Exhibit 1
XXXXX XXXXXXXX CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
Rights Agreement
Dated as of October 23, 1997
TABLE OF CONTENTS
Page
Section 1. Definitions................................. 1
Section 2. Appointment of Rights Agent................. 7
Section 3. Issue of Right Certificates................. 7
Section 4. Form of Right Certificates.................. 10
Section 5. Countersignature and Registration........... 11
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates........................ 12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights................. 13
Section 8. Cancellation and Destruction of
Right Certificates........................ 15
Section 9. Availability of Preferred Shares............ 15
Section 10. Preferred Shares Record Date................ 16
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights................ 17
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares....................... 27
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power................ 28
Section 14. Fractional Rights and Fractional Shares..... 29
Section 15. Rights of Action............................ 31
Section 16. Agreement of Right Holders.................. 32
Section 17. Right Certificate Holder Not Deemed a
Stockholder............................... 32
Section 18. Concerning the Rights Agent................. 33
Page
Section 19. Merger or Consolidation or Change of
Name of Rights Agent...................... 34
Section 20. Duties of Rights Agent...................... 35
Section 21. Change of Rights Agent...................... 38
Section 22. Issuance of New Right Certificates.......... 39
Section 23. Redemption.................................. 39
Section 24. Exchange.................................... 41
Section 25. Notice of Certain Events.................... 43
Section 26. Notices..................................... 44
Section 27. Supplements and Amendments.................. 45
Section 28. Successors.................................. 46
Section 29. Benefits of this Agreement.................. 46
Section 30. Severability................................ 46
Section 31. Governing Law............................... 46
Section 32. Counterparts................................ 46
Section 33. Descriptive Headings........................ 47
Signatures............................................... 48
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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Agreement, dated as of October 23, 1997, between
Xxxxx Xxxxxxxx Corporation, a Delaware corporation (the "Com-
pany"), and First Chicago Trust Company of New York, a national
banking association, as rights agent (the "Rights Agent").
The Board of Directors of the Company has authorized
and declared a dividend of one preferred share purchase right
(a "Right") for each Common Share (as hereinafter defined) of
the Company outstanding on December 3, 1997 (the "Record
Date"), each Right representing the right to purchase one
one-hundredth of a Preferred Share (as hereinafter defined),
upon the terms and subject to the conditions herein set forth,
and has further authorized and directed the issuance of one
Right with respect to each Common Share that shall become out-
standing between the Record Date and the earliest of the Dis-
tribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Definitions. For purposes of this Agree-
ment, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Per-
son, shall be the Beneficial Owner (as such term is hereinafter
defined) of 20% or more of the Common Shares of the Company
then outstanding, but shall not include the Company, any Sub-
sidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of
the Company, or any entity holding Common Shares for or pursu-
ant to the terms of any such plan. Notwithstanding the forego-
ing, no Person shall become an "Acquiring Person" as the result
of an acquisition of Common Shares of the Company by the Com-
pany which, by reducing the number of Common Shares of the Com-
pany outstanding, increases the proportionate number of Common
Shares of the Company beneficially owned by such Person to 20%
or more of the Common Shares of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Com-
pany, then such Person shall be deemed to be an "Acquiring Per-
son." Notwithstanding the foregoing, if the Board of Directors
of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), has become such
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inadvertently, and such Person divests as promptly as practi-
cable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person," as defined pursuant
to the foregoing provisions of this paragraph (a), then such
Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement unless such Person shall thereafter
become the beneficial owner of any additional Common Shares.
(b) "Affiliate" shall have the respective meaning
ascribed to such term in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of
this Agreement.
(c) "Associate" shall have the respective meaning
ascribed to such term in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of
this Agreement.
(d) A Person shall be deemed the "Beneficial Owner"
of and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Af-
filiates or Associates beneficially owns, directly or in-
directly;
(ii) which such Person or any of such Person's Af-
filiates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
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after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agree-
ments with and between underwriters and selling group mem-
bers with respect to a bona fide public offering of Secu-
rities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), war-
rants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, Securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such
tendered Securities are accepted for purchase or exchange;
or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any Security if the agreement, arrange-
ment or understanding to vote such Security (1) arises
solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicita-
tion made pursuant to, and in accordance with, the appli-
cable rules and regulations promulgated 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
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(iii) which are beneficially owned, directly or in-
directly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than cus-
tomary agreements with and between underwriters and sell-
ing group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B) hereof) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of "Ben-
eficial Ownership" to the contrary, the phrase "then outstand-
ing," when used with reference to a Person's Beneficial Own-
ership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the
number of such securities not then actually issued and out-
standing which such Person would be deemed to own beneficially
hereunder.
(e) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
California are authorized or obligated by law or executive
order to close.
(f) "Close of Business" on any given date shall mean
5:00 P.M., California time, on such date; provided, however,
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that, if such date is not a Business Day, it shall mean 5:00
P.M., California time, on the next succeeding Business Day.
(g) "closing price" shall have the meaning set forth
in Section 14(a) hereof.
(h) "Common Shares" when used with reference to the
Company shall mean the shares of common stock, par value $1.00
per share, of the Company. "Common Shares" when used with ref-
erence to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting
power of such other Person or, if such other Person is a Sub-
sidiary of another Person, the Person or Persons which ulti-
mately control such first-mentioned Person.
(i) "Company" shall have the meaning set forth in
the preamble hereto.
(j) "current market value" shall have the meaning
set forth in Section 14(a) hereof.
(k) "current per share market price" shall have the
meaning set forth in Section 11(d) hereof.
(l) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(m) "equivalent preferred shares" shall have the
meaning set forth in Section 11(b) hereof.
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(n) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(o) "Exchange Ratio" shall have the meaning set
forth in Section 24(a) hereof.
(p) "Final Expiration Date" shall have the meaning
set forth in Section 7 hereof.
(q) "NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotation System.
(r) "Person" shall mean any individual, firm, cor-
poration or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(s) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, par value $1.00 per
share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designations attached to
this Agreement as Exhibit A.
(t) "Purchase Price" shall have the meaning set
forth in Section 4 hereof.
(u) "Record Date" shall have the meaning set forth
in the recitals hereto.
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(v) "Redemption Date" shall have the meaning set
forth in Section 7(a) hereof.
(w) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(x) "Right" shall have the meaning set forth in the
recitals hereto.
(y) "Rights Agent" shall have the meaning set forth
in the preamble hereto.
(z) "Right Certificates" shall have the meaning set
forth in Section 3(a) hereof.
(aa) "Security" shall have the meaning set forth in
Section 11(d) hereof.
(bb) "Shares Acquisition Date" shall mean the first
date of public announcement by the Company or an Acquiring Per-
son that an Acquiring Person has become such.
(cc) "Subsidiary" of any Person shall mean any cor-
poration or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
(dd) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
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(ee) "Trading Day" shall have the meaning set forth
in Section 11(d) hereof.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Com-
pany and the holders of the Rights (who, in accordance with
Section 3 hereof, shall, prior to the Distribution Date, also
be the holders of the Common Shares of the Company) in accor-
dance 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 nec-
xxxxxx or desirable.
Section 3. Issue of Right Certificates. (a) Until
the earlier of (i) the 10th day after the Shares Acquisition
Date or (ii) the 10th 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 the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity hold-
ing Common Shares for or pursuant to the terms of any such
plan) of, or 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 of any
Subsidiary of the Company or any entity holding Common Shares
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of the Company 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 Common Shares of the Company aggregating 20% or more of the
then outstanding Common Shares of the Company (including any
such date which is after the date of this Agreement and prior
to the issuance of the Rights; the earlier of such dates being
herein referred to as the "Distribution Date"), (A) the Rights
will be evidenced (subject to the provisions of Section 3(b)
hereof) by the certificates for Common Shares of the Company
registered in the names of the holders thereof (which certifi-
xxxxx shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (B) the right to receive Right
Certificates will be transferable only in connection with the
transfer of Common Shares of the Company. As soon as practi-
cable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if
requested, send) 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 Distribution Date, at the address of
such holder shown on the records of the Company, a Right Cer-
tificate, evidencing one Right for each Common Share so held,
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in substantially the form of Exhibit B hereto (a "Right Cer-
tificate"). As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights
to Purchase Preferred Shares, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares of
the Company as of the Close of Business on the Record Date, at
the address of such holder shown on the records of the Company.
With respect to certificates for Common Shares of the Company
outstanding as of 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 Distribution
Date (or the earlier of the Redemption Date or the Final Expi-
ration Date), the surrender for transfer of any certificate for
Common Shares of the Company outstanding on the Record Date,
with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights asso-
ciated with the Common Shares represented thereby.
(c) Certificates for Common Shares of the Company
which become outstanding (including, without limitation, reac-
quired Common Shares of the Company referred to in the last
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sentence of this paragraph (c)) after the Record Date but prior
to the earliest of the Distribution Date, the Redemption Date
or the Final Expiration Date shall have impressed on, printed
on, written on or otherwise affixed to them the following leg-
end:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agree-
ment, dated as of October 23, 1997, between Xxxxx Xxxxxxxx
Corporation and First Chicago Trust Company of New York,
as rights agent (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 Xxxxx Xxxxxxxx Corporation. Under certain cir-
cumstances, as set forth in the Rights Agreement, such
Rights (as defined in the Rights Agreement) will be evi-
denced by separate certificates and will no longer be evi-
denced by this certificate. Xxxxx Xxxxxxxx Corporation
will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances, as set
forth in the Rights Agreement, Rights issued to any Person
(as defined in the Rights Agreement) who becomes an
Acquiring Person (as defined in the Rights Agreement) may
become null and void.
With respect to such certificates containing the foregoing leg-
end, until the Distribution Date, the Rights associated with
the Common Shares of the Company represented by such certifi-
xxxxx shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also con-
stitute the transfer of the Rights associated with the Common
Shares of the Company represented thereby. In the event that
the Company purchases or acquires any Common Shares of the Com-
pany after the Record Date but prior to the Distribution Date,
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any Rights associated with such Common Shares of the Company
shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Com-
mon Shares of the Company which are no longer outstanding.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof)
shall be substantially the same as Exhibit B hereto, and may
have such marks of identification or designation and such leg-
ends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the pro-
visions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Section 22 hereof, the
Right Certificates shall entitle the holders thereof to pur-
chase such number of one one-hundredths of a Preferred Share as
shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "Purchase Price"),
but the number of such one one-hundredths of a Preferred Share
and the Purchase Price shall be subject to adjustment as pro-
vided herein.
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Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents or its Treasurer, either
manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be at-
tested by the Secretary or an Assistant Secretary of the Com-
pany, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless counter-
signed. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Cer-
tificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same
force and effect as though the individual who signed such Right
Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Com-
pany by any individual who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although, at the date
of the execution of this Rights Agreement, any such individual
was not such an officer.
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Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books
for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates
and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates. Subject to the provisions of Sec-
tion 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void
pursuant to Section 11(a)(ii) hereof or that have been ex-
changed pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate
or Right Certificates entitling the registered holder to pur-
chase a like number of one one-hundredths of a Preferred Share
as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder xxxxx-
ing to transfer, split up, combine or exchange any Right Cer-
tificate or Right Certificates shall make such request in writ-
ing delivered to the Rights Agent, and shall surrender the
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Right Certificate or Right Certificates to be transferred,
split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and
deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Right
Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security reason-
ably satisfactory to it, and, at the Company's request, xxxx-
bursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated,
the Company will make and deliver a new Right Certificate of
like tenor to the Rights Agent for delivery to the registered
holder in lieu of the Right Certificate so lost, stolen, de-
stroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. (a) The registered holder of any
Right Certificate may exercise the Rights evidenced thereby
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(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 the
principal office of the Rights Agent, together with payment of
the Purchase Price for each one one-hundredth of a Preferred
Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on October 31, 2007 (the
"Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption
Date"), or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of
a Preferred Share purchasable pursuant to the exercise of a
Right shall initially be $150, shall be subject to adjustment
from time to time as provided in Section 11 or 13 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
shares 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 9 hereof by certified
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check, cashier's check or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be purchased
and the Company hereby irrevocably authorizes any such transfer
agent to comply with all such requests, or (B) requisition from
the depositary agent depositary receipts representing such num-
ber of one one-hundredths of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer
agent of the Preferred Shares with such depositary agent) and
the Company hereby directs such depositary agent to comply with
such request; (ii) when appropriate, requisition from the Com-
pany the amount of cash to be paid in lieu of issuance of frac-
tional shares in accordance with Section 14 hereof; (iii) after
receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or
names as may be designated by such holder; and (iv) when appro-
priate, after receipt, deliver such cash to or upon the order
of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Cer-
tificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
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Rights Agent to the registered holder of such Right Certificate
or to such holder's duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the pur-
pose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or to any of its agents,
be delivered to the Rights Agent for cancellation or in can-
celled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provi-
sions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Cer-
tificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right
Certificates, and, in such case, shall deliver a certificate of
destruction thereof to the Company.
Section 9. Availability of Preferred 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
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of Preferred Shares that will be sufficient to permit the exer-
cise in full of all outstanding Rights in accordance with Sec-
tion 7 hereof. The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
Preferred Shares delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable
shares.
The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issu-
ance or delivery of the Right Certificates or of any Preferred
Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be pay-
able in respect of any transfer or delivery of Right Certifi-
xxxxx to a Person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares in
a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to
issue or to deliver any certificates or depositary receipts for
Preferred Shares upon the exercise of any Rights until any such
tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or
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until it has been established to the Company's reasonable sat-
isfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Per-
son in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided,
however, that, if the date of such surrender and payment is a
date upon which the Preferred Shares transfer books of the Com-
pany are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Shares transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of
Preferred Shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
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Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. The Purchase Price, the number of
Preferred Shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as pro-
vided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Pre-
ferred 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 other-
wise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclas-
sification, 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 after such time shall be
entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immedi-
ately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, such holder
-22-
would have owned upon such exercise and been entitled to re-
ceive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 hereof, in the event any
Person becomes an Acquiring Person, each holder of a Right
shall thereafter 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 (A) 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 (B)
50% of the then current per share market price of the Common
Shares of the Company (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event. In the
event that 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 in-
tended to be afforded by the Rights.
-23-
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Ac-
xxxxxxx Person) shall be 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 Section 3 hereof that represents Rights ben-
eficially owned by an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or 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 void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Right Cer-
tificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but un-
issued to permit the exercise in full of the Rights in accor-
dance with subparagraph (ii) above, the Company shall take all
such action as may be necessary to authorize additional Common
Shares for issuance upon exercise of the Rights. In the event
the Company shall, after good faith effort, be unable to take
-24-
all such action as may be necessary to authorize such addi-
tional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exercise of
a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current
per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(b) In case 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 Preferred
Shares or equivalent preferred shares at a price per Preferred
Share or equivalent preferred share (or having a conversion
price per share, if a Security convertible into Preferred
Shares or equivalent preferred shares) less than the then cur-
rent per share market price of the Preferred Shares 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 Pre-
ferred Shares outstanding on such record date plus the number
-25-
of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conver-
sion price of the convertible Securities so to be offered)
would purchase at such current market price and the denominator
of which shall be the number of Preferred Shares outstanding on
such record date plus the number of additional Preferred Shares
and/or equivalent preferred shares to be offered for subscrip-
tion or purchase (or into which the convertible Securities so
to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exer-
cise of one Right. In case such subscription price may be paid
in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Com-
pany, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held
for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed; and,
in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase
-26-
Price which would then be in effect if such record date had not
been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with
a consolidation or merger in which the Company is the continu-
ing or surviving corporation) of evidences of indebtedness or
assets (other than a regular quarterly cash dividend or a divi-
dend payable in Preferred Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof),
the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect imme-
diately 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 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 state-
ment 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 then current
per share market price of the Preferred Shares; provided, how-
ever, 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
-27-
exercise of one Right. Such adjustments shall be made suc-
cessively whenever such a record date is fixed; and, in the
event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation here-
under, the "current per share market price" of any security (a
"Security") for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trad-
ing Days immediately prior to such date; provided, however,
that, in the event that the current per share market price of
the Security is determined during a period following the an-
nouncement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Secu-
rity or Securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security
and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassifica-
tion, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security. The clos-
ing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the
-28-
average of the closing bid and asked prices, regular way, in
either case, as reported in the principal consolidated transac-
tion reporting system with respect to Securities listed or
admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to Securities listed
on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security
is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the aver-
age of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the 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 the Security selected by the Board of Direc-
tors of the Company. The term "Trading Day" shall mean a day
on which the principal national securities exchange on which
the Security is listed or admitted to trading is open for the
transaction of business, or, if the Security is not listed or
admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares
-29-
shall be determined in accordance with the method set forth in
Section 11(d)(i) hereof. If the Preferred Shares are not pub-
licly traded, the "current per share market price" of the Pre-
ferred Shares shall be conclusively deemed to be the current
per share market price of the Common Shares as determined pur-
suant to Section 11(d)(i) hereof (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred.
If neither the Common Shares nor the Preferred Shares are pub-
licly held or so listed or traded, "current per share market
price" shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent.
(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, how-
ever, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calcula-
tions under this Section 11 shall be made to the nearest cent
or to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of any other share or Security as the case may
be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no
-30-
later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of
the expiration of the right to exercise any Rights.
(f) If, as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capi-
tal stock of the Company other than Preferred Shares, thereaf-
ter 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 Preferred Shares contained
in Section 11(a) through (c) hereof, inclusive, and the provi-
sions of Sections 7, 9, 10 and 13 hereof with respect to the
Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company sub-
sequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a Preferred Share
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i) hereof, upon each adjust-
ment of the Purchase Price as a result of the calculations made
-31-
in Sections 11(b) and (c) hereof, each Right outstanding imme-
diately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-hundredths of a Preferred Share (cal-
culated to the nearest one one-millionth of a Preferred Share)
obtained by (i) multiplying (A) the number of one
one-hundredths of a share covered by a Right immediately prior
to this adjustment by (B) the Purchase Price in effect immedi-
ately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of
any adjustment of the Purchase Price, to adjust the number of
Rights in substitution for any adjustment in the number of one
one-hundredths of a Preferred Share purchasable upon the exer-
cise of a Right. Each of the Rights 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.
Each Right held of record prior to such adjustment of the num-
ber of Rights shall become that number of Rights (calculated to
the nearest one ten-thousandth) obtained by dividing the Pur-
chase 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
-32-
a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days later than the date
of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant
to this Section 11(i), the Company shall, as promptly as prac-
ticable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for
the 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, ex-
ecuted and countersigned 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.
-33-
(j) Irrespective of any adjustment or change in the
Purchase Price or in the number of one one-hundredths of a Pre-
ferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may con-
tinue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth
of the then par value, if any, of the Preferred Shares issuable
upon exercise of the Rights, the Company shall take any corpo-
rate action which may, in the opinion of its counsel, be neces-
sary in order that the Company may validly and legally issue
fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall re-
quire that an adjustment in the Purchase Price be made effec-
tive as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event the issuing
to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above
the Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis
-34-
of the Purchase Price in effect prior to such adjustment; pro-
vided, however, that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary not-
withstanding, the Company shall be entitled to make such reduc-
tions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent
that it, in its sole discretion, shall determine to be advis-
able in order that any consolidation or subdivision of the Pre-
ferred Shares, issuance wholly for cash of any Preferred Shares
at less than the current market price, issuance wholly for cash
of Preferred Shares or securities which by their terms are con-
vertible into or exchangeable for Preferred Shares, dividends
on Preferred Shares payable in Preferred Shares or issuance of
rights, options or warrants referred to in Section 11(b)
hereof, hereafter made by the Company to holders of the Pre-
ferred Shares shall not be taxable to such stockholders.
(n) In the event that, at any time after the date of
this Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares pay-
able in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or
-35-
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 outstanding immediately before such
event and the denominator of which is the number of Common
Shares outstanding immediately after such event, and (B) each
Common Share outstanding immediately after such event shall
have issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in
this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as pro-
vided in Section 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for
-36-
the Common Shares or the Preferred Shares a copy of such cer-
tificate and (c) mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. In the event, directly or
indirectly, at any time after a Person has become an Acquiring
Person, (a) the Company shall consolidate with, or merge with
and into, any other Person, (b) any Person shall consolidate
with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of
such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock
or other securities of any other Person (or the Company) or
cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person other than the Company or one or
more of its wholly owned Subsidiaries, then, and in each such
case, proper provision shall be made so that (i) each holder of
a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the num-
ber of one one-hundredths of a Preferred Share for which a
-37-
Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Com-
mon Shares of such other Person (including the Company as suc-
cessor thereto or as the surviving corporation) as shall equal
the result obtained by (A) multiplying the then current Pur-
chase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price
of the Common Shares of such other Person (determined pursuant
to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) the issuer of
such Common Shares shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or trans-
fer, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with Sec-
tion 9 hereof) 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 consummate any such xxxxxxx-
dation, merger, sale or transfer unless, prior thereto, the
Company and such issuer shall have executed and delivered to
-38-
the Rights Agent a supplemental agreement so providing. The
Company shall not enter into any transaction of the kind re-
ferred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities out-
standing or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by
the Rights. The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other
transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence frac-
tional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of
this Section 14(a), the "current market value" of a whole Right
shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The "closing price" for
any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the clos-
ing bid and asked prices, regular way, in either case, as
-39-
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Rights are not listed
or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admit-
xxx to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organiza-
tion, the average of the closing bid and asked prices as fur-
nished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Company. If
on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue frac-
tions of Preferred Shares (other than fractions which are inte-
gral multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which evi-
dence fractional Preferred Shares (other than fractions which
-40-
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 depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of
a Preferred Share, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exer-
cised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share.
For the purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a Pre-
ferred Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) The holder of a Right, by the acceptance of the
Right, expressly waives such holder's right to receive any
fractional Rights or any fractional shares upon exercise of a
Right (except as provided above).
-41-
Section 15. Rights of Action. All rights of action
in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested
in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Cer-
tificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distri-
bution Date, of the Common Shares), may, in such holder's own
behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such
holder's right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an ad-
equate 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.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
-42-
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;
(b) after the Distribution Date, the Right Certifi-
xxxxx are transferable only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(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 certifi-
cate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of own-
ership or writing on the Right Certificate or the associated
Common Shares certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
-43-
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall any-
thing contained herein or in any Right Certificate be construed
to confer upon the holder of any Right Certificate, as such,
any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter sub-
mitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or sub-
scription rights, or otherwise, until the Right or Rights evi-
denced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Com-
pany 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 admin-
istration 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 neg-
ligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent
-44-
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 the Preferred Shares or Common Shares or for other securi-
ties of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, ex-
ecuted and, where necessary, verified or acknowledged, by the
proper person or persons, or otherwise upon the advice of coun-
sel as set forth in Section 20 hereof.
Section 19. 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 suc-
cessor Rights Agent shall be a party, or any corporation suc-
ceeding to the stock transfer or corporate trust powers of the
Rights Agent or any successor Rights Agent, shall be the suc-
cessor to the Rights Agent under this Agreement without the
-45-
execution or filing of any paper or any further act on the part
of any of the parties hereto; provided that such corporation
would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned;
and, in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights
Agent; and, in all such cases, such Right Certificates shall
have the full force provided in the Right Certificates and in
this Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates
shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and
deliver Right Certificates so countersigned; and, in case at
that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Cer-
tificates either in its prior name or in its changed name; and,
-46-
in all such cases, such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel shall be full and complete authorization and pro-
tection 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 conclu-
sively proved and established by a certificate signed by any
one of the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Treasurer or the Secre-
tary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
-47-
any action taken or suffered in good faith by it under the pro-
visions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any respon-
sibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof
by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any change
in the exercisability of the Rights (including the Rights be-
coming void pursuant to Section 11(a)(ii) hereof) or any ad-
justment in the terms of the Rights (including the manner,
method or amount thereof) provided for in Section 3, 11, 13, 23
or 24 hereof, or the ascertaining of the existence of facts
-48-
that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certifi-
xxxxx 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 res-
ervation of any Preferred Shares to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Pre-
ferred Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, ex-
ecute, acknowledge and deliver or cause to be performed, ex-
ecuted, 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 di-
rected to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice
President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in con-
nection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with
-49-
instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to
the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capac-
ity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or ac-
countable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company result-
ing from any such act, default, neglect or misconduct, provided
that reasonable care was exercised in the selection and contin-
ued employment thereof.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be dis-
charged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer
-50-
agent of the Common Shares or 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 of the Common Shares or
Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a succes-
sor 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 incapaci-
xxxxx Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit such holder's Right Certificate
for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing busi-
ness under the laws of the United States or of the State of
California (or of any other state of the United States so long
as such corporation is authorized to do business as a banking
-51-
institution in the State of California), in good standing, hav-
ing an office in the State of California, which is authorized
under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsi-
bilities 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 neces-
sary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer
agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
-52-
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form as
may be approved by the Board of Directors of the Company to
reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or prop-
erty purchasable under the Right Certificates made in accor-
dance with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors
of the Company may, at its option, at any time prior to such
time as any Person becomes an Acquiring Person, redeem all but
not less than all the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the
Rights by the Board of Directors of the Company may be made
effective at such time, on such basis and with such conditions
as the Board of Directors of the Company in its sole discretion
may establish.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23, and without any
further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the
-53-
holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such
redemption; 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 such action of the Board
of Directors of the Company ordering the redemption of the
Rights, the Company shall mail a notice of redemption to all
the holders of the then outstanding Rights at their last ad-
dresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice which
is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment
of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or pur-
chase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of Com-
mon Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include
-54-
Rights that have become void pursuant to the provisions of Sec-
tion 11(a)(ii) hereof) for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to re-
flect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwith-
standing the foregoing, the Board of Directors of the Company
shall not be empowered to effect such 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 Common 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 Common Shares then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of Common
Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly
-55-
shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of ex-
change will state the method by which the exchange of the Com-
mon Shares for Rights will be effected, and, in the event of
any partial exchange, the number of Rights which will be ex-
changed. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become
void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but un-
issued to permit any exchange of Rights as contemplated in ac-
cordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights. In the event
the Company shall, after good faith effort, be unable to take
all such action as may be necessary to authorize such addi-
tional Common Shares, the Company shall substitute, for each
Common Share that would otherwise be issuable upon exchange of
a Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current
-56-
per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue frac-
tions of Common Shares or to distribute certificates which evi-
dence fractional Common Shares. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole Common Share. For the purposes of this paragraph (d),
the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Sec-
tion 24.
Section 25. Notice of Certain Events. (a) In case
the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of the Preferred Shares or to
make any other distribution to the holders of the Preferred
Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of the 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
-57-
or options, (iii) to effect any reclassification of the Pre-
ferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more transac-
tions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other
Person, (v) to effect the liquidation, dissolution or winding
up of the Company, or (vi) to declare or pay any dividend on
the Common Shares payable in Common Shares or to effect a sub-
division, combination or consolidation 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 Sec-
tion 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock divi-
dend, or distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of
the Common Shares and/or Preferred Shares, if any such date is
to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 10 days
-58-
prior to the record date for determining holders of the Pre-
ferred Shares for purposes of such action, and, in the case of
any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall, as soon as practi-
cable thereafter, give to each holder of a Right Certificate,
in accordance with Section 26 hereof, a notice of the occur-
rence of such event, which notice shall describe such event and
the consequences of such event to holders of Rights under Sec-
tion 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by
the holder of any Right Certificate to or on the Company shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Xxxxx Xxxxxxxx Corporation
000 Xxxxx Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
-59-
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:
First Chicago Trust Company of New York
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Tender & Exchange Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Right Certificate shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of
the Company.
Section 27. Supplements and Amendments. The Company
may from time to time supplement or amend this Agreement with-
out the approval of any holders of Right Certificates in order
to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with
any other provisions herein, or to make any other provisions
with respect to the Rights which the Company may deem necessary
or desirable, any such supplement or amendment to be evidenced
by a writing signed by the Company and the Rights Agent; pro-
vided, however, that, from and after such time as any Person
becomes an Acquiring Person, this Agreement shall not be
-60-
amended in any manner which would adversely affect the inter-
ests of the holders of Rights. Without limiting the foregoing,
the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof to not
less than the greater of (a) the sum of .001% and the largest
percentage of the outstanding Common Shares then known by 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 Common Shares for or pursuant to the terms of
any such plan) and (b) 10%.
Section 28. Successors. All the covenants and pro-
visions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of
their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date,
the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and
-61-
the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, cov-
enants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated.
Section 31. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a con-
tract 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 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such coun-
terparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive head-
ings of the several Sections of this Agreement are inserted for
-62-
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
-63-
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and attested, all as of the
day and year first above written.
XXXXX XXXXXXXX CORPORATION
Attest:
By /s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxxx X. xxx Xxxxxxxxxxxx
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxx X. xxx Xxxxxxxxxxxx
Title: Assistant Secretary Title: Senior Vice President,
General Counsel and
Secretary
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
Attest:
By /s/ Xxxxxx Xxxxxx By /s/ Xxxxx X. Xxxxxxx
Name: Xxxxxx Xxxxxx Name: Xxxxx X. Xxxxxxx
Title: Assistant Vice Title: Assistant Vice
President President
-64-
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
XXXXX XXXXXXXX CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Xxxxx Xxxxxxxx Corporation, a corporation organized
and existing under the General Corporation Law of the State of
Delaware (hereinafter called the "Corporation"), hereby certi-
fies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on
October 23, 1997:
RESOLVED, that pursuant to the authority granted to
and vested in the Board of Directors of this Corporation (here-
inafter called the "Board of Directors" or the "Board") in ac-
cordance with the provisions of the Certificate of Incorpora-
tion, the Board of Directors hereby creates a series of Pre-
ferred Stock, par value $1.00 per share, of the Corporation
(the "Preferred Stock") and hereby states the designation and
number of shares, and fixes the relative rights, preferences,
and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of
such series shall be designated as "Series A Junior Partici-
pating Preferred Stock" (the "Series A Preferred Stock") and
the number of shares constituting the Series A Preferred Stock
shall be [ ]. Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided,
A-1
that no decrease shall reduce the number of shares of Series A
Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance
upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any
shares of any series of Preferred Stock (or any similar
stock) ranking prior and superior to the Series A Pre-
ferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock, in preference to the
holders of Common Stock, par value $1.00 per share (the
"Common Stock"), of the Corporation, and of any other jun-
ior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in
cash on the first day of March, June, September and Decem-
ber in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first is-
suance of a share or fraction of a share of Series A Pre-
ferred Stock, in an amount per share (rounded to the near-
est cent) equal to the greater of (a) $1 or (b) subject to
the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash divi-
dends, and 100 times the aggregate per share amount (pay-
able in kind) of all non-cash dividends or other distribu-
tions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quar-
terly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series A Preferred
Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combi-
nation or consolidation of the outstanding shares of Com-
mon Stock (by reclassification or otherwise than by pay-
ment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then
in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a frac-
tion, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and
A-2
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or dis-
tribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section immediately after it de-
clares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock);
provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a divi-
dend of $1 per share on the Series A Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Divi-
dend Payment Date.
(C) Dividends shall begin to accrue and be cumula-
tive on outstanding shares of Series A Preferred Stock
from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Pay-
ment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Pre-
ferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determi-
nation of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than
60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment here-
inafter set forth, each share of Series A Preferred Stock
A-3
shall entitle the holder thereof to 100 votes on all mat-
ters submitted to a vote of the stockholders of the Corpo-
ration. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combi-
nation or consolidation of the outstanding shares of Com-
mon Stock (by reclassification or otherwise than by pay-
ment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were enti-
tled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were out-
standing immediately prior to such event.
(B) Except as otherwise provided herein, in any
other Certificate of Designations creating a series of
Preferred Stock or any similar stock, or by law, the
holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise pro-
vided by law, holders of Series A Preferred Stock shall
have no special voting rights and their consent shall not
be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Preferred Stock
as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corpo-
ration shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolu-
tion or winding up) to the Series A Preferred Stock;
A-4
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Pre-
ferred Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in propor-
tion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior
(either as to dividends or upon liquidation, dis-
solution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to divi-
dends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock,
or any shares of stock ranking on a parity with the
Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of Direc-
tors, after consideration of the respective annual
dividend rates and other relative rights and prefer-
ences of the respective series and classes, shall
determine in good faith will result in fair and equi-
table treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation
unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at
such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series
A Preferred Stock purchased or otherwise acquired by the Corpo-
ration in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall
upon their cancellation become authorized but unissued shares
of Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and restrictions
A-5
on issuance set forth herein, in the Certificate of Incorpora-
tion, or in any other Certificate of Designations creating a
series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corpo-
ration, no distribution shall be made (1) to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Pre-
ferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received $100 per share,
plus an amount equal to accrued and unpaid dividends and dis-
tributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment here-
inafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of shares of Common Stock,
or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distribu-
tions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Com-
mon Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Pre-
ferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock out-
standing immediately after such event and the denominator of
which is the number of shares of Common Stock that were out-
standing immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combi-
nation or other transaction in which the shares of Common Stock
are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, sub-
ject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities,
A-6
cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock pay-
able in shares of Common Stock, or effect a subdivision or com-
bination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall
be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock out-
standing immediately after such event and the denominator of
which is the number of shares of Common Stock that were out-
standing immediately prior to such event.
Section 8. No Redemption. The shares of Series A
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall
rank, with respect to the payment of dividends and the distri-
bution of assets, junior to all series of any other class of
the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incor-
poration of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences
or special rights of the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of
Series A Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations
is executed on behalf of the Corporation by its Chairman of the
Board and attested by its Secretary this 23rd day of October,
1997.
Name:
Title: Chairman of the Board
Attest:
Secretary
A-7
Exhibit B
Form of Right Certificate
Certificate No. R- ___Rights
NOT EXERCISABLE AFTER , 2007 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUB-
JECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
XXXXX XXXXXXXX CORPORATION
This certifies that , or regis-
tered assigns, is the registered owner of the number of Rights
set forth above, each of which entitles the owner thereof, sub-
ject to the terms, provisions and conditions of the Rights
Agreement, dated as of October 23, 1997 (the "Rights Agree-
ment"), between Xxxxx Xxxxxxxx Corporation, a Delaware corpora-
tion (the "Company"), and First Chicago Trust Company of New
York (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., California time,
on October 31, 2007 at the principal office of the Rights
Agent, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $1.00 per
share, of the Company (the "Preferred Shares"), at a purchase
price of $150 per one one-hundredth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certif-
icate (and the number of one one-hundredths of a Preferred
Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number
and Purchase Price as of Decmber 3, 1997, based on the Pre-
ferred 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 which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate
B-1
are subject to modification and adjustment upon the happening
of certain events.
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, which
terms, provisions and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agree-
ment reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immuni-
ties 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 offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certifi-
cate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exer-
cised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certifi-
xxxxx for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Right Certificate (i) may be re-
deemed by the Company at a redemption price of $.01 per Right
or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $1.00
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-hun-
dredth 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 which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter sub-
mitted to stockholders at any meeting thereof, or to give or
B-2
withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised
as provided in the Rights Agreement.
This Right Certificate shall not be valid or obliga-
tory for any purpose until it shall have been countersigned by
the Rights Agent.
WITNESS the facsimile signature of the proper offic-
ers of the Company and its corporate seal. Dated as of
, 1997.
ATTEST: XXXXX XXXXXXXX CORPORATION
By
Name: Name:
Title: Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By
Name:
Title:
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: , 199
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na-
tional Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the
United States.
-----------------------------------------------------------------------
The undersigned hereby certifies that the Rights evi-
denced 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
-----------------------------------------------------------------------
B-4
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: XXXXX XXXXXXXX CORPORATION
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right
Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the bal-
ance 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: , 199
Signature
B-5
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the Na-
tional Association of Securities Dealers, Inc., or a commercial
bank or trust company having an office or correspondent in the
United States.
B-6
Form of Reverse Side of Right Certificate -- continued
----------------------------------------------------------------------
The undersigned hereby certifies that the Rights evi-
denced 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
-----------------------------------------------------------------------
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any
change whatsoever.
In the event 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 to Purchase will not be honored.
B-7
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On October 23, 1997, the Board of Directors of Xxxxx
Xxxxxxxx Corporation (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $1.00 per share, of the Com-
pany (the "Common Shares"). The dividend is payable on Decem-
ber 3, 1997 (the "Record Date") to the stockholders of record
on that date. Each Right entitles the registered holder to
purchase from the Company one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value $1.00
per share, of the Company (the "Preferred Shares") at a price
of $150 per one one-hundredth of a Preferred Share (the "Pur-
chase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and First Chicago Trust
Company of New York (successor trustee to First Interstate Bank
of California), as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired ben-
eficial ownership of 20% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors of the Company
prior to such time as any person or group of affiliated persons
becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or ex-
change offer the consummation of which would result in the ben-
eficial ownership by a person or group of 20% or more of the
outstanding Common Shares (the earlier of such dates being the
"Distribution Date"), the Rights will be evidenced, with re-
spect to any of the Common Share certificates outstanding as of
the Record Date, by such Common Share certificate with a copy
of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with the
Common Shares. Until the Distribution Date (or earlier redemp-
tion or expiration of the Rights), new Common Share certifi-
xxxxx issued after the Record Date upon transfer or new issu-
ance of Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender
for transfer of any certificates for Common Shares outstanding
as of the Record Date, even without such notation or a copy of
this Summary of Rights being attached thereto, will also con-
stitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidenc-
ing the Rights ("Right Certificates") will be mailed to holders
of record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on October 31, 2007 (the "Final
Expiration Date"), unless the Final Expiration Date is extended
or unless the Rights are earlier redeemed or exchanged by the
Company, in each case, as described below.
The Purchase Price payable, and the number of Pre-
ferred Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the
Preferred Shares; (ii) upon the grant to holders of the Pre-
ferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price, or securities convertible
into Preferred Shares with a conversion price, less than the
then-current market price of the Preferred Shares; or (iii)
upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular periodic
cash dividends paid out of earnings or retained earnings or
dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of
one one-hundredths of a Preferred Share issuable upon exercise
of each Right are also subject to adjustment in the event of a
stock split of the Common Shares or a stock dividend on the
Common Shares payable in Common Shares or subdivisions, con-
solidations or combinations of the Common Shares occurring, in
any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment
of $1 per share but will be entitled to an aggregate dividend
of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will
be entitled to a minimum preferential liquidation payment of
C-2
$100 per share but will be entitled to an aggregate payment of
100 times the payment made per Common Share. Each Preferred
Share will have 100 votes, voting together with the Common
Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the
amount received per Common Share. These rights are protected
by customary antidilution provisions.
Because of the nature of the Preferred Shares' div-
idend, liquidation and voting rights, the value of the one one-
hundredth interest in a Preferred Share purchasable upon exer-
cise of each Right should approximate the value of one Common
Share.
In the event that the Company is acquired in a merger
or other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person or
group has become an Acquiring Person, proper provision will be
made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such trans-
action will have a market value of two times the exercise price
of the Right. In the event that any person or group of affili-
ated or associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other
than Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to
receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person or
group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio of
one Common Share, or one one-hundredth of a Preferred Share (or
of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than frac-
tions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be
C-3
evidenced by depositary receipts) and, in lieu thereof, an ad-
justment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of
exercise.
At any time prior to the acquisition by a person or
group of affiliated or associated persons of beneficial own-
ership of 20% or more of the outstanding Common Shares, the
Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made
effective at such time on such basis with such conditions as
the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board
of Directors of the Company without the consent of the holders
of the Rights, including an amendment to lower certain thresh-
olds described above to not less than the greater of (i) the
sum of .001% and the largest percentage of the outstanding Com-
mon Shares then known to the Company to be beneficially owned
by any person or group of affiliated or associated persons and
(ii) 10%, except that from and after such time as any person or
group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of
the holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company, in-
cluding, without limitation, the right to vote or to receive
dividends.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a Reg-
istration Statement on Form 8-A dated October , 1997. A copy
of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not pur-
port to be complete and is qualified in its entirety by refer-
ence to the Rights Agreement, which is hereby incorporated
herein by reference.
C-4
