Day or, in case no
such sale takes place on such Trading 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 such security is not then 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 such security is
listed or admitted to trading or, if such security is not then 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
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over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System or such other
system then in use, or, if on any such Trading Day such security is 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 such security selected by the Board of Directors of the Company. If
such security is not publicly held or so listed or traded, "Closing
Price" shall mean the fair value per unit of such security as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described and the Closing Price set forth in a
statement filed with the Rights Agent.
"Common Shares" when used with reference to the Company shall
mean shares of capital stock of the Company which have no preference
over any other class of stock with respect to dividends or assets, which
are not redeemable at the option of the Company and with respect to
which no sinking, purchase or similar fund is provided and shall
initially mean the shares of Common Stock, par value $0.01 per share, of
the Company. "Common Shares" when used with reference to any Person
other than the Company shall, if used with reference to a corporation,
mean the capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such
first-mentioned Person and, if used with reference to any other Person,
mean the equity interest in such Person (or, if the net worth determined
in accordance with generally accepted accounting principles of another
Person which controls such first-mentioned Person is greater than such
first-mentioned Person, then such other Person) with the greatest voting
power or managerial power with respect to the business and affairs of
such Person.
"Common Stock" shall mean the Common Stock, par value $0.01 per
share, of the Company.
"Company" shall mean NATCO Group Inc., a Delaware corporation,
and its successors.
"Company Order" means a written request or order signed in the
name of the Company by its Chairman of the Board, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Rights Agent.
"Corporate Trust Office" means the principal office of the Rights
Agent at which it administers its corporate trust business, which, in
the case of ChaseMellon Shareholder Services, L.L.C., shall, until
hereafter changed, be its office at 0000 Xxxxx Xxxxxx, Xxxxxx, Xxxxx.
"Cynara Merger" shall mean the merger contemplated by that
certain Agreement and Plan of Merger dated as of March 26, 1998, between
the Company and The Cynara Company.
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"DGCL" shall have the meaning ascribed to such term in the
Recitals to this Agreement.
"Distribution Date" shall mean the earlier of (i) the tenth
Business Day after the Shares Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity holding Voting
Shares for or pursuant to the terms of any such plan) of, or after the
date of the first public announcement of the intention of any Person
(other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Voting Shares for or pursuant to the terms of any such
plan) to commence, a tender or exchange offer the consummation of which
would result in any Person becoming the Beneficial Owner of 15% or more
of the then outstanding Voting Shares of the Company; provided, however,
that an event described in clause (ii) of this definition above shall
not cause the occurrence of the Distribution Date if the Board of
Directors of the Company shall, prior to such tenth Business Day (or
such later date as described in clause (ii) above), determine that such
tender or exchange offer is spurious, unless, thereafter, the Board of
Directors of the Company shall make a contrary determination, in which
event the Distribution Date shall occur on the later to occur of such
tenth Business Day (or such later date as described in clause (ii)
above) and the date of such latter determination.
"Effective Date" shall mean May 15, 1998.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and any successor statute thereto.
"Final Expiration Date" shall mean the Close of Business on May
15, 2008.
"Initial Public Offering" shall mean an offering, sale and
delivery of shares of Common Stock in a distribution firmly underwritten
by one or more underwriters and registered pursuant to the registration
provisions of the Securities Act.
"Person" shall mean any individual, firm, corporation,
partnership, limited partnership, trust or other entity, and shall
include any successor (by merger or otherwise ) of such entity.
"Preferred Shares" shall mean shares of the Company's currently
authorized Series A Junior Participating Preferred Stock, without par
value.
"Principal Party" shall have the meaning ascribed to such term in
Section 14(b).
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"Purchase Price" shall mean the price at which the holder of a
Right may, subject to the terms and conditions of this Agreement,
purchase one one-hundredth (1/100) of a Preferred Share (which,
initially, is as set forth in Section 8(b) hereof), as such price shall
be adjusted pursuant to the terms of this Agreement.
"Record Date" shall mean May 15, 1998.
"Redemption Date" shall mean the time at which the Rights are
redeemed pursuant to Section 24 herein or the time at which all of the
Rights are mandatorily redeemed and exchanged pursuant to Section 25
hereof.
"Redemption Price" shall have the meaning specified in Section
24(b) herein.
"Right" shall mean one preferred share purchase right which
initially represents the right of the registered holder thereof to
purchase one one-hundredth (1/100) of a Preferred Share upon the terms
and subject to the conditions herein set forth.
"Right Certificate" shall mean a certificate, in substantially
the form of Exhibit A attached to this Rights Agreement, evidencing the
Rights registered in the name of the holder thereof.
"Rights Agent" shall mean ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company, and any successor
thereto appointed in accordance with the terms hereof, in its capacity
as agent for the Company and the holders of the Rights pursuant to this
Agreement.
"Rights Register" and "Rights Registrar" shall have the meanings
specified in Section 6.
"Securities Act" shall mean the federal Securities Act of 1933,
as amended.
"Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include a
report filed pursuant to Section 13(d) or Section 16(a) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
"Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the outstanding capital stock or other
equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by such
Person.
"Trading Day" shall mean a day on which the principal national
securities exchange on which any of the Voting Shares of the Company are
listed or admitted to trading is open
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for the transaction of business or, if none of the Voting Shares of the
Company is listed or admitted to trading on any national stock exchange,
a Business Day.
"Voting Shares" shall mean (i) the Common Shares of the Company
and (ii) any other shares of capital stock of the Company entitled to
vote generally in the election of directors or entitled to vote together
with the Common Shares in respect of any merger or consolidation of the
Company, any share exchange, any sale of all or substantially all of the
Company's assets, any other reorganization or recapitalization or any
liquidation, dissolution or winding up of the Company. Whenever any
provision of this Agreement requires a determination of whether a number
of Voting Shares comprising a specified percentage of such Voting Shares
is, was or will be beneficially owned or has been voted, tendered,
acquired, sold or otherwise disposed of or a determination of whether a
Person has offered or proposed to acquire a number of Voting Shares
comprising such specified percentage, the number of Voting Shares
comprising such specified percentage of Voting Shares shall, subject to
the provisions of the definition in this Section 1(a) of "Beneficial
Owner", in every such case be deemed to be the number of Voting Shares
comprising the specified percentage of all the Company's then
outstanding Voting Shares.
"Wholly-Owned Subsidiary" of a Person shall mean any corporation
or other entity all the outstanding capital stock or other equity
interests of which having ordinary voting power in the election of
directors or similar officials (other than directors' qualifying shares
or similar interest) are owned, directly or indirectly, by such Person.
(b) Rules of Construction. Unless the context otherwise requires, as
used in this Agreement: (a) a term has the meaning ascribed to it; (b) an
accounting term not otherwise defined has the meaning ascribed to it in
accordance with GAAP; (c) "or" is not exclusive; (d) "including" means
"including without limitation;" (e) words in the singular include the plural;
(f) words in the plural include the singular; (g) words applicable to one
gender shall be construed to apply to each gender; (h) the terms "hereof,"
"herein," "hereby," "hereto" and derivative or similar words refer to this
entire Agreement; and (i) the term "Section" shall refer to the specified
Section of this Agreement.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. (a) From and after the
date of this Agreement until the Distribution Date, (i) outstanding Rights will
be evidenced (subject to the provisions of paragraph (b) of this Section 3) by
the certificates for outstanding Common Shares of the Company and not by
separate Right Certificates, and (ii) the right to receive Right Certificates
will be transferable only in connection with the transfer of Common Shares of
the Company. As soon as practicable after the Distribution Date, the Rights
Agent will send, by first-class, insured, postage-
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prepaid mail, to each record holder of Common Shares of the Company as of the
Close of Business on the Distribution Date, at the address of such holder shown
on the stock transfer records of the Company, a Right Certificate evidencing
one Right for each Common Share so held. From and after the Distribution Date,
the Rights will be evidenced solely by such Right Certificates
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase 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 the Common
Shares as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to certificates for
the Common Shares outstanding on the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of
the holders thereof together with a copy of the Summary of Rights attached
thereto. Until the earlier of the Distribution Date or the Expiration Date,
the surrender for transfer of any certificate representing Common Shares in
respect of which Rights have been issued, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the transfer of the Rights
associated with such Common Shares.
(c) The Company agrees that, at any time after the date of this
Agreement and prior to the Distribution Date that it issues any of its Common
Shares upon original issue or out of treasury, it will concurrently distribute
to the holder of such Common Shares one Right for each such Common Share, which
Right shall be subject to the terms and provisions of this Agreement and will
evidence the right to purchase the same number of one one-hundredths of a
Preferred Share at the same Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares of the Company issued after the
date of this Rights Agreement, including those issued pursuant to the Cynara
Merger and the Initial Public Offering, but prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date, whether
upon registration of transfer or exchange of such Common Shares outstanding on
the date of this Agreement or upon original issue or out of treasury
thereafter, 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 NATCO Group
Inc. and a Rights Agent dated as of May 15, 1998 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of NATCO Group Inc. 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. NATCO
Group Inc. will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. As described in the Rights Agreement, Rights issued to or
acquired by any Acquiring Person (as defined in the Rights Agreement)
shall, under certain circumstances, become null and void.
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With respect to certificates evidencing Common Shares of the Company
outstanding on the date of this Agreement or issued with the foregoing legend,
until the Distribution Date, outstanding Rights associated with the Common
Shares of the Company represented by such certificates shall be evidenced by
such certificates alone, and the surrender of any such certificate for
registration of transfer or exchange of the Common Shares evidenced thereby
shall also constitute surrender for registration of transfer or exchange of
outstanding Rights (as such Rights have been or shall be amended and
supplemented) associated with the Common Shares represented thereby.
(e) Until the Distribution Date (or, if earlier, the Redemption Date
or Final Expiration Date), the surrender for registration of transfer or
exchange of any certificate for Common Shares of the Company outstanding as of
the Close of Business on the date of this Agreement or issued hereafter shall
also constitute the surrender for registration of transfer or exchange of the
outstanding Rights associated with the Common Shares represented thereby.
(f) If the Company purchases or acquires any of its Common Shares
after the date hereof but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled and retired so that the
Company shall not be entitled to exercise any Rights associated with the Common
Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The form of Right
Certificates (and the forms of election to purchase Preferred Shares (or other
securities) and of assignment to be printed on the reverse thereof) shall in
form and substance be substantially the same as Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed or as may be necessary to conform to
usage. Subject to the provisions of Section 23 hereof, the Right Certificates,
whenever issued, shall be dated as of the date of authentication thereof, but,
regardless of any adjustments of the Purchase Price or the number of Preferred
Shares (or other securities) as to which a Right is exercisable (whether
pursuant to this Agreement or any future amendments or supplements to this
Agreement), or both, occurring after the Effective Date and prior to the date
of such authentication, such Right Certificates may, on their face, without
invalidating or otherwise affecting any such adjustment, expressly entitle the
holders thereof to purchase such number of Preferred Shares at the Purchase
Price per one one-hundredth (1/100) of a Preferred Share as to which a Right
would be exercisable if the Distribution Date were the date of this Agreement;
no adjustment of the Purchase Price or the number of Preferred Shares (or other
securities) as to which a Right is exercisable, or both, effected subsequent to
the date of authentication of any Right Certificate shall be invalidated or
otherwise affected by the fact that such adjustment is not expressly reflected
on the face or in the provisions of such Right Certificate.
Pending the preparation of definitive Right Certificates, the Company
may execute, and upon Company Order the Rights Agent shall authenticate and
send, by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares of the Company as of the Close of Business on the
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Distribution Date, temporary Right Certificates which are printed,
lithographed, typewritten, mimeographed or otherwise produced substantially of
the tenor of the definitive Right Certificates in lieu of which they are issued
and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Right Certificates may determine, as
evidenced by their execution of such Right Certificates.
If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Right Certificates, the Company shall
execute and the Rights Agent shall authenticate and deliver in exchange
therefor one or more definitive Right Certificates, evidencing a like number of
Rights. Until so exchanged, the temporary Right Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Right Certificates.
Section 5. Execution, Authentication and Delivery. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Right Certificates
may be manual or facsimile.
Right Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates, and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as in
this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Right Certificate a certificate of authentication substantially in the
form provided for herein executed by the Rights Agent by manual signature, and
such certificate upon any Right Certificate shall be conclusive evidence and
the only evidence that such Right Certificate has been duly authenticated and
delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a Rights Register (a "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the
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Company shall provide for the registration of Right Certificates and of
transfers of Rights. The Rights Agent is hereby appointed the registrar and
transfer agent (the "Rights Registrar") for the purpose of registering Right
Certificates and transfers of Rights as herein provided and the Rights Agent
agrees to maintain such Rights Register in accordance with such regulations so
long as it continues to be designated as Rights Registrar hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates that the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates.
If any mutilated Right Certificate is surrendered to the Rights Agent, the
Company shall execute and the Rights Agent shall authenticate and deliver in
exchange therefor a new Right Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.
If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Rights Agent that such Right
Certificate has
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been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Rights Agent shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Right Certificate, a new Right Certificate of like
tenor, for a like number of Rights and bearing a registration number not
contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
Every new Right Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Right Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date 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 its Corporate Trust Office, together with
payment of the Purchase Price for each one one-hundredth (1/100) of a Preferred
Share (or other securities) as to which the Rights are exercised, at or prior
to the earliest of (i) the Close of Business on the Final Expiration Date, (ii)
the time of redemption on the Redemption Date or (iii) the time at which such
Rights are mandatorily redeemed and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one one-hundredth (1/100) of a
Preferred Share pursuant to the exercise of a Right shall initially be seventy-
two and fifty/100ths dollars ($ 72.50), shall be subject to adjustment from
time to time as provided in Sections 12 and 14 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the securities to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 10 in cash, or by certified check
or cashier's check payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or other securities) certificates for such number of one one-hundredths
of a Preferred Share (or other securities) as are to be purchased and
registered in such name or names as may be designated by the registered holder
of such Right
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Certificate or, if appropriate, in the name of a depositary agent or its
nominee, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, and (B) requisition from a depositary agent
appointed by the Company, if any, depositary receipts representing such number
of one one-hundredths of a Preferred Share as are to be purchased and
registered in such name or names as may be designated by such holder (in which
case certificates for the Preferred Shares represented by such receipts shall
be deposited by the transfer agent with such depositary agent), and the Company
hereby directs such depositary agent to comply with all such requests, (ii)
when appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 15, (iii)
promptly after receipt of such certificates or depositary receipts registered
in such name or names as may be designated by such holder, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate and (iv) when appropriate, after receipt, promptly deliver such
cash to or upon the order of such holder.
(d) If the registered holder of the Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equal 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 15 hereof.
Section 9. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer or
exchange shall, if surrendered to the Company or to any of its other agents, be
delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be canceled by it. No
Right Certificates shall be authenticated in lieu of or in exchange for any
Right Certificates canceled as provided in this Section except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall so
cancel, any other Right Certificate purchased or acquired by the Company. The
Rights Agent shall deliver all canceled Right Certificates to the Company, or
shall, pursuant to a Company Order, destroy such canceled Right Certificates
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 10. Reservation and Availability of Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in
its treasury, the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights.
The Company further covenants and agrees that it will, from and after
the Distribution Date, cause to be reserved and kept available out of its
authorized and unissued Common Shares or any Common Shares held in its
treasury, the number of Common Shares of the Company that will be sufficient to
permit the exercise in full of all outstanding Rights if adjusted pursuant to
Section 12(a)(ii).
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares or Common Shares of the
Company issued upon exercise of Rights shall (subject to payment of the
Purchase Price) be duly authorized, validly issued, fully paid and
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nonassessable. The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Preferred Shares (or depositary receipts therefor) or Common Shares
of the Company upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax that may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or in respect of the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares or Common Shares of the Company upon exercise of Rights evidenced by
Right Certificates in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for transfer or exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares
or Common Shares of the Company 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 thereof) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
Section 11. Record Date. Each Person in whose name any certificate
for Preferred Shares or Common Shares of the Company is issued upon the
exercise of, or upon mandatory redemption and exchange of, Rights shall for all
purposes be deemed to have become the holder of record of the Preferred Shares
or Common Shares represented thereby on, and such certificate shall be dated,
(i) in the case of the exercise of Rights, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made, or (ii) in the
case of the mandatory redemption and exchange of Rights, the date of such
mandatory redemption and exchange; provided, however, that, if the date of such
surrender and payment or mandatory redemption and exchange is a date upon which
the transfer books of the Company for its Preferred Shares or Common Shares, as
the case may be, 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 such transfer books of the Company are open.
Prior to the exercise of (or the mandatory redemption and exchange of) the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares (or Common Shares of the
Company) for which the Rights shall be exercisable, including the rights 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 12. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and kind of shares of capital stock
of the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a dividend on
the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this
Section 12(a), the Purchase Price in effect at the
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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 capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised thereafter shall be entitled to receive,
upon payment of the Purchase Price for the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to such
date, the aggregate number and kind of shares of capital stock which, if such
Right had been duly exercised immediately prior to such date (at a time when
the Preferred Shares transfer books of the Company were open), such holder
would have acquired upon such exercise and been entitled to receive upon
payment or effectuation of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. If an event occurs which would require an adjustment under both Section
12(a)(i) and Section 12(a)(ii), the adjustment provided for in this Section
12(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 12(a)(ii).
(ii) Subject to action of the Board of Directors of the Company
pursuant to Section 25 of this Agreement, if any Person shall become an
Acquiring Person, each other holder of a Right shall, from and after the Close
of Business on the tenth Business Day after the Shares Acquisition Date, have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (y) 50% of
the then current per share market price of the Company's Common Shares
(determined pursuant to Section 12(d)) on the date such Person became an
Acquiring Person. If any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be afforded by the Rights.
Notwithstanding any other provision of this Agreement, from and after
the time any Person shall become an Acquiring Person, any Rights that are or
were acquired or beneficially owned by any such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be null and void and any
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate shall be issued
pursuant to this Agreement that represents Rights beneficially owned by an
Acquiring Person whose Rights would be null and void pursuant to the preceding
sentence or by any Associate or Affiliate thereof; no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or to
any Associate or Affiliate thereof or to any nominee (acting in its capacity as
such) of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or to
any Associate or Affiliate thereof or to any nominee (acting in its capacity as
such) of such Acquiring Person, Associate or Affiliate shall be canceled.
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(iii) If on or after the Distribution Date there shall not be
sufficient Common Shares of the Company issued but not outstanding, or
authorized but unissued, to permit the exercise in full of all outstanding
Rights in accordance with the foregoing subparagraph (ii), the Company agrees
to take all such action as is within its power, including appropriate action by
its Board of Directors, as may be necessary to amend the Company's charter to
authorize additional Common Shares for issuance upon exercise of the Rights.
If, notwithstanding the foregoing, the shareholders shall not approve an
amendment to the Company's charter authorizing such additional Common Shares,
the adjustment prescribed in Section 12(a)(ii) shall not be made but, in lieu
thereof, each holder of a Right shall thereafter have the right to receive,
upon exercise thereof in accordance with the terms of this Agreement, such
number of one one-hundredths of Preferred Shares as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is then exercisable
and dividing that product by (y) 50% of the then current per share market price
of one one-hundredth of a Preferred Share (determined pursuant to Section
12(d)) on the date such Person became an Acquiring Person.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exchangeable for Preferred Shares
or equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than
the current per share market price of the Preferred Shares (determined pursuant
to Section 12(d) on such record date), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (together with the aggregate of any additional consideration required
upon conversion or exchange in the case of any convertible or exchangeable
securities so to be offered) would purchase at such current market price and
the denominator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or purchase (or into
or for which the convertible or exchangeable securities so to be offered are
initially convertible or exchangeable); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case all or part of such subscription or
purchase price may be paid in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Preferred Shares owned by or held for the account of the
Company or any of its Subsidiaries shall not be deemed outstanding for the
purpose of any computation described in this Section 12(b). The adjustment
described in this Section 12(b) shall be made successively whenever such record
date is fixed; and, if none of such rights, options or warrants is so issued,
the Purchase Price shall be
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adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 12(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the
Preferred Shares (determined pursuant to Section 12(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 Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon the exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and, if such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of the Common Shares on any date shall be deemed to be
the average of the daily Closing Prices per share of such Common Shares for the
30 consecutive Trading Days immediately prior to such date; provided, however,
that, if the issuer of such Common Shares shall announce (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case, for the purposes of determining the current per share
market price of the Common Shares, such 30 consecutive Trading Day period shall
be reduced to the period commencing on the Trading Day immediately following
the ex-dividend or record date and ending on the Trading Day immediately
preceding the date of determination.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be determined in the same
manner as set forth above for Common Shares in paragraph (i) of this Section
12(d). If the current per share market price of the Preferred Shares cannot be
determined in the manner provided above, the "current per share market price"
of the Preferred Shares shall be conclusively deemed to be the current per
share market price of the Common Shares (determined in the manner provided
above) multiplied by one hundred.
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(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments that by reason of this Section
12(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 12
shall be made to the nearest cent or to the nearest ten-thousandth of a Common
Share or other share or one-millionth of a Preferred Share, as the case may be,
and references herein to the "number of one one-hundredths of a Preferred
Share" (or similar phrases) shall be construed to include fractions of one
one-hundredth of a Preferred Share. Notwithstanding the first sentence of this
Section 12(e), any adjustment required by this Section 12 shall be made no
later than the earlier of (i) three years from the date of the transaction that
requires such adjustment or (ii) the thirtieth day preceding the Final
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 12(a),
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right 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 contained in this Section 12, and the provisions of this Agreement,
including Sections 8, 10, 11 and 14, with respect to the Preferred Shares 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, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided
in Section 12(i), upon each adjustment of the Purchase Price pursuant to
Section 12(b) or 12(c), each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price per one one-hundredth of a Preferred Share, that number
of one one-hundredths of a Preferred Share obtained by (i) multiplying (x) the
number of one-hundredths of a share covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights outstanding in lieu of any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each Right outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-hundredths
of a Preferred Share for which a right was exercisable immediately prior to
such adjustment of the Purchase Price. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained
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by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. (Until such
record date, however, any adjustment in the number of one one-hundredths of a
Preferred Share for which a Right shall be exercisable made as required by this
Agreement shall remain in effect.) If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 12(i),
the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 15 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the 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 authenticated in the manner provided
for herein 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 one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one one-
hundredths of a Preferred Share that 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-hundredth of the amount of consideration per
Preferred Share determined by the Board of Directors of the Company to be
capital, or below one one-hundredth of the par value, if any, per Preferred
Share issuable upon exercise of the Rights, the Company agrees to take such
corporate action as is within its power, including appropriate action by its
Board of Directors, and that is, in the opinion of its counsel, necessary in
order that the Company may validly and legally issue fully paid and
nonassessable one one-hundredths of Preferred Shares at such adjusted Purchase
Price.
(l) In any case in which this Section 12 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
of the Preferred Shares or other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares or other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other
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appropriate instrument evidencing such holder's right to receive such
additional securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 12 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 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any combination or subdivision of the Preferred Shares, issuance
wholly for cash of any of the Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of
rights, options or warrants referred to in subsection (b) of this Section 12,
hereafter effected by the Company to holders of its Preferred Shares shall not
be taxable to such shareholders.
(n) If at any time prior to the Distribution Date, the Company shall
(i) declare or pay any dividend on the Common Shares of the Company payable in
such Common Shares or (ii) effect a subdivision or combination of such Common
Shares (by reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such case
(A) the number of one one-hundredths of a Preferred Share purchasable after
such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares of the Company outstanding immediately
before such event and the denominator of which is the number of such Common
Shares outstanding immediately after such event, and (B) each such Common Share
outstanding immediately after such event shall have issued with respect to it
that number of Rights which each such Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustment provided for
in this Section 12(n) shall be made successively whenever such a dividend is
declared or paid or such a subdivision or combination is effected. If an event
occurs which would require an adjustment under Section 12(a)(ii) and this
Section 12(n), the adjustments provided for in this Section 12(n) shall be in
addition and prior to any adjustment required pursuant to Section 12(a)(ii).
Section 13. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 12 or 14 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares of the Company and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of record of a
Right Certificate in accordance with Section 28 hereof.
Section 14. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) If, directly or indirectly, at any time after a Person has
become an Acquiring Person, (i) the Company shall consolidate with, or merge
with and into, any other Person, (ii) any Person shall merge with and into the
Company and the Company shall be the continuing or surviving corporation of
such merger and, in connection with any such merger, all or part of the Common
Shares of the Company shall
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be changed into or exchanged for stock or other securities of any other Person
(or the Company) or cash or any other property, or (iii) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or a series of two or more transactions, assets of
the Company or its Subsidiaries which constitute more than 50% of the assets or
which produce more than 50% of the earning power or cash flow of the Company
and its Subsidiaries (taken as a whole) to any Person other than the Company or
one or more of its Wholly-Owned Subsidiaries, then, and in each such case, the
Company agrees that, as a condition to engaging in any such transaction, it
will make or cause to be made proper provision so that (i) each holder of a
Right (except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Principal Party (as such term is hereinafter defined) as shall be equal to the
result obtained by (X) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable (without taking into account any adjustment previously made
pursuant to Section 12(a)(ii)) and dividing that product by (Y) 50% of the
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 12(d)) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company," as used herein, shall
thereafter be deemed to refer to such Principal Party; and (iv) the Principal
Party shall take such steps (including the reservation of a sufficient number
of shares of its Common Shares in accordance with Section 10) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not enter into any transaction of the kind referred to in this
Section 14 if at the time of such transaction there are outstanding any rights,
warrants, instruments or securities or any agreement or arrangements which, as
a result of the consummation of such transaction, would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights. The
provisions of this Section 14 shall similarly apply to successive mergers or
consolidations or sales or other transfers. For the purposes of this Section
14, 50% of the assets of the Company and its Subsidiaries shall be determined
by reference to the book value of such assets as set forth in the most recent
consolidated balance sheet of the Company and its Subsidiaries (which need not
be audited) and 50% of the earning power or cash flow of the Company and its
Subsidiaries shall be determined by reference to the mathematical average of
the operating income or cash flow, respectively, resulting from the operations
of the Company and its Subsidiaries for the two most recent full fiscal years
as set forth in the consolidated and consolidating financial statements of the
Company and its Subsidiaries for such years; provided, however, that, if the
Company has, during such period, engaged in one or more transactions to which
purchase accounting is applicable, such determination shall be made by
reference to the pro forma operating income of the Company and its Subsidiaries
giving effect to such transactions as if they had occurred at the commencement
of such two-year period.
(b) The term "Principal Party" shall mean: (i) in the case of any
transaction described in clause (i) or (ii) of the first sentence of Section
14(a), the Person that is the issuer of any securities
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into which Common Shares of the Company are converted in such merger or
consolidation, and, if no securities are so issued, the Person that is the
other party to such merger or consolidation; and (ii) in the case of any
transaction described in clause (iii) of the first sentence of Section 14(a),
the Person that is the party receiving the greatest portion of the assets
transferred pursuant to such transaction or transactions; provided, however,
that in any such case (1) if the Common Shares of such Person are not at such
time and have not been continuously over the preceding twelve months registered
under Section 12 of the Exchange Act and such Person is a direct or indirect
subsidiary of another Person the Common Shares of which is and has been so
registered, the term "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares of two or more of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized Common Shares which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 14
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement to this
Agreement providing for the terms set forth in subsections (a) and (b) of this
Section 14 and further providing that, as soon as practicable after the date of
any consolidation, merger, sale or transfer of assets referenced in the first
sentence of Section 14(a), the Principal Party shall: (i) prepare and file a
registration statement under the Securities Act with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
and shall use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Final Expiration Date; and (ii) shall deliver to
holders of the Rights historical financial statements for the Principal Party
and each of its Affiliates that comply in all respects with the requirements
for registration of a class of securities under the Exchange Act. The
provisions of this Section 14 shall similarly apply to successive mergers,
consolidations, sale or other transfers of assets. If an event subject to this
Section 14 shall occur at any time after the occurrence of an event subject to
Section 12(a)(ii), the Rights that have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 14(a).
Section 15. Fractional Rights and Fractional Shares. (a) the Company
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid
to such Person an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purpose of this Section 15(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.
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(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions that are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
that evidence fractional Preferred Shares (other than fractions that are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Shares
represented by such depository shares. If, on the Distribution Date or
thereafter, as a result of any adjustment effected hereunder in the number of
one one-hundredths of a Preferred Share as to which a Right has become
exercisable, a Person would otherwise be entitled to receive a fractional
Preferred Share that is not an integral multiple of one one-hundredth of a
Preferred Share, the Company shall, in lieu thereof, pay to such Person at the
time such Right is exercised as herein provided an amount in cash equal to the
same fraction (that is not an integral multiple of one one-hundredth of a
Preferred Share) of the current market value of one Preferred Share. For
purposes of this Section 15(b), the current market value of a Preferred Share
shall be the Closing Price of a Preferred Share for the Trading Day immediately
prior to the date of such exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, the Company
shall not be required to issue fractions of Common Shares of the Company upon
exercise of the Rights or to distribute certificates that evidence fractional
Common Shares. If, after any such adjustment or mandatory redemption and
exchange, a Person would otherwise be entitled to receive a fractional Common
Share of the Company upon exercise of any Right Certificate or upon mandatory
redemption and exchange as contemplated by Section 25, the Company shall, in
lieu thereof, pay to such Person at the time such Right is exercised as herein
provided or upon such mandatory redemption and exchange an amount in cash equal
to the same fraction of the current market value of one Common Share. For
purposes of this Section 15(c), the current market value of a Common Share of
the Company shall be the Closing Price of such a Common Share for the Trading
Day immediately prior to the date of such exercise or the date of such
mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
Section 16. Rights of Action. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any
registered holder of any Rights may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding,
judicial or otherwise, against the Company to enforce, or otherwise to act in
respect of, such holder's right to exercise such Rights in the manner provided
in the Right Certificate evidencing such Rights and in this Agreement. Without
limiting
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the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
(b) No right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
(c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such right or
remedy or constitute a waiver of any default hereunder or an acquiescence
therein. Every right and remedy given hereunder or by law to such holders may
be exercised from time to time, and as often as may be deemed expedient, by
such holders.
Section 17. 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 Shares
of the Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the Corporate Trust Office of the Rights Agent duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares 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 Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes, and
neither the Company nor the Rights Agent shall be affected by any notice
to the contrary.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose to be the holder of Preferred Shares, Common Shares of the Company or
any other securities of the Company which may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such,
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any of the rights of a stockholder of the Company, including any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, to give or withhold consent to any corporate action, to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 26) or to receive dividends or subscription rights until
the Right or Rights evidenced by such Right Certificate shall have been
exercised (or mandatorily redeemed and exchanged) in accordance with the
provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for Preferred Shares, Common Shares of the Company or other
securities of the Company, Company Order, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be executed and, where necessary, verified or acknowledged, by the
proper person or persons, or otherwise upon the advice of its counsel as set
forth in Section 20 hereof.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
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any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company or any
other Person only for its own negligence, bad faith or willful misconduct.
Anything herein to the contrary notwithstanding, in no event shall the Rights
Agent be liable for special, indirect, consequential or incidental loss or
damage of any kind whatsoever (including without limitation lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage.
(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 authentication 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 have any responsibility with respect
to the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or with respect to the validity
or execution of any Right Certificate (except its authentication 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 change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 12(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method, or amount
thereof) provided for in Sections 3, 12, 14, 24 and 25, or the ascertainment of
the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or Common Shares will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any shareholder, 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
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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.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss of the Company resulting from any such act,
default, neglect or misconduct, provided that reasonable care was exercised in
the selection and continued employment thereof.
Section 21. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the corporate
trust 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 corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 22. If at the time such
successor Rights Agent shall succeed to the agency created by this Agreement
any of the Right Certificates shall have been authenticated but not delivered,
any such successor Rights Agent may adopt the authentication of the predecessor
Rights Agent and deliver such Right Certificates so authenticated, and, if at
that time any of the Right Certificates shall not have been authenticated, any
successor Rights Agent may authenticate 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.
If at any time the name of the Rights Agent shall be changed and at such
time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate 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 22. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer
agent for the Common Shares of the Company and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent for the
Common Shares of the Company and the Preferred Shares by
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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 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 registered holder of a Right Certificate
(or, prior to the Distribution Date, of Common Shares), then any registered
holder of a Right Certificate (or, prior to the Distribution Date, of Common
Shares) may apply to any court of competent jurisdiction for the appointment of
a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation or other legal entity
organized, doing business and in good standing under the laws of the United
States or of any state of the United States, which is authorized to exercise
corporate securities transfer powers in the State of Texas and has at the time
of its appointment as Rights Agent a combined capital and surplus of at least
$25 million. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent for the Common Shares of the Company and the Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 22, 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 23. 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 Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
class of shares or other securities purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.
Section 24. Redemption. (a) The Rights may be redeemed by action of
the Board of Directors of the Company pursuant to paragraph (b) of this Section
24, or may be redeemed and exchanged by action of the Board of Directors of the
Company pursuant to Section 25 herein, but shall not be redeemed in any other
manner.
(b) The Board of Directors of the Company may, at its option, at any
time prior to the Close of Business on the Shares Acquisition Date redeem all
but not less than all the then outstanding Rights at a cash redemption price of
one cent ($0.01) per Right, appropriately adjusted to reflect any adjustment in
the number of Rights outstanding pursuant to Section 12(i) herein (such
redemption price being hereinafter referred to as the "Redemption Price"). Any
such redemption of the Rights by the Board of Directors may be made effective
at such time, on such basis and with such conditions as the Board of Directors
in its sole discretion may establish.
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(c) The right of the registered holders of Right Certificates to
exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of the Company
of a resolution authorizing and directing the redemption of the Rights pursuant
to paragraph (b) of this Section 24 (or, alternatively, if the Board of
Directors qualified such action as to time, basis or conditions, then at such
time, on such basis and with such conditions as the Board of Directors may have
established pursuant to such paragraph (b)); thereafter, the only right of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any redemption resolution pursuant to paragraph
(b) of this Section 24; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after the adoption of any redemption resolution pursuant to
paragraph (b) of this Section 24, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agents for the Common Shares of the Company. 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 shall state
the method by which the payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or associates may
acquire (other than, in the case of such Affiliates and Associates, in their
capacity as holders of Common Shares of the Company), redeem or purchase for
value any Rights at any time in any manner other than as specifically set forth
in this Section 24 or in Section 25 herein, and other than in connection with
the purchase of Common Shares of the Company prior to the Distribution Date.
Section 25. Mandatory Redemption and Exchange. (a) The Board of
Directors of the Company may, at its option, at any time after the Close of
Business on the Shares Acquisition Date, issue Common Shares of the Company in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 12(a)(ii) hereof) at
an exchange ratio of one Common Share for each two Common Shares for which each
Right is then exercisable pursuant to the provisions of Section 12(a)(ii)
hereof. Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such redemption and exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Voting Shares
for or pursuant to the terms of any such plan) together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Voting Shares then outstanding.
(b) As of the Close of Business on such date as the Board of
Directors of the Company shall order the mandatory redemption and exchange of
any Rights pursuant to subsection (a) of this Section 25 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 such number of Common Shares as is provided in paragraph (a) of this
Section 25. The Company shall
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promptly give public notice of any such redemption and exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such redemption and exchange. The Company promptly
shall mail a notice of any such redemption and exchange to all the holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of mandatory redemption and exchange shall state the method by
which the redemption and exchange of the Common Shares for Rights will be
effected and, in the event of any partial redemption and exchange, the number
of Rights which will be redeemed and exchanged. Any partial redemption and
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
12(a)(ii) hereof) held by each holder of Rights.
(c) If there shall not be sufficient Common Shares of the Company
issued but not outstanding, or authorized but unissued, to permit a mandatory
redemption and exchange of Rights in accordance with the provisions of this
Section 25, the Company agrees to take all such action as is within its power,
including appropriate action by its Board of Directors, as may be necessary to
amend the Company's charter to authorize additional Common Shares for issuance
upon such mandatory redemption and exchange. If, notwithstanding the
foregoing, the shareholders shall not approve an amendment to the Company's
charter authorizing such additional Common Shares, the Company, at its option,
may substitute Preferred Shares (or equivalent preferred shares, as such term
is defined in Section 12(b) hereof) for Common Shares of the Company, at the
initial rate of one one-hundredth of a Preferred Share (or equivalent preferred
share) for each Common Share, as appropriately adjusted.
Section 26. Notice of Certain Events. If the Company shall, on or
after the Distribution Date, propose (a) to pay any dividend or other
distribution payable in stock of any class of the Company or any Subsidiary of
the Company to the holders of its Preferred Shares, (b) to distribute to the
holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (c) to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly cash dividend),
(d) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power or cash flow of the Company and its
Subsidiaries (determined as provided in Section 14 herein) to, any other Person
(other than the Company or a Wholly-Owned Subsidiary or Wholly-Owned
Subsidiaries), (f) to effect the liquidation, dissolution or winding up of the
Company or (g) if the Rights have theretofore become exercisable with respect
to Common Shares of the Company pursuant to Section 12(a)(ii) herein, to
declare or pay any dividend or other distribution on the Common Shares payable
in Common Shares or in stock of any other class of the Company or any
Subsidiary of the Company or to effect a subdivision or combination of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares) then, in each such case, the Company shall give to each holder
of a Right Certificate, in accordance with Section 28 hereof, notice of such
proposed action, which shall specify the date of authorization of such action
-30-
35
by the Board of Directors of the Company and (i) the record date for such
dividend or other distribution or (ii) the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up,
subdivision or combination is to take place and the date of participation
therein by the holders of the Common Shares of the Company or the Preferred
Shares, or both, if any such date is to be fixed. Such notice shall be so
given in the case of any action covered by clause (a), (b) or (g) above at
least 20 days prior to the record date for determining holders of the Preferred
Shares or of the Common Shares of the Company, as the case as may be, for
purposes of such action, and, in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares or Common Shares
of the Company, as the case may be, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 28 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights under
Section 12(a)(ii) hereof.
Section 27. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file, no later than the
Distribution Date, and will use its best efforts to cause to be declared
effective, a registration statement under the Securities Act of 1933, as
amended, registering the offering, sale and delivery of the Preferred Shares
issuable upon exercise of the Rights, and the Company will, thereafter, use its
best efforts to maintain such registration statement (or another) continuously
in effect so long as any Rights remain outstanding and exercisable with respect
to Preferred Shares. Should the Rights become exercisable with respect to
securities of the Company or one of its Subsidiaries other than Preferred
Shares, the Company agrees that it will, to the extent legally required,
promptly thereafter prepare and file, or cause to be prepared and filed, and
will use its best efforts to cause to be declared effective, a registration
statement under such Act registering the offering, sale and delivery of such
other securities and the Company will, thereafter, use its best efforts to
maintain such registration statement (or another) continuously in effect so
long as any outstanding Rights are exercisable with respect to such securities.
The Company further agrees to use its best efforts, from and after the
Distribution Date, to qualify or register for sale the Preferred Shares or
other securities of the Company or one of its Subsidiaries issuable upon
exercise of the Rights under the securities or "blue sky" laws (to the extent
legally required thereunder) of all jurisdictions in which registered holders
of Right Certificates reside determined by reference to the Rights Register.
Section 28. 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 to made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
-31-
36
NATCO Group Inc.
0000 Xxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Secretary
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent 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:
ChaseMellon Shareholder Services, L.L.C.
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx
Attention: 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 Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein that may be defective
or inconsistent with any other provisions herein or to make any other
provisions in regard to matters or questions arising hereunder that the Company
and the Rights Agent may deem necessary or desirable, including extending the
Final Expiration Date and, provided that at the time of such amendment or
supplement the Distribution Date has not occurred, the period during which the
Rights may be redeemed; provided, however, that, after the Distribution Date,
any such amendment or supplement shall not materially and adversely affect the
interests of the holders of Right Certificates. Without limiting the
foregoing, the Board of Directors of the Company may by resolution adopted at
any time prior to such time as any Person becomes an Acquiring Person amend
this Agreement to lower the threshold set forth in the definitions of Acquiring
Person and Distribution Date in Section 1 from 15% to a percentage not less
than the greater of (i) any percentage greater than the largest percentage of
the outstanding Voting Shares then known to the Company to be beneficially
owned by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Voting Shares for or pursuant to the terms of any such plan),
and (ii) 10%.
Section 30. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
-32-
37
Section 31. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights.
Section 32. 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.
Section 33. 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.
Section 34. 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 35. 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.
Section 36. Effective Date. This Rights Agreement shall become
effective at the opening of business on the Effective Date.
-33-
38
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.
NATCO GROUP INC.
Attest:
By /s/ XXXXXXX X. XXXXXXXXX By /s/ XXXXXXX X. XXXXXX
------------------------------ ------------------------------
Title: Asst. Secretary Sr. Vice President
CHASEMELLON SHAREHOLDER SERVICES,
L.L.C.
As Rights Agent
Attest:
By /s/ XXXXXXX X. XXXXXXX, VP By /s/ R. XXXX XXXXX, VP
------------------------------ ------------------------------
Title: Authorized Officer Authorized Officer
-34-
39
EXHIBIT A
(Form of Right Certificate)
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER MAY 15, 2008 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS (AS DEFINED IN SECTION 1 OF THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID.
Right Certificate
NATCO GROUP INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of May 15, 1998 (the "Rights
Agreement") between NATCO Group Inc., a Delaware corporation ("the Company"),
and ChaseMellon Shareholder Services, L.L.C., a limited
liability company (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Dallas time) on May 15, 2008 at the
Corporate Trust Office of the Rights Agent, one one-hundredth (1/100) of a
fully paid nonassessable share of Series A Junior Participating Preferred
Stock, without par value (the "Preferred Shares"), of the Company, at a
purchase price of seventy-two and 50/100ths dollars ($72.50) per one one-
hundredth (1/100) of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of Preferred 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 May 15, 1998, based on the
Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredths of a Preferred Share that may be purchased upon the
exercise of Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the occurrence of certain events.
The Right Certificate is subject to all the terms, provisions ad
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and to which Rights Agreement reference
is hereby made for a full description of the rights, limitations
A-1
40
of rights, obligations, duties and immunities hereunder of the Rights Agent,
the Company and the holders of the Right Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and the
Corporate Trust Office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender hereof at the Corporate Trust Office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
one cent ($0.01) per Right or (ii) may be mandatorily redeemed and exchanged by
the Company in whole or in part for Preferred Shares or shares of the Company's
common stock, par value $0.01 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a
cash payment will be made as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company that may at any time be issuable on the
exercise hereof, not 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, including any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
to give or withhold consent to any corporate action, to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement) or to receive dividends or subscription rights, until the
Right or Rights evidenced by this Right Certificate shall have been exercised
or such Right or Rights shall have been mandatorily redeemed and exchanged by
the Company as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
A-2
41
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of _____________________, 19___.
ATTEST: NATCO GROUP INC.
By
-------------------------------- ----------------------------
Secretary
Authentication:
This is one of the Right Certificates referred to in the within-mentioned
Rights Agreement.
ChaseMellon Shareholder Services, L.L.C., as Rights Agent
By:
-----------------------------
Authorized Signature
A-3
42
(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 corporation, with full power of substitution.
Dated: ____________________, 19___.
-----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States of America.
----------------------------------------------------------------------------
(To be executed if a statement is correct)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
-----------------------------------
Signature
(Form of Reverse Side of Right Certificate -- continued)
A-4
43
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To: NATCO GROUP INC.
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to purchase the
Preferred Shares (or other securities) issuable upon the exercise of such
Rights and requests that certificates for such Preferred Shares (or for such
other securities) be issued in the name of:
Please insert social security
or other identifying number:
-----------------------------------------------
----------------------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
-----------------------------------------------
----------------------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------------------
Dated: _____________, 19___ ---------------------------
Signature
(Form of Reverse Side of Right Certificate -- continued)
Signature Guaranteed:
A-5
44
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
-----------------------------------------------------------------------------
(To be executed if statement is correct)
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
------------------------------------
-----------------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election 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.
If the certification set forth above in the Form of Assignment or the
Form of Election to Purchase, as the case may be, is not completed, the Company
and the Rights Agent will deem the beneficial owner of the Rights evidenced by
this Right Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Assignment or Election
will not be honored.
A-6
45
NATCO GROUP INC.
SUMMARY TERMS OF
STOCKHOLDER RIGHTS PLAN
ADOPTION OF PLAN;
TRANSFER OF RIGHTS;
RIGHTS CERTIFICATES: The Board of Directors has declared a dividend of
one Right for each share of Common Stock
outstanding. After the adoption of the Plan and
until the Distribution Date (as defined below),
the Rights are attached to and trade with the
Common Stock. After the Distribution Date, the
Rights detach; separate Rights certificates are
issued; and the Rights trade independently of the
Common Stock.
DISTRIBUTION DATE: The Distribution Date occurs and the Rights detach
on the earlier of the following:
(1) The tenth calendar day after the public
announcement that a person, including affiliates
and associates (an "Acquiring Person"), has
acquired beneficial ownership of 15% or more of
the Common Stock (the date of such public
announcement being referred to as the "Stock
Acquisition Date").
(2) The tenth business day (subject to extension
by the Board of Directors) after the commencement
of a tender offer or exchange offer for Common
Stock if, upon consummation thereof, the offeror,
including affiliates and associates, would be an
Acquiring Person.
EXERCISABILITY: The Rights become exercisable after the
Distribution Date. The Rights, in all likelihood,
would still not be exercised by the holders (since
the Purchase Price would likely still exceed the
market price) unless and until one of the Flip-In
or Flip- Over Events (described below) were to
occur.
After the Distribution Date, each Right entitles
the holder to purchase a unit consisting of one
one-hundredth of a share of Series A Junior
Participating Preferred Stock (one unit would be
essentially economically equivalent to one share
of Common Stock) at a fixed price (the "Purchase
Price"). (See below for a summary of the terms of
the Junior Participating Preferred Stock.) The
Purchase Price ($72.50 per one one-
46
hundredth of a share of Junior Participating
Preferred Stock) was determined by the Board when
the Plan was adopted and reflects the view of the
Board, with the advice of its investment bankers,
as to the potential long-term value of the Common
Stock over the life of the Plan.
FLIP-IN: If any person, including affiliates and
associates, becomes the beneficial owner of 15% or
more of the Common Stock and thus becomes an
Acquiring Person (a "Flip-In Event"), then each of
the Rights (other than Rights held by the
Acquiring Person and certain transferees) "flips
in" and becomes a Right to acquire, upon payment
of the Purchase Price, Common Stock of the Company
having a value (based on the average market price
over a 30-day period prior to the Flip-In Event)
equal to twice the Right's Purchase Price. The
Rights held by the Acquiring Person and certain
transferees become null and void.
If the Company does not have enough authorized
Common Stock, the Rights become exercisable with
respect to the Junior Participating Preferred
Stock permitting the holder to acquire such number
of one one-hundredths of a share of Junior
Participating Preferred Stock as have a value
equal to twice the Purchase Price.
EXCHANGE OPTION: After a Flip-In Event occurs and prior to a
person's becoming the beneficial owner of 50% or
more of the Common Stock, the Continuing Directors
may, in lieu of allowing the Rights to be
exercised, issue in exchange for, and in mandatory
redemption of, all or any pro rata portion of the
Rights one share of Common Stock or one
one-hundredth of a share of Junior Participating
Preferred Stock (or certain equivalent securities)
for each Right so exchanged.
FLIP-OVER EVENTS: If, on or after the Stock Acquisition Date, the
Company is acquired in a merger or other business
combination (e.g., the Company does not survive or
the Common Stock is changed or exchanged), or 50%
or more of the Company's assets or earning power
(on a consolidated basis) is sold or transferred
in one transaction or a series of related
transactions ("Flip- Over Events"), each Right
"flips over" and requires that provision be made
so as to entitle the holder to acquire, upon
payment of the Purchase Price, common stock of the
other party to the transaction having a market
value equal to twice the Purchase Price.
47
REDEMPTION: Rights are redeemable for $.01 per Right by action
of the Board of Directors at any time prior to the
tenth day following the Stock Acquisition Date.
AMENDMENT: Terms of the Rights may be amended by the Board of
Directors (1) prior to the Distribution Date in
any manner and (2) from and after the Distribution
Date in any manner not adverse to the interests of
Rights holders.
VOTING: The Rights have no voting power.
EXPIRATION: The Plan and the Rights expire 10 years from the
date of the Plan's adoption.
