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CINCINNATI XXXX INC.
and
THE FIFTH THIRD BANK
Rights Agent
RIGHTS AGREEMENT
Dated as of April 29, 1997
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TABLE OF CONTENTS
RIGHTS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1. CERTAIN DEFINITIONS.. . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. APPOINTMENT OF RIGHTS AGENT.. . . . . . . . . . . . . . . . . 8
SECTION 3. ISSUE OF RIGHT CERTIFICATES.. . . . . . . . . . . . . . . . . 8
SECTION 4. FORM OF RIGHT CERTIFICATES. . . . . . . . . . . . . . . . . . 11
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.. . . . . . . . . . . . . . 12
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.. . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. . . . . . 18
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. . . . . . . 19
SECTION 10. PREFERRED SHARES RECORD DATE. . . . . . . . . . . . . . . . . 21
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS.. . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES.. . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.. . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.. . . . . . . . . . . 42
SECTION 15. RIGHTS OF ACTION. . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.. . . . . . . . . . . . . . . . . 46
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.. . . . . . 47
SECTION 18. CONCERNING THE RIGHTS AGENT.. . . . . . . . . . . . . . . . . 47
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.. . 48
SECTION 20. DUTIES OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . . . 49
SECTION 21. CHANGE OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . . . 53
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. . . . . . . . . . . . . . 54
SECTION 23. REDEMPTION AND TERMINATION. . . . . . . . . . . . . . . . . . 55
SECTION 24. EXCHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 25. NOTICE OF CERTAIN EVENTS. . . . . . . . . . . . . . . . . . . 57
SECTION 26. NOTICES.. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 27. SUPPLEMENTS AND AMENDMENTS. . . . . . . . . . . . . . . . . . 59
SECTION 28. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . 60
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SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.. . 60
SECTION 30. BENEFIT OF THIS AGREEMENT . . . . . . . . . . . . . . . . . . 61
SECTION 31. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 32. GOVERNING LAW.. . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 33. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 34. DESCRIPTIVE HEADINGS. . . . . . . . . . . . . . . . . . . . . 62
EXHIBIT A FORM OF CERTIFICATE OF AMENDMENT TO AMENDED ARTICLES OF
INCORPORATION OF CINCINNATI XXXX INC. . . . . . . . . . . . . A-i
EXHIBIT B FORM OF RIGHTS CERTIFICATE . . . . . . . . . . . . . . . . . B-i
EXHIBIT C SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES. . . . . . . . C-i
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RIGHTS AGREEMENT
Agreement, dated as of April 29, 1997, between Cincinnati Xxxx Inc., an
Ohio corporation (the "Corporation"), and The Fifth Third Bank, an Ohio
corporation (the "Rights Agent").
The Board of Directors of the Corporation has authorized and declared a
dividend of one Right on each Common Share (as hereinafter defined) of the
Corporation outstanding at the close of business on May 2, 1997 (the "Record
Date"), each right representing the right to purchase one one-hundredth (1/100)
of a Series A Preferred Share, without par value, of the Corporation having the
rights and preferences set forth in the Form of Certificate of Amendment to
Amended Articles of Incorporation of Cincinnati Xxxx Inc. attached hereto as
Exhibit A, upon the terms and subject to the conditions herein set forth (the
"Rights"), and has further authorized the issuance of one Right with respect to
each Common Share of the Corporation that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Expiration Date and
the Final Expiration Date (as such terms are hereinafter defined), except as
otherwise shall be provided herein.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter defined) who
or which, together with all Affiliates and Associates (as such terms are
hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of 15% or more of the Common Shares of the Corporation then
outstanding, but shall not include an Exempt Person (as such term is hereinafter
defined); PROVIDED, HOWEVER, that if the Board of Directors of the Corporation
determines in good faith that a Person who would otherwise be an "Acquiring
Person" has become such inadvertently (including, without limitation, because
(i) such Person was unaware that it beneficially owned a percentage of Common
Shares that would otherwise cause such Person to be an "Acquiring Person" or
(ii) such Person was aware of the extent of its Beneficial Ownership of Common
Shares but had no actual knowledge of the consequences of such Beneficial
Ownership under this Rights Agreement) and without any intention of changing or
influencing control of the Corporation, and such Person, as promptly as
practicable after being advised of such determination divested or divests
himself, herself or itself of Beneficial Ownership of a sufficient number of
Common Shares so that such Person would no longer be an Acquiring Person, then
such Person shall not be deemed to be or to have become an "Acquiring Person"
for any purposes of this Agreement. Notwithstanding the foregoing, (i) if a
Person would be deemed an Acquiring Person upon the adoption of this Agreement
because of ownership of 15% or more but less than 20% of the Common Shares on
such date, such Person will not be deemed an Acquiring Person for any purposes
of this Agreement unless and until such Person acquires Beneficial Ownership of
any additional Common Shares (other than pursuant to a dividend or distribution
paid or made by the Corporation on the outstanding Common Shares in Common
Shares or pursuant to a split or subdivision of the outstanding Common Shares),
after the adoption of this Agreement unless upon the consummation of the
acquisition of such additional Common Shares such Person does not own 15% or
more of the Common Shares then outstanding, and (ii) no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Corporation which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
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of the Common Shares then outstanding, PROVIDED, HOWEVER, that if a Person shall
become the Beneficial Owner of 15% or more of the Common Shares then outstanding
by reason of such share acquisitions by the Corporation and thereafter become
the Beneficial Owner of any additional Common Shares (other than pursuant to a
dividend or distribution paid or made by the Corporation on the outstanding
Common Shares in Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), then such Person shall be deemed to be an "Acquiring
Person" unless upon the consummation of the acquisition of such additional
Common Shares such Person does not own 15% or more of the Common Shares then
outstanding. For all purposes of this Agreement, any calculation of the number
of Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date hereof.
(b) "Act" shall mean the Securities Act of 1933.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations (the
"General Rules") promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended (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:
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(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing), (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than these Rights
at any time prior to the occurrence of a Triggering Event (as hereinafter
defined) but thereafter including Rights acquired from and after the
Distribution Date (as hereinafter defined) other than Rights acquired pursuant
to Section 3(a), Section 11(i) and Section 22 hereof), warrants 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 or dispose of or "beneficial
ownership" (as determined pursuant to Rule 13d-3 of the General Rules) of
(including pursuant to any agreement, arrangement or understanding, whether or
not in writing); PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security under this clause (B)
as a result of an agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding (1) arises solely from a
revocable proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the
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applicable rules and regulations of the Exchange Act, and (2) is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person or
any of such Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the proviso to
clause (B) of subparagraph (ii) of this paragraph (c)) or disposing of any
securities of the Corporation.
(e) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M., New York
City time, on such date; PROVIDED, HOWEVER, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(g) "Common Shares" when used with reference to the Corporation shall mean
the Common Shares, par value $1.00 per share, of the Corporation. "Common
Shares" when used with reference to any Person other than the Corporation shall
mean the capital stock of such Person with the greatest voting power (or, if
such Person is a subsidiary of another Person, of the Person which ultimately
controls such first-mentioned Person), or the equity securities or other equity
interest having power to control or direct the management of such Person.
(h) "Common Share Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
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(i) "Current Per Share Market Price" shall have the meaning set forth in
Section 11(d)(i) hereof.
(j) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(k) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(l) "equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.
(m) "Exchange Act" shall have the meaning set forth in Section 1(d)
hereof.
(n) "Exempt Person" shall mean the Corporation, any Subsidiary (as such
term is hereinafter defined) of the Corporation, in each case including, without
limitation, in its fiduciary capacity, or, any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation, or any entity or trustee
holding Common Shares for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee benefits for
employees of the Corporation or of any Subsidiary of the Corporation.
(o) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(p) "Final Expiration Date" shall mean the close of business on May 2,
2007.
(q) "Person" shall mean any individual, firm, corporation, partnership or
other entity and shall include any successor (by merger or otherwise) of such
entity.
(r) "Preferred Shares" shall mean Series A Preferred Shares, without par
value, of the Corporation.
(s) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(t) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
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(u) "Record Date" shall have the meaning set forth in the second paragraph
of this Agreement.
(v) "Redemption Price" shall have the meaning set forth in section 23(a)
hereof.
(w) "Rights" shall have the meaning set forth in the second paragraph of
this Agreement.
(x) "Rights Certificates" shall have the meaning set forth in Section 3
hereof.
(y) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
(z) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
section 11(a)(iii) hereof.
(aa) "Section 13 Event" shall mean any event described in Clause (i), (ii)
or (iii) of Section 13(a) hereof.
(bb) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition shall include, without
limitation, a report filed pursuant to Section 13(d) promulgated under the
Exchange Act) by the Corporation or by an Acquiring Person that an Acquiring
Person has become such or such earlier date as a majority of the Board of
Directors shall become aware of the existence of an Acquiring Person.
(cc) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(dd) "Subsidiary" shall mean, with reference to any Person, any corporation
of which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned,
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directly or indirectly, by such Person, and any corporation or other entity that
is otherwise controlled by such Person.
(ee) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ff) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
(gg) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Any determination required by the definitions contained in this Section
shall be made by the Board of Directors of the Corporation in their good faith
judgment, which determination shall be final and binding on the Rights Agent.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Corporation hereby appoints
the Rights Agent to act as agent for the Corporation in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier of (i) the
close of business on the tenth Business Day after the Shares Acquisition Date,
or (ii) the close of business on the tenth Business Day after the date of the
commencement of, or first public announcement of the intent to commence, a
tender or exchange offer by any Person (other than an Exempt Person) if upon
consummation thereof, any such Person other than an Exempt Person would be the
Beneficial Owner of 15% or more of the Common Shares then outstanding (the
earlier of such dates, including any such date which is after the date of this
Agreement and prior to the issuance of the Rights, being herein referred to as
the "Distribution Date"): (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for
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Common Shares registered in the names of the holders thereof (which certificates
for Common Shares shall be deemed also to be Right Certificates) and not by
separate Right Certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying Common Shares (including a
transfer to the Corporation). As soon as practicable after the Distribution
Date, the Rights Agent will send, by first-class, insured, postage prepaid mail,
or, if requested by or on behalf of a holder, shall otherwise deliver, to each
record holder of Common Shares as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Corporation, one
or more Right Certificates, in substantially the form of Exhibit B hereto (the
"Right Certificates"), evidencing one Right for each Common Share so held,
subject to adjustment. In the event that an adjustment in the number of Rights
per Common Share has been made pursuant to Section 11(p) hereof, at the time of
distribution the Corporation shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Right Certificates
evidencing only whole numbers of Rights are distributed and cash is paid in lieu
of fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) As promptly as practicable following the Record Date, the Corporation
will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of Common Shares as
of the close of business on the Record Date, at the address of such holder shown
on the records of the Corporation. With respect to certificates for Common
Shares outstanding as of the Record Date until the Distribution Date, the Rights
will be evidenced by such certificates for Common Shares registered in the names
of the holders thereof, and the
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registered holders of the Common Shares shall also be the registered holders of
the associated Rights. Until the Distribution Date (or the earlier Expiration
Date or Final Expiration Date), the transfer of any certificate for Common
Shares in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
(c) Rights shall be issued in respect of all Common Shares that shall
become outstanding after the Record Date but prior to the earliest of the
Distribution Date or the Expiration Date or the Final Expiration Date, except as
otherwise provided in Section 11(p). Certificates representing such Common
Shares (and certificates delivered pursuant to Sections 6 and 7(d)) shall also
be deemed to be Right Certificates, and shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between
Cincinnati Xxxx Inc. and The Fifth Third Bank, as Rights Agent,
dated as of April 29, 1997 as the same may be amended from time
to time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file
at the principal executive offices of Cincinnati Xxxx Inc. and
available for inspection by the holder of this certificate.
Under certain circumstances set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. Cincinnati Xxxx Inc.
will mail to the holder of this certificate a copy of the Rights
Agreement without charge within five days after receipt of a
written request therefor. Under certain circumstances set forth
in the Rights Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement) and any subsequent holder of such Rights may become
null and void. In no event may the Rights be exercised after
May 2, 2007.
With respect to such certificates containing the foregoing legend, until
the Distribution Date (or the earlier Expiration or Final Expiration Date), the
Rights associated with the Common Shares represented by such certificates shall
be evidenced by such certificates alone and
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registered holders of Common Shares shall also be the registered holders of the
associated Rights, and the transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Corporation purchases or otherwise
acquires any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be deemed cancelled
and retired so that the Corporation shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
Section 4. FORM OF RIGHT CERTIFICATES. (a) The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form set forth as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Corporation may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever issued, shall be dated as of the Distribution Date, and
on their face shall entitle the holders thereof to purchase such number of
Preferred Shares as shall be set forth therein at the price per share set forth
therein (the "Purchase Price"), but in any event the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
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(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
hereof that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which is part of a plan, arrangement or understanding which has as a primary
purpose or effect avoidance of Section 7(e) hereof, and any Right Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in this
sentence, shall contain (to the extent feasible and otherwise reasonably
identifiable as such) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented hereby may
become void in the circumstances specified in Section 7(e) of
such Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Corporation by its Chairman of the Board,
President or any Vice President, either manually or by facsimile signature, and
have affixed thereto the Corporation's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the
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Corporation, 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 so countersigned. In case any officer of the Corporation
who shall have signed any of the Right Certificates shall cease to be such
officer of the Corporation before countersignature by the Rights Agent and
issuance and delivery by the Corporation, such Right Certificates nevertheless
may be countersigned by the Rights Agent, and issued and delivered by the
Corporation, with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the Corporation; and any
Right Certificate may be signed on behalf of the Corporation by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Corporation to sign such Right Certificate, although at the date
of the execution of this Rights Agreement any such person was not such an
officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at one of its offices in the United States, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates, the
Right Certificate number 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 Sections 4(b), 7(e) and 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 Expiration Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to
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purchase a like number of Preferred Shares (or, following a Triggering Event,
Common Shares, other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Neither the
Rights Agent nor the Corporation shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and the Corporation shall have been provided with such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Corporation shall
reasonably request. Thereupon the Rights Agent shall, subject to Sections 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Corporation 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.
Subject to the provisions of Section 7(e) hereof, at any time after the
Distribution Date and prior to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, upon receipt by the Corporation
and the Rights Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them,
and, at the
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Corporation's request, reimbursement to the Corporation 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 Corporation
will make and deliver a new Right Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purposes, together
with payment of the Purchase Price with respect to each surrendered Right for
the total number of shares (or other securities or property, as the case may be)
as to which such surrendered Rights are exercisable, at or prior to the earlier
of (i) the Final Expiration Date; (ii) the time at which the Rights are redeemed
as provided in Section 23 (such earlier time being herein referred to as the
"Expiration Date"); or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof. At the close of business on the Final Expiration
Date, the Rights shall become null and void.
(b) The "Purchase Price" for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $125, shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.
15
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right (in cash, or by certified
bank check or money order payable to the order of the Corporation) of the
Purchase Price for the shares (or other securities or property, as the case may
be) to be purchased and an amount equal to any applicable transfer tax, the
Rights Agent shall thereupon promptly (i) (A) requisition from the Corporation
or any transfer agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent) certificates for the number of Preferred Shares to
be purchased and the Corporation will comply and hereby authorizes its transfer
agent to comply with all such requests, or (B) if the Corporation shall have
elected to deposit the Preferred Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Corporation hereby directs the
depositary agent to comply with such request, (ii) when appropriate, requisition
from the Corporation the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14, (iii) promptly after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when
appropriate, after receipt thereof, promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate. In the event that the
Corporation is obligated to issue other securities (including Common Shares) of
the Corporation, pay cash and/or distribute other property pursuant to Section
11(a)
16
hereof, the Corporation will make all arrangements necessary so that such other
securities, cash and/or property are available for distribution by (or on behalf
of) the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the occurrence of a Triggering Event, any Rights beneficially owned by (a)
an Acquiring Person, or an Associate or Affiliate of an Acquiring Person, (b) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (c) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (i) a transfer (whether or not
for consideration) from the Acquiring Person (or from any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or in any
such Associate or Affiliate) or to any Person with whom the Acquiring Person (or
any such Associate or Affiliate) has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (ii) a transfer which the
Board of Directors otherwise concludes in good faith (whether before or after
such transfer) is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), and subsequent
transferees of such Persons, shall become null and void without any
17
further action, and any holder of such Rights shall thereupon have no rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise, from and after the occurrence of a Triggering Event.
The Corporation shall use all reasonable efforts to insure that the provisions
of this Section 7(e) and Section 4(b) hereof are complied with, but shall have
no liability to any holder of Rights or other Person for the inability to make
any determinations with respect to an Acquiring Person or their Affiliates,
Associates or transferees hereunder. No Right Certificate shall be issued
pursuant to Section 3 or Section 6 hereof that represents Rights that are or
have become void pursuant to the provisions of this paragraph, and any Right
Certificate delivered to the Rights Agent that represents Rights that are or
have become void pursuant to the provisions of this paragraph shall be
cancelled. The Corporation will inform the Rights Agent of any rights that are
of have become void pursuant to the provisions of this paragraph.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Corporation shall be obligated to undertake any action
with respect to a registered holder upon the occurrence of any purported
transfer or exercise as set forth in Section 6 or in this Section 7 unless the
certificate contained in the form of assignment or election to purchase set
forth on the reverse side of the Right Certificate surrendered for such transfer
or exercise shall have been completed and signed by the registered holder
thereof and the Corporation shall have been provided with such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Corporation shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if
18
surrendered to the Corporation or to any of its agents, be delivered to the
Rights Agent for cancellation or in cancelled 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 provisions of
this Rights Agreement. The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the Corporation otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Right Certificates to the Corporation, or shall, at the written request of the
Corporation, destroy such cancelled Right Certificates and deliver a certificate
of destruction thereof to the Corporation.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. The
Corporation covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares and/or other securities) or
any authorized and issued Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) held in its treasury,
the number of Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) that will be sufficient (in
accordance with the terms of this Agreement, including Section 11(a)(iii)
hereof) to permit the exercise in full of all outstanding Rights.
So long as the Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) issuable upon the
exercise of Rights may be listed on any national securities exchange or
quotation system, the Corporation shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares reserved for such
19
issuance to be listed on such exchange or quotation system upon official notice
of issuance in connection with such exercise.
The Corporation shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a registration
statement under the Securities Act of 1933 (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the date of the expiration of the Rights. The Corporation will also take
such action as may be appropriate under the blue sky laws of the various states.
The Corporation may temporarily suspend, for a period of time not to exceed
ninety (90) days, the exercisability of the Rights in order to prepare and file
such registration statement or in order to comply with such blue sky laws. Upon
any such suspension, the Corporation shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction, unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
has been declared effective.
The Corporation covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
20
The Corporation 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 issuance or delivery of the Right Certificates or of
any Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) upon the exercise of Rights. The
Corporation shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a person
other than, or the issuance or delivery of certificates for the Preferred Shares
(and, following the occurrence of a Triggering Event, Common Shares and/or other
securities) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, or to issue or deliver
any certificates for Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it
has been established to the Corporation's satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name any
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the Preferred Shares (or
Common Shares and/or other
21
securities, as the case may be) transfer books of the Corporation 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 (or Common Shares and/or other securities, as the case may
be) transfer books of the Corporation 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 shareholder of the Corporation with respect to
shares for which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Corporation, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Corporation 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 Preferred Shares into a smaller number of shares or (D) issue
any shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Corporation is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of 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
22
aggregate number and kind of shares of capital stock which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Shares transfer books of the Corporation were open, he would have owned upon
such exercise and been entitled to receive 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 Corporation
issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required by Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person then, promptly following the first occurrence
of a Section 11(a)(ii) Event, proper provision shall be made so that each holder
of a Right (except as provided below and in Section 7(e) hereof) shall hereafter
have the right to receive, upon exercise thereof at the then-current Purchase
Price in accordance with the terms of this Agreement, in lieu of a number of one
one-hundredths of a Preferred Share, such number of Common Shares of the
Corporation as shall equal the result obtained by (x) multiplying the then-
current Purchase Price by the then-number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of the
current per share market price (determined pursuant to Section 11(d) hereof) of
the Common Shares on the date of such first occurrence (such number of shares,
the "Adjustment Shares"); PROVIDED, HOWEVER, that
23
the Purchase Price and the number of Common Shares so receivable upon exercise
of a Right shall thereafter be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof.
(iii) The Corporation may at its option (evidenced by a certified
resolution of the Corporation's Board of Directors delivered to the Rights
Agent) substitute for a Common Share issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number of fractions of
Preferred Shares having an aggregate current market value equal to the current
per share market price of a Common Share. In the event that the number of
Common Shares which are authorized by the Corporation's Articles of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Corporation shall to the extent permitted by applicable law
and any material agreement then in effect to which the Corporation is a party:
(A) determine the excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, (other than Rights
which have become void pursuant to Section 7(e)) make adequate provision to
substitute for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Shares or
other equity securities of the Corporation (including, without limitation,
preferred shares which the Board of Directors of the Corporation has deemed to
have the same value as Common Shares (such preferred shares, "common share
equivalents")), (4) debt securities of the Corporation, (5) other assets, or (6)
any combination of the foregoing, having an aggregate value equal to the Current
Value (less the
24
amount of any reduction in the Purchase Price), where such aggregate value has
been determined by the Board of Directors of the Corporation based upon the
advice of one or more investment or financial advisors selected by the Board of
Directors of the Corporation; provided, however, if the Corporation shall not
have made adequate provisions to deliver value pursuant to clause (B) above
within thirty (30) days following the first occurrence of a Section 11(a)(ii)
Event (the "Section 11(a)(ii) Trigger Date"), then the Corporation shall be
obligated to deliver, to the extent permitted by applicable law and any material
agreement then in effect to which the Corporation is a party, upon the surrender
for exercise of a Right and without requiring payment of the Purchase Price,
Common Shares (to the extent available) and then, if necessary, such number of
Preferred Shares or fractions of Preferred Shares (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Board of Directors of the Corporation shall determine in
good faith that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Corporation may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Corporation determines that some action need
be taken pursuant to the second and/or third sentences of this Section
11(a)(iii), the Corporation (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such second sentence and to determine
25
the value thereof. In the event of any such suspension, the Corporation shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d) hereof) of the Common Shares on the Section
11(a)(ii) Trigger Date and the value of any "common share equivalents" shall be
deemed to have the same value as the Common Shares on such date.
(iv) In lieu of issuing Common Shares in accordance with
subparagraph (ii) of this Section 11(a), the Corporation may with respect to
each Right, if a majority of members of the Board of Directors determines that
such action is in the best interests of the Corporation and not contrary to the
interests of the holders of Rights, make adequate provision to substitute for
the Adjustment Shares, (x) upon the surrender for exercise of a Right and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in Purchase
Price, (3) Common Shares, or other equity securities of the Corporation
(including without limitation common share equivalents), (4) debt securities of
the Corporation, (5) other assets or (6) any combination of the foregoing having
an aggregate value equal to the Current Value where such aggregate value has
been determined by the Board of Directors of the Corporation based upon the
advice of one or more investment or financial advisers selected by the Board of
Directors of the Corporation or (y) upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, (1) cash, (2) Common Shares
or other equity securities of the Corporation (including, without limitation,
common share equivalents), (3) debt securities of the Corporation, (4) other
assets or (5) any combination of the foregoing, having an aggregate value equal
to the Spread
26
where such aggregate value has been determined by the Board of Directors of the
Corporation based upon the advice of one or more investment or financial
advisors selected by the Board of Directors of the Corporation.
(b) In the event the Corporation 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 current per share
market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of 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 conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription 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
27
Corporation issuable upon exercise 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 Corporation, whose determination shall be
described in a statement filed with the Rights Agent (and shall be binding on
the Rights Agent and the holders of the Rights). Preferred Shares owned by or
held for the account of the Corporation shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights or
warrants are not so issued, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In the event the Corporation 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
Corporation is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular periodic cash dividend out of the
earnings or the retained earnings of the Corporation or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current per share market price of the Preferred Shares (as defined in Section
11(d)) on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such
28
subscription rights or warrants applicable to one Preferred Share, and the
denominator of which shall be such current per share market price of the
Preferred Shares PROVIDED, HOWEVER, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Corporation to be issued upon exercise of one
Right. Such adjustments shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) and Section 11(a)(iv) hereof,
the "current per share market price" of the Preferred Shares on any date shall
be deemed to be the average of the daily closing prices per share of such
Preferred Shares for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; PROVIDED, HOWEVER, that in
the event that the current per share market price of the Preferred Shares is
determined during a period following the announcement by the issuer of such
Preferred Shares of (A) a dividend or distribution on such Preferred Shares
payable in such Preferred Shares or securities convertible into such Preferred
Shares (other than the Rights), or (B) any subdivision, combination or
reclassification of such Preferred Shares, and prior to the expiration of the
requisite 30 Trading Day period after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current per share market
price" shall be appropriately adjusted to take into account ex-dividend trading.
The closing price for each Trading Day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
29
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 Preferred Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Preferred Shares are listed or admitted to trading or, if the
Preferred Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
Preferred Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Preferred Shares selected by the Board of Directors of the
Corporation. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Preferred Shares are listed or
admitted to trading is open for the transaction of business or, if the Preferred
Shares are not listed or admitted to trading on any national securities
exchange, a Business Day. If the current per share market price of the
Preferred Shares on any date cannot be determined in the manner provided above,
the "current per share market price" of the Preferred Shares shall be
conclusively deemed to be an amount equal to one hundred (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Shares occurring after the date of
this Agreement) multiplied by the current per share market price of the Common
Shares. If neither the Common Shares nor the Preferred Shares is publicly held
or so listed or traded, "current per share market price" shall
30
mean the fair value per share as determined in good faith by the Board of
Directors of the Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) and Section 11(a)(iv) hereof,
the "current per share market price" of the Common Shares shall be determined in
the same manner set forth above for Preferred Shares in clause (i) of this
Section 11(d), PROVIDED, HOWEVER, for the purpose of any computation in Section
11(a)(iii) and Section 11(a)(iv) hereof, the "current per share market price" of
the Common Shares on any date shall be deemed to be the average of the daily
closing prices per Common Share for ten consecutive Trading Days immediately
following such date and the reference to the "30 Trading Day period" in Section
11(d)(i)(B) shall be the "ten Trading Day period."
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in such Purchase Price; PROVIDED, HOWEVER,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a Common Share or other share or one-
ten-thousandth of a Preferred Share, as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the Expiration Date.
31
(f) If as a result of an adjustment made pursuant to Section 11 or Section
13 hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Preferred Shares, thereafter the
number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in Section 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m) and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Corporation subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Preferred Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election as provided
in Section 11(i), below, upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one one-
hundredths of a Preferred Share (calculated to the nearest one-millionth)
obtained by (i) multiplying (x) the number of one one-hundredths of a share
covered by a Right immediately prior to such adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
32
(i) In lieu of the adjustment in the number of one one-hundredths
of a Preferred Share purchasable upon the exercise of a Right, the Corporation
instead may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of shares
or fraction of a Preferred Share for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Corporation
shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if Right Certificates
have been issued, shall be at least 10 days later than the date of such public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Corporation shall, as
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Corporation, 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 Corporation, 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
33
issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Corporation, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Right Certificates on the
record date specified in such public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of Preferred Shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of Preferred Shares which were expressed
in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Preferred Shares
issuable upon exercise of the Rights, the Corporation shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.
(1) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Corporation may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the
Preferred Shares and other capital stock or securities of the Corporation, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Corporation, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
PROVIDED, HOWEVER, that the Corporation shall deliver to such holder a due xxxx
or other appropriate instrument evidencing such holder's
34
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Corporation shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any of the Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, stock dividends
or issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Corporation to holders of its Preferred Shares shall not
be taxable to such shareholders.
(n) The Corporation covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one or
more transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Corporation and its Subsidiaries (taken as a
whole) to, any other Person if at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) The Corporation covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take)
35
any action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Corporation shall at any time after the date of this Agreement
and prior to the Distribution Date (i) pay a dividend on the outstanding Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares,
(iii) combine the outstanding Common Shares into a smaller number of shares, or
(iv) issue any shares of its capital stock in a reclassification of the
outstanding Common Shares, the number of Rights associated with each Common
Share then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each Common Share following any such event
(including other Common Shares issued after the date of such event, but prior to
the Distribution Date) shall equal the result obtained by multiplying the number
of Rights associated with each Common Share immediately prior to such event by a
fraction the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of Common Shares outstanding immediately
following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Corporation shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Shares and the Common Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance with
Section 26 hereof.
36
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that, following the Distribution Date, directly or
indirectly, (i) the Corporation shall consolidate with, or merge with and into,
any other Person, and the Corporation shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) any Person shall consolidate
with the Corporation, or merge with and into the Corporation, and the
Corporation shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the Common Shares of the Corporation shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (iii) the Corporation 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 more than 50% of the assets or
earning power of the Corporation and its Subsidiaries (taken as a whole and
calculated on the basis of the Corporation's most recent regularly prepared
financial statements) to any Person or Persons (other than the Corporation or
any Subsidiary of the Corporation), then, and in each such case, proper
provision shall be made so that (1) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then-current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradable Common Shares of the Principal Party (as
hereinafter defined), not subject to any rights of first refusal or similar
rights, as shall be equal to the result obtained by (x) multiplying the then-
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable (or, if such Right is not currently
exercisable for a number of Preferred Shares, the number of such fractional
shares for which it
37
was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event and dividing that product by (y) 50% of the current per share market price
of the Common Shares of such Principal Party (determined pursuant to Section
11(d)(ii) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; PROVIDED that the Purchase Price and the number of Common
Shares of such Principal Party issuable upon exercise of each Right shall be
further adjusted as provided in Section 11(f) of this Agreement to reflect any
events occurring in respect of such Principal Party after the date of such
consolidation, merger, sale or transfer; (2) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Corporation
pursuant to this Agreement; (3) the term "Corporation" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of an event set forth in Section 13(a) hereof;
(4) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares in accordance with
Section 9) in connection with such consummation as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights; PROVIDED that, upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares, rights,
warrants and other property which such holder would have been entitled to
receive had such holder, at the time of such transaction, owned the Common Stock
of the Principal Party
38
receivable upon the exercise of a Right pursuant to this Section 13(a), and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property; and (5) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any
event set forth in this Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or (ii)
of the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into which the Common Shares are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
of the shares of Common Stock which has the greatest aggregate market value of
shares outstanding, or (B) if no securities are so issued, (x) the Person that
is the other party to the merger, if such Person survives said merger, or, if
there is more than one such Person, the Person the shares of Common Stock of
which have the greatest aggregate market value of shares outstanding or (y) if
the Person that is the other party to the merger does not survive the merger,
the Person that does survive the merger (including the Corporation if it
survives) or (z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in (iii) of
the first sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if such Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be
39
determined, whichever of such Persons as is the issuer of Common Stock having
the greatest aggregate market value of shares outstanding; PROVIDED, HOWEVER,
that in any case described in the foregoing clauses (b)(i) and (b)(ii), (1) if
the Common Shares of such Person are not at such time and have not been
continuously over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been so
registered, "Principal Party" shall refer to such other Person; (2) in case such
Person is a Subsidiary, directly or indirectly, of more than one Person, the
Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Shares having the greatest aggregate market value or (3) if such Person
is owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in clauses (1) and (2) above shall apply to each of the owners
having an interest in the venture as if the Person owned by the joint venture
was a Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such interests.
(c) The Corporation shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have sufficient Common Shares
authorized to permit the full exercise of the Rights and prior thereto the
Corporation and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and that such consolidation, merger,
sale or transfer of assets shall not result in a default by the Principal Party
under this Agreement as the
40
same shall have been assumed by the Principal Party pursuant to paragraphs (a)
and (b) of this Section 13 and further providing that, as soon as practicable
after the date of any consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date; and
(ii) use its best efforts, if the Common Stock of the Principal
Party shall be listed or admitted to trading on the New York Stock Exchange or
on another national securities exchange to list or admit to trading (or continue
the listing of) the Rights and the securities purchasable upon exercise of the
Rights on the New York Stock Exchange or such securities exchange, or, if the
Common Stock of the Principal Party shall not be listed or admitted to trading
on the New York Stock Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to be reported
by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.
41
(d) In case the Principal party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue (other than to holders of Rights pursuant
to this Section 13), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then current market price per
share thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of Section 13, then, in
such event, the Corporation hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless prior thereto the Corporation
and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event a Section
13 Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
42
(a) The Corporation shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price for any Trading Day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
similar system then in use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board of Directors of the Corporation. If on any such date no such
market maker is making a market in the Rights, the
43
fair value of the Rights on such date as determined in good faith by the Board
of Directors of the Corporation shall be used.
(b) The Corporation shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a share may, at
the election of the Corporation, be evidenced by depositary receipts, pursuant
to an appropriate agreement between the Corporation 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. In lieu
of fractional Preferred Shares that are not integral multiples of one one-
hundredth of a Preferred Share, the Corporation shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of a Preferred Share. For purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Corporation shall
not be required to issue fractions of Common Shares upon exercise of the Rights
or to distribute certificates which evidence fractional Common Shares. In lieu
of fractional Common Shares, the Corporation shall pay to the registered holders
of Right Certificates at the time such Rights are
44
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this Section 14(c),
the current market value of one Common Share shall be the closing price of one
Common Share (as determined pursuant to of Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Certificate (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 Distribution Date, of any Common Shares), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Corporation to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in
the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
45
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Corporation 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 Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Corporation and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Corporation or the Rights Agent) for
all purposes whatsoever, and neither the Corporation nor the Rights Agent shall
be affected by any notice to the contrary.
(d) notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform any of
its obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided,
46
however, the Corporation must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Corporation which may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Corporation agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability or expense incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. This
47
indemnification shall survive the expiration or termination of the Rights or
this Rights Agreement.
The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for Preferred or Common Shares or for other securities of the
Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust or
stock transfer business of the Rights Agent or any successor Rights Agent, or
any Affiliate of the Rights Agent that undertakes the corporate trust or stock
transfer business of the Rights Agent as a result of transfer, assignment or any
other means, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 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
48
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 Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Corporation 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 Corporation), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation,
49
the identity of any Acquiring Person and the determination of "current per share
market price") be proved or established by the Corporation prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the President, a Vice President, the Treasurer or the
Secretary of the Corporation and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Corporation
and any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except as to its
countersignature thereof); nor shall it be responsible for any breach by the
Corporation of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any adjustment required under
the provisions of Sections 11 or 13 hereof or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
50
Rights evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares to be purchased pursuant to this Agreement or
any Right Certificate or as to whether any Preferred Shares or Common Shares
will, when so issued, be validly authorized and issued, fully paid and
nonassessable; nor will it be liable for any federal or state transfer taxes or
charges that may be due upon the issuance or transfer of any Preferred Share,
Common Share or Right Certificate.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, a Vice President, the Secretary
or the Treasurer of the Corporation, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with the
instructions of any such officer or for any delay in acting while waiting for
such instructions. When applying to any such officer for instructions, the
Rights Agent may set forth in writing (i) any proposed action or omission of the
Rights Agent with respect to its duties or obligations under this Agreement and
(ii) the date on or after which the Rights Agent proposes such action will be
taken or omitted. Such date shall not be less than three Business Days after
any such officer receives such application for instructions from the Rights
Agent, unless an earlier date is
51
mutually agreed to by the parties. Unless the Rights Agent has received written
instructions from the Corporation (including any such officer) with respect to
such proposed action or omission prior to such date (or, if longer, in the case
of a proposed action to be taken, prior to the Rights Agent actually taking such
action), the Rights Agent shall not be liable for the actions or omissions set
forth in such application, provided that such action or omission does not
violate any express provisions of this Rights Agreement. The Rights Agent may
execute and exercise any of the rights or powers vested in it or perform any
duty hereunder either itself or by or through its attorneys or agents.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Corporation or for any other
legal entity.
(i) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
hereunder if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to the Rights Agent.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response
52
to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first consulting
with the Corporation.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Corporation and to each transfer
agent of the Common Shares and the Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. The
Corporation may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Shares and the
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 Corporation shall
appoint a successor to the Rights Agent. If the Corporation shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Corporation), then the incumbent Rights Agent or 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 Corporation or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
any state therein, in good standing, having a principal office in a state in the
United States, 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
53
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100 million or (b) an Affiliate of a corporation described
in clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares and the Preferred Shares, and as soon as practicable
thereafter mail a notice thereof in writing to the registered holders of the
Right Certificates (which notice may be included in any regularly scheduled
mailing to shareholders whether such mailing is by fist-class mail or
otherwise). 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 the Rights to the contrary, the Corporation
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and/or the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
54
Section 23. REDEMPTION AND TERMINATION. (a) The Board of Directors of the
Corporation may, at its option, at any time prior to the Shares Acquisition
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter referred to as
the "Redemption Price").
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Corporation shall give notice of such
redemption to the Rights Agent and to the holders of the then outstanding Rights
by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. The failure to give notice or
any defect in notice shall not affect the validity of the redemption. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Corporation nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
and other than in connection with the repurchase of Common Shares prior to the
Distribution Date.
55
Section 24. EXCHANGE. (a) The Board of Directors of the Corporation may,
at its option, at any time after any Person first becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have not become effective or that have become void
pursuant to the provisions of Section 7(e) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, approximately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such amount per Right being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time (1) after any Person (other than
an Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of Common Shares aggregating 50% or more of the
Common Shares then outstanding. From and after the occurrence of a Section 13
Event, any Rights that theretofore have not been exchanged pursuant to this
Section 24(a) shall thereafter be exercisable only in accordance with Section 13
and may not be exchanged pursuant to this Section 24(a). The exchange of the
Rights by the Board of Directors may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Corporation 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 Corporation 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
56
validity of such exchange. The Corporation shall promptly mail a notice of any
such exchange to all of the holders of the Rights so exchanged at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Shares for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) The Corporation may at its option and in the event that there shall
not be sufficient Common Shares issued but not outstanding or authorized but
unissued to permit an exchange of Rights as contemplated in accordance with this
Section 24, the Corporation shall substitute to the extent of such
insufficiency, for each Common Share that would otherwise be issuable upon
exchange of a Right, a number of Preferred Shares or fraction thereof (or
equivalent preferred shares as such term is defined in Section 11(b)) such that
the current per share market price (determined pursuant to Section 11(d) hereof)
of one Preferred Share (or equivalent preferred share) multiplied by such number
or fraction is equal to the current per share market price of one Common Share
(determined pursuant to Section 11(d) hereof) as of the date of such exchange.
Section 25. NOTICE OF CERTAIN EVENTS. In case the Corporation shall
propose, at any time after the Distribution Date, (a) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of Preferred Shares (other than a regular
periodic cash dividend out of earnings or retained earnings of the
57
Corporation) or (b) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options, or (c)
to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to, any other Person, or (e) to effect the liquidation,
dissolution or winding up of the Corporation, then, in each such case, the
Corporation shall give to each holder of a Right Certificate, to the extent
feasible and in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the 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
(a) or (b) above at least 20 days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, and in the case of
any such other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Preferred Shares, whichever shall be the earlier.
In case any Section 11(a)(ii) Event shall occur, then, in any such case,
(i) the Corporation shall as soon as practicable thereafter give to each holder
of a Right Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of the occurrence of such event,
58
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Shares shall be deemed thereafter to refer to Common
Shares and/or, if appropriate, other securities.
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 Corporation 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:
Cincinnati Xxxx Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation 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 Corporation) as follows:
The Fifth Third Bank
Corporate Trust Operations
Mail Drop 1090F5
00 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
Subject to the provisions of Sections 19 and 21, notices or demands authorized
by this Agreement to be given or made by the Corporation 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 Corporation.
Section 27. SUPPLEMENTS AND AMENDMENTS. Except as otherwise provided in
this Section 27, for so long as the Rights are then redeemable, the Corporation
may in its sole and
59
absolute discretion, and the Rights Agent shall if the Corporation so directs,
supplement or amend any provision of this Agreement in any respect without the
approval of any holders of the Rights. At any time when the Rights are no
longer redeemable, except as otherwise provided in this Section 27, the
Corporation may, and the Rights Agent shall, if the Corporation so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order to (i) cure any ambiguity, (ii) correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, (iii) shorten or lengthen any time period hereunder, or (iv)
change or supplement the provisions hereunder in any manner which the
Corporation may deem necessary or desirable; provided that no such supplement or
amendment shall adversely affect the interests of the holders of Rights as such
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person), and no such amendment may cause the Rights again to become redeemable
or cause the Agreement again to become amendable other than in accordance with
this sentence. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which decreases the
Redemption Price. Upon the delivery of a certificate from an appropriate
officer of the Corporation which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment.
Section 28. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Corporation or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. (a)
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any
60
particular time, including for purposes of determining the particular percentage
of such outstanding Common Shares of which any Person is the Beneficial Owner,
shall be made in accordance with the provisions of Rule 13d-3(d)(1)(i) of the
General Rules. The Board of Directors of the Corporation shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the Corporation, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement. All such actions,
calculations, interpretations and determinations (including, for purpose of
clause (ii) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (i) be final, conclusive and binding
on the Corporation, the Rights Agent, the holders of the Right Certificates and
all other parties and (ii) not subject the Board to any liability to the holders
of the Right Certificates.
(b) For purposes of this Agreement, any determination to be made by the
Board of Directors of the Corporation may be by a duly constituted committee
thereof if so authorized to act by the Board of Directors pursuant to the
Corporation's Regulations, and in such circumstances any reference to the Board
of Directors herein shall be deemed to include a reference to such committee.
Section 30. BENEFIT OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Corporation, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common
61
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 Corporation,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, registered holders of the Common Shares).
Section 31. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 32. GOVERNING LAW. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Ohio and for all purposes shall be governed by and
construed in accordance with the laws of Ohio applicable to contracts made and
to be performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
62
IN WITNESS HEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: CINCINNATI XXXX INC.
By /s/ Xxxxxxx X. Xxxxxx /s/ Xxxx X. XxXxxxxxx
------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxx Xxxx X. XxXxxxxxx
Secretary President and Chief Executive Officer
Attest: THE FIFTH THIRD BANK
By /s/ Xxxxx X. Xxxxxx /s/ Xxxx X. Xxxxxx
------------------------- ----------------------------------------
Xxxx X. Xxxxxx
Name Xxxxx X. Xxxxxx Vice President and Trust Officer
-------------------------
Title Trust Officer
-------------------------
63
Exhibit A Form of Certificate of Amendment to Amended Articles of
Incorporation of Cincinnati Xxxx Inc.
A-i
EXHIBIT A
CERTIFICATE OF AMENDMENT
BY THE
BOARD OF DIRECTORS
OF
CINCINNATI XXXX INC.
The undersigned, Xxxxx X. Xxxxx, Executive Vice President and Chief
Financial Officer, and Xxxxxxx X. Xxxxxx III, Secretary, of Cincinnati Xxxx
Inc., an Ohio corporation (the "Corporation"), DO HEREBY CERTIFY that for and on
behalf of the Corporation as follows:
The following resolution to amend the Corporation's Amended Articles of
Incorporation was adopted by the Board of Directors of the Corporation, pursuant
to Section 1701.70(B)(1) of the Ohio Revised Code, at a meeting of such Board of
Directors duly called and held on March 3, 1997, at which meeting a quorum was
present. Of the 4,000,000 authorized Voting Preferred Shares of the
Corporation, without par value (the "Voting Preferred Shares"), of which all are
unissued, the following resolution was adopted to increase the number of
authorized shares of a series of such Voting Preferred Shares (the "Series A
Preferred Shares") from 250,000 to 2,000,000 and to read as follows:
RESOLVED FURTHER, that the first paragraph of Article
Fourth, Section 9, of the Corporation's Amended Articles of
Incorporation be amended and restated to increase the number
of authorized shares of the series from 250,000 to 2,000,000
and to read as follows:
Of the 4,000,000 Voting Preferred Shares of the corporation,
2,000,000 shall constitute a series of Voting Preferred
Shares designated as Series A Preferred Shares (the "Series
A Preferred Shares") and have, subject and in addition to
the other provisions of this Article Fourth, the following
relative rights, preferences and limitations:
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 23rd day of
April, 1997.
---------------------------------------------
Xxxxx X. Xxxxx, Executive Vice President and
Chief Financial Officer
---------------------------------------------
Xxxxxxx X. Xxxxxx III, Secretary
Exhibit B Form of Rights Certificate
B-i
EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R-_________________ ___________ Rights
NOT EXERCISABLE AFTER MAY 2, 2007 OR EARLIER IF REDEEMED BY THE COMPANY (AS
DEFINED HEREINAFTER). THE RIGHTS ARE SUBJECT TO REDEMPTION. AT THE OPTION OF
THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.](1)
Rights Certificate
CINCINNATI XXXX INC.
This certifies that __________________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Shareholder Rights Plan, the terms of which are set forth in the
Rights Agreement dated as of April 29, 1997 (the "Rights Agreement"), between
Cincinnati Xxxx Inc., an Ohio corporation (the "Company"), and The Fifth
Third Bank (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M. (Cincinnati, Ohio time) on May 2, 2007 at the office
or offices of the Rights Agent designated for such purpose, or its successors
as Rights Agent, one one-hundredth of a fully paid, nonassessable Series A
Preferred Share (the "Preferred Shares") of the Company, at a purchase price
of $125 per one one-hundredth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The Purchase
Price may be paid in cash or by certified bank check or money order payable
to the order of the Company. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above,
are the
----------
(1) The portion of the legend in brackets shall be inserted only if
applicable, shall be modified to apply to an Acquiring Person, as applicable,
and shall replace the preceding sentence.
number and Purchase Price as of May 2, 1997, based on the Preferred Shares as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights Certificate
are beneficially owned by (i) an Acquiring Person, or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of any such Person, such
Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of Preferred Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions, and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in
the Rights Agreement. Copies of the Rights Agreement are available upon
written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Shares as the Rights evidenced
by the Rights Certificate or Rights Certificates surrendered shall have
entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to the Shares Acquisition Date.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or,
to receive notice of meetings or other actions affecting shareholders except
as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS, the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of __________________, _________.
ATTEST: CINCINNATI XXXX INC.
_________________________________ By: _________________________________
Secretary
Title: ______________________________
Countersigned:
THE FIFTH THIRD BANK, Rights Agent
By: _____________________________
Authorized Signature
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Rights Certificate.)
FOR VALUE RECEIVED ____________________________________________ hereby sells,
assigns and transfers unto ___________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ____________________, _____________
_______________________________________
Signature
Signature Guaranteed: _______________________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of such Person.
Dated: __________________, _________ ___________________________________
Signature
Signature Guaranteed: _______________________________________
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by Rights Certificate.)
To: CINCINNATI XXXX INC.
The undersigned hereby irrevocably elects to exercise ___________________
Rights represented by this Rights Certificate to purchase the Preferred
Shares issuable upon the exercise of the Rights (or such other securities or
property of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
Please insert social security or other identifying number: ___________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number: ___________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated: ______________________, ____________
_______________________________
Signature
Signature Guaranteed: _______________________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring
Person, or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or became an Acquiring Person, or an Affiliate or
Associate of any such Person.
Dated: ______________________, ____________
_______________________________
Signature
Signature Guaranteed: _______________________________
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Exhibit C Summary of Rights to Purchase Preferred Shares
C-i
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On March 3, 1997, the Board of Directors of Cincinnati Xxxx Inc. (the
"Company") declared a dividend distribution of one right ("Right") on each of
the Company's outstanding Common Shares, par value $1.00 per share (the "Common
Shares"), to holders of record of the Common Shares at the close of business on
May 2, 1997 (the "Record Date"). One Right also will be distributed for each
Common Share issued after May 2, 1997, until the Distribution Date (which is
described in the next paragraph). Each Right entitles the registered holder to
purchase from the Company a unit ("Unit") consisting of one one-hundredth of a
Series A Preferred Share of the Company (the "Preferred Shares") at a purchase
price of $125 per Unit, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement dated as
of April 29, 1997 (the "Rights Agreement") between the Company and The Fifth
Third Bank, as Rights Agent.
Initially, the Rights will be attached to all Common Share certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Shares and a
Distribution Date will occur upon the earliest of (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding Common Shares or (ii) 10
business days following the commencement of a tender offer or exchange offer
that would if consummated result in a person or group beneficially owning 15% or
more of the outstanding Common Shares.
Until the Distribution Date (i) the Rights will be evidenced by the Common
Share certificates and will be transferred with and only with such Common Share
certificates, (ii) new Common Share certificates issued after May 2, 1997 will
contain a notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Shares outstanding will
also constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on May 2, 2007, unless earlier redeemed by the Company
as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except for certain issuances in
connection with outstanding options and convertible securities and as otherwise
determined by the Board of Directors, only Common Shares issued prior to the
Distribution Date will be issued with Rights.
If a person becomes the beneficial owner of 15% or more of the Common
Shares ("Flip-In Event"), each holder of a Right will have the right to receive,
upon exercise, Common Shares having a value equal to two times the exercise
price (Purchase Price) of the Right. Moreover, the Rights will not be
exercisable until the Rights are no longer redeemable as
described below. If the Company does not have enough authorized Common Shares
to satisfy the exercise of the Rights, the Company will be required to
substitute value in the form of cash, property, debt or equity securities, or a
reduction of the Purchase Price, or any combination of the foregoing, in an
aggregate amount equal to the value of the Common Shares which would otherwise
be issuable. In addition, the Company may provide that, in lieu of payment of
any exercise price by holders of the Rights, the Company will issue to such
holders securities equal to the value of the spread between the exercise price
and the value of the Common Shares. The Acquiring Person would not be permitted
to exercise any Rights and any Rights held by such person (or certain
transferees of such person) will be null and void and non-transferable.
For example, at an exercise price of $125 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following a Flip-In Event
would entitle its holder to purchase $250 worth of Common Shares (or other
consideration, as noted above) for $125. Assuming that the Common Shares had a
per share value of $25 at such time, the holder of each valid Right would be
entitled to purchase ten Common Shares for $125. Alternatively, at the
discretion of the Board of Directors, each Right following a Flip-In Event,
without payment of the exercise price, would entitled its holder to Common
Shares (or other consideration, as noted above) with a value of $125.
If, following the Distribution Date, the Company is acquired in certain
specified mergers or other business combinations (I.E., the Company does not
survive or its Common Shares are changed or exchanged), or 50% or more of its
assets or earning power (on a consolidated basis) is sold or transferred in one
transaction or a series of related transactions ("Flip-Over Events"), each Right
becomes a Right to acquire common stock of the other party to the transaction
(or its ultimate parent in certain circumstances) having a value equal to two
times the Purchase Price. As an enforcement mechanism, the Rights Agreement
prohibits the Company from entering into any such transaction unless the other
party agrees to comply with the provisions of the Rights.
The Purchase Price payable and the number of Units of Preferred Shares or
other securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) if holders of the Preferred Shares are granted certain rights or
warrants to subscribe for Preferred Shares or convertible securities at less
than the 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 quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Preferred Shares on the
last trading date prior to the date of exercise.
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In general, the Company may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right, at any time prior to a Flip-In Event. Immediately
upon the action of the Board of Directors ordering redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the $0.01 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for shares (or other consideration) of the Company or for common
stock of the acquiring company as set forth above.
As long as the Rights are redeemable, the Company may amend any provision
of the Rights Agreement in any respect without the approval of the holders of
the Rights. At any time when the Rights are no longer redeemable, the Company
may amend the Rights Agreement without the approval of the holders of the Rights
in order to cure any ambiguity, correct or supplement any provision which may be
defective or inconsistent with any other provision, shorten or lengthen any time
period, or change or supplement the provisions in any manner in which the
Company may deem necessary or desirable; provided that no such supplement or
amendment shall adversely affect the interests of the holders of the Rights, and
no such amendment may cause the Rights again to become redeemable or cause the
Rights Agreement again to become amendable other than in accordance with the
terms of the original Rights Agreement.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
April __, 1997. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
- 3 -
