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Exhibit 1
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TUSCARORA INCORPORATED
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AUGUST 17, 1998
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TABLE OF CONTENTS
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Section 1. Certain Definitions.......................................................................... 1
Section 2. Appointment of Rights Agent.................................................................. 4
Section 3. Issue of Right Certificates.................................................................. 4
Section 4. Form of Right Certificates................................................................... 6
Section 5. Countersignature and Registration of Right Certificates...................................... 6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.......................................................... 7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights................................ 7
Section 8. Cancellation and Destruction of Right Certificates........................................... 8
Section 9. Reservation and Availability of Preferred Shares; Securities Registration.................... 9
Section 10. Preferred Shares Issue Date.................................................................. 10
Section 11. Adjustment of Purchase Price, Number of Preferred Shares or Number of Rights................. 10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares................................... 16
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer of Assets or Earning Power......... 16
Section 14. Fractional Rights and Fractional Shares...................................................... 17
Section 15. Rights of Action............................................................................. 18
Section 16. Agreement of Right Holders................................................................... 18
Section 17. Right Holder Not Deemed a Shareholder........................................................ 19
Section 18. Concerning the Rights Agent.................................................................. 19
Section 19. Merger or Consolidation or Change of Name of Rights Agent.................................... 19
Section 20. Duties of Rights Agent....................................................................... 20
Section 21. Change of Rights Agent....................................................................... 21
Section 22. Issuance of New Right Certificates........................................................... 22
Section 23. Redemption................................................................................... 22
Section 24. Exchange .................................................................................... 23
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Section 25. Notice of Certain Events..................................................................... 24
Section 26. Notices .................................................................................... 24
Section 27. Supplements and Amendments................................................................... 25
Section 28. Successors................................................................................... 25
Section 29. Benefits of this Agreement................................................................... 25
Section 30. Severability................................................................................. 26
Section 31. Governing Law................................................................................ 26
Section 32. Counterparts................................................................................. 26
Section 33. Descriptive Headings......................................................................... 26
Signatures .................................................................................... 26
Exhibit A Form of Statement with Respect to Series A Junior Participating Preferred Stock................ A-1
Exhibit B Form of Right Certificate...................................................................... B-1
Exhibit C Summary of Rights to Purchase Preferred Shares................................................. C-1
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THIS AGREEMENT, dated August 17, 1998, between TUSCARORA
INCORPORATED, a Pennsylvania corporation (the "COMPANY"), and CHASEMELLON
SHAREHOLDER SERVICES, L.L.C. (the "RIGHTS AGENT").
WITNESSETH THAT:
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one preferred share purchase right (a "RIGHT") for
each Common Share (as hereinafter defined) of the Company outstanding on August
31, 1998 (the "RECORD DATE"), each Right representing the right to purchase one
one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and
subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and intending to be legally bound, the parties
hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person (as such
term is hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
20% or more of the Common Shares of the Company then outstanding, but
shall not include the Company or any Related Entity (as such term is
hereinafter defined). Notwithstanding the foregoing, no Person shall
become an "ACQUIRING PERSON" as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common Shares of the Company
then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the Common Shares of the Company
then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner
of any additional Common Shares of the Company, then such Person shall
be deemed to be an "ACQUIRING PERSON". Notwithstanding the foregoing,
if the Board of Directors of the Company determines in good faith that
a Person who would otherwise be an "ACQUIRING PERSON", as defined
pursuant to the foregoing provisions of this paragraph (a), has become
such inadvertently, and such Person divests as promptly as practicable
a sufficient number of Common Shares so that such Person would no
longer be an "ACQUIRING PERSON", as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed
to be an "ACQUIRING PERSON" for any purposes of this Agreement.
(b) "AFFILIATE" and "ASSOCIATE" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act (as such term is
hereinafter defined), as in effect on the date of this Agreement.
(c) 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, as defined in Rules 13d-3 and 13d-5 of the General
Rules and Regulations under the Exchange Act, as in effect on
the date of this Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has
(A) the right to acquire (whether such right is
exercisable immediately or only after the passage of
time, and regardless of any conditions to the
exercise of such right (whether or not such
conditions then are or could be satisfied)) pursuant
to any agreement, arrangement or understanding (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), 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 pursuant to any agreement,
arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, any security if the
agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and
(2) is not also then reportable on Schedule 13D under
the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then outstanding,"
when used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such securities
then issued and outstanding together with the number of such securities
not then actually issued and outstanding which such Person would be
deemed to own beneficially hereunder.
(d) "BUSINESS DAY" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in the
Commonwealth of Pennsylvania are authorized or obligated by law or
executive order to close.
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(e) "CLOSE OF BUSINESS" on any given date shall mean
5:00 P.M., local time in Pittsburgh, Pennsylvania, on such date;
provided, however, that if such date is not a Business Day it shall
mean 5:00 P.M., local time in Pittsburgh, Pennsylvania, on the next
succeeding Business Day.
(f) "COMMON SHARES" when used with reference to the
Company shall mean the shares of Common Stock, without par value, of
the Company. "COMMON SHARES" when used with reference to any Person
other than the Company shall mean the capital stock (or analogous
equity interest in the case of a Person which is not a corporation)
with the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, of the Person or Persons
which ultimately control such first-mentioned Person.
(g) "DISTRIBUTION DATE" shall have the meaning set
forth in Section 3 hereof.
(h) "EXCHANGE ACT" shall mean the Securities Exchange
Act of 1934, as amended.
(i) "EXCHANGE RATIO" shall have the meaning set forth
in Section 24(a) hereof.
(j) "FINAL EXPIRATION DATE" shall have the meaning
set forth in Section 7 hereof.
(k) "FLIP-OVER ENTITY" shall have the meaning set
forth in Section 13(b) hereof.
(l) "PERSON" shall mean any individual, firm,
partnership, association, group (as such term is used in Rule 13d-5
under the Exchange Act, as such Rule is in effect on the date of this
Agreement), corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(m) "PREFERRED SHARES" shall mean shares of Series A
Junior Participating Preferred Stock, par value $.01 per share, of the
Company having the rights and preferences set forth in the Form of
Statement With Respect to Series A Junior Participating Preferred Stock
attached to this Agreement as Exhibit A hereto.
(n) "PURCHASE PRICE" shall have the meaning set forth
in Section 4 hereof.
(o) "RECORD DATE" shall have the meaning set forth in
the introductory paragraph hereof.
(p) "REDEMPTION DATE" shall have the meaning set
forth in Section 7 hereof.
(q) "RELATED ENTITY" shall mean any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any entity holding Common Shares for or pursuant to
the terms of any such plan.
(r) "RIGHT" shall have the meaning set forth in the
introductory paragraph hereof.
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(s) "RIGHT CERTIFICATE" shall mean the Right
Certificates authorized to be issued as provided in Section 3 hereof,
but excluding Right Certificates which represent Rights that have
become void pursuant to Section 11(a)(ii) hereof.
(t) "SECURITIES ACT" shall mean the Securities Act of
1933, as amended.
(u) "SHARES ACQUISITION DATE" shall mean the first
date of public announcement (including, without limitation, a report
filed pursuant to Section 13(d) or 14(d) under the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become
such.
(v) "SUBSIDIARY" of any Person shall mean any person
of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) the tenth Business Day (or such later
date as may be determined by action of the Board of Directors prior to
such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than the Company or any Related
Entity) of, or of the first public announcement of the intention of any
Person (other than the Company or any Related Entity) to commence, a
tender or exchange offer the consummation of which would result in any
Person becoming the Beneficial Owner of Common Shares aggregating 20%
or more of the then outstanding Common Shares (including any such date
which is after the Record Date and prior to the issuance of the Rights;
the earlier of such dates being herein referred to as the "DISTRIBUTION
DATE"), (x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the Common Shares (certificated or otherwise)
registered in the names of the holders thereof (if such shares are
certificated, such certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right
to receive Right Certificates will be transferable only in connection
with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Shares
as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto (a "RIGHT CERTIFICATE"),
evidencing one Right for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) As soon as practicable following the Record Date,
the Company will send a copy of a Summary of Rights to Purchase
Preferred Shares, in substantially the form of Exhibit C hereto (the
"SUMMARY OF RIGHTS"), by first class, postage paid mail, to each record
holder of Common Shares as of the close of business on the Record Date,
at the address of such holder shown on the records of the Company.
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(c) With respect to certificated Common Shares
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names
of the holders of such Common Shares, the holders of such certificates
shall be deemed to be the holders of the associated Rights and the
registered holders of the Common Shares shall also be the registered
holders of the associated Rights. Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding
on the Record Date shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(d) Certificates for certificated shares of Common
Shares which become outstanding (including, without limitation, because
of resale or transfer by the Company of treasury shares) after the
Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
Tuscarora Incorporated (the "COMPANY") and ChaseMellon
Shareholder Services, L.L.C., dated August 17, 1998 (as
amended from time to time, the "RIGHTS AGREEMENT"), the terms
of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices of
the Company. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge
after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Under certain
circumstances as set forth in the Rights Agreement, the Rights
may be redeemed or exchanged for other securities of the
Company at the option of the Company. As described in the
Rights Agreement, Rights which are beneficially owned by any
Person who becomes an Acquiring Person or an Associate or an
Affiliate thereof (each as defined in the Rights Agreement)
will become null and void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common
Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby. In the event that the
Company purchases or acquires any Common Shares after the Record Date
but prior to the Distribution Date (other than Common Shares held in a
fiduciary capacity or pursuant to any employee benefit plan of the
Company or any Subsidiary of the Company), any Rights associated with
such Common Shares shall be deemed canceled and retired so that the
Company shall not be entitled to exercise any Rights associated with
such Common Shares.
(e) With respect to Common Shares which become
uncertificated (including, without limitation, because of a resale or
transfer by the Company of treasury shares) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date, any confirmation or advice by the Company in
connection with the issuance or transfer thereof shall contain a notice
of the existence of the Rights associated with such Common Shares. The
form of such notice shall be as the Company may elect from time to
time. Without limiting the generality of the foregoing, such notice may
take the form of (i) a general statement to the effect that the Rights
are attached to such Common Shares and that a
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shareholder may obtain a full copy of the text of such rights free of
charge from the Company or (ii) a statement similar to the following:
Until the Distribution Date (as defined in the Rights
Agreement referred to below), holders of shares of Common
Stock, without par value, of Tuscarora Incorporated (the
"COMPANY") are entitled to certain Rights as set forth in a
Rights Agreement between the Company and ChaseMellon
Shareholder Services, L.L.C., dated August 17, 1998 (as
amended from time to time, the "RIGHTS AGREEMENT"), the terms
of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices of
the Company. The Company will mail to any holder of the Common
Stock a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain
circumstances as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates. Under
certain circumstances as set forth in the Rights Agreement,
the Rights may be redeemed or exchanged for other securities
of the Company at the option of the Company. As described in
the Rights Agreement, Rights which are beneficially owned by
any Person who becomes an Acquiring Person or an Associate or
an Affiliate thereof (each as defined in the Rights Agreement)
will become null and void.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the forms of assignment and of election to purchase to be printed on the
reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate 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 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-hundredth of a
Preferred Share set forth therein (as such price may be adjusted from time to
time pursuant to the terms hereof, the "PURCHASE PRICE"), but the number of such
one one-hundredths of a Preferred Share and the Purchase Price shall be subject
to modification and adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION OF RIGHT
CERTIFICATES.
(a) The Right Certificates shall be executed on
behalf of the Company by its Chief Executive Officer, President, any
Vice President or Treasurer, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a facsimile thereof
and shall be attested by the Secretary or Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile signature, and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
Person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on
behalf of the Company by
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any Person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this
Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on its face
by each of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 14 hereof,
at any time after the close of business on the Distribution Date, and
at or prior to the close of business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate or Right
Certificates (other than Right Certificates representing Rights that
have become void pursuant to Section 11(a)(ii) hereof or that have been
exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number
of one one-hundredths of a Preferred Share as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the principal office of the Rights Agent.
Neither the Rights Agent nor the Company shall be obligated to take any
action with respect to transfer of any such surrendered Right
Certificate until the registered holder thereof shall have completed
and signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owners) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon, subject to Section 20(j) hereof,
the Rights Agent shall countersign and deliver to the Person entitled
thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory
to them, and, at the Company's request, reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) The registered holder of any Right Certificate
may exercise the Rights evidenced thereby (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
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on the reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of the
Purchase Price for each one one-hundredth of a Preferred Share as to
which the Rights are exercised, at or prior to the earliest of (i) the
close of business on August 31, 2008 (the "FINAL EXPIRATION DATE"),
(ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the "REDEMPTION DATE") or (iii) the time at which the Rights
are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of
a Preferred Share purchasable pursuant to the exercise of a Right shall
initially be $65, shall be subject to adjustment from time to time as
provided in Section 11 or 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares
to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof by certified check, cashier's check or
money order payable to the order of the Company, the Rights Agent
shall, subject to Section 20(j) hereof, thereupon promptly (i) (A)
requisition from the transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with
all such requests or (B) 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 Company hereby
directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby,
a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to issue any Preferred Shares or undertake any other action upon any
exercise or purported exercise of a Right unless the registered holder
of such Right shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof
as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent
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shall so cancel and retire, any other Right Certificate purchased or acquired by
the Company (other than in a fiduciary capacity or pursuant to any employee
benefit plan of the Company or any Subsidiary of the Company) otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES;
SECURITIES REGISTRATION.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued Preferred Shares or any Preferred Shares held in its treasury,
the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7
hereof. Notwithstanding the foregoing or anything else contained
herein, prior to the Board of Directors of the Company determining that
any Person has become an Acquiring Person, the Company shall not be
obligated to cause to be reserved and kept available any Common Shares
to permit the exercise of any outstanding Rights pursuant to Section
11(a)(ii) hereof, or any exchange pursuant to Section 24 hereof, or to
cause to be reserved and kept available any Preferred Shares (other
than those referred to in the preceding sentence). The Company
covenants and agrees that it will not, after any determination by its
Board of Directors that any Person has become an Acquiring Person, take
any action that would reduce the number of its authorized and unissued
Common Shares and Preferred Shares and Common Shares and Preferred
Shares held in its treasury (exclusive of shares previously reserved
for other purposes) below the number sufficient to permit the exercise
in full of all outstanding Rights, and if at any such time the number
of such authorized and unissued and treasury shares not otherwise
reserved is less than the number sufficient to permit the exercise in
full of all outstanding Rights, the Company shall not take any action
that would increase such shortfall.
(b) The Company shall use all reasonable efforts to
cause, from and after such time as the Rights become exercisable, all
Preferred Shares to be listed, upon official notice of issuance, upon a
national securities exchange, or to be eligible for quotation in the
National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or any successor thereto or other comparable
quotation system.
(c) To the extent necessary to permit the Rights to
be exercised in accordance with the terms of this Agreement without
conflict with applicable law, the Company shall use its best efforts to
(i) file as soon as is practicable following the Distribution Date a
registration statement on the appropriate form under the Securities Act
with respect to the securities purchasable upon the exercise of the
rights, (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 Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such
securities and (B) the date of the expiration of the Rights. To the
extent necessary to permit the Rights to be exercised in accordance
with the terms of this Agreement without conflict with applicable law,
the Company shall also use its best efforts as soon as practicable
following the Distribution Date to take such action as may be
appropriate under the securities laws of the various states. The
Company may temporarily suspend the exercisability of the Rights in
some or all jurisdictions to the extent necessary to avoid such
conflict pending effectiveness of such registration statement and such
action under the state securities laws. Upon any such suspension, the
Company shall make a public announcement stating that the
exercisability of the Rights has
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been temporarily suspended. 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.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all Preferred
Shares delivered upon exercise of Rights shall, at the time of delivery
of such Preferred Shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued, fully paid and nonassessable
shares.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Preferred Shares upon the
exercise of Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance
or delivery of certificates or shares or depositary receipts for the
Preferred Shares in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for exercise or to
issue or to deliver any certificates or depositary receipts for
Preferred Shares upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such
Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax
is due.
SECTION 10. PREFERRED SHARES ISSUE DATE. Each Person in whose
name any Preferred Shares are issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of such Preferred Shares
on, and, if such shares are certificated, 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 transfer books for the Preferred Shares of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books for the Preferred Shares of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of Preferred
Shares for which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF PREFERRED
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number of Preferred Shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred
Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination
or reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which,
if such Right had been
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exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he or she
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 Company issuable upon exercise of
one Right, or if Common Shares of the Company shall be issuable $1.00
per share.
(ii) Subject to the following paragraph and Section
24 of this Agreement, in the event any Person becomes an Acquiring
Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of Preferred Shares, such
number of Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right is
then exercisable and dividing that product by (y) 50% of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the
occurrence of such event. In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.
From and after the occurrence of such event, any
Rights that are or were acquired or beneficially owned by any Acquiring
Person (or any Associate or Affiliate of such Acquiring Person) shall
be void and any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents
Rights beneficially owned by an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any Associate or Affiliate
thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void pursuant to
the preceding sentence shall be canceled.
(iii) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall take all such action as
may be necessary to authorize additional Common Shares for issuance
upon exercise of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute,
for each Common Share that would otherwise be issuable upon exercise of
a Right, a number of Preferred Shares or fraction thereof such that the
current per share market price of one Preferred Share multiplied by
such number or fraction is equal to the current per share market price
of one Common Share as of the date of issuance of such Preferred Shares
or fraction thereof.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Preferred
Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences as the
Preferred Shares ("EQUIVALENT PREFERRED SHARES")) or securities
convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than the then
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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 Company issuable upon exercise of one Right, or if Common Shares of
the Company shall be issuable $1.00 per share. In case such
subscription or purchase price may be paid in a consideration part or
all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Preferred Shares owned by or
held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event
that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for
the making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets (other
than a regular periodic cash dividend, a cash dividend on account of
accumulated and unpaid regular periodic dividends or a dividend payable
in Preferred Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share
market price of the Preferred Shares on such record date, less the fair
market value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the evidences of
indebtedness or assets so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of
the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right, or if Common Shares of the
Company shall be issuable $1.00 per share. Such adjustments shall be
made successively whenever such a record date is fixed; and in the
event that such a distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
the "CURRENT PER SHARE MARKET PRICE" of any security (a "SECURITY" for
the purpose of this Section 11(d)(i)) on any date shall be deemed to be
the average of the daily closing prices per share of such Security for
the 30 consecutive 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 Security is determined
during a period following the announcement by the issuer of such
Security of (A) a
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dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior
to the expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security.
The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use, or, if on any such date the Security
is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of the
Company. The term "TRADING DAY" shall mean a day on which the principal
national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "CURRENT PER SHARE MARKET PRICE" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the "CURRENT PER SHARE
MARKET PRICE" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If neither
the Common Shares nor the Preferred Shares are publicly held or so
traded, "CURRENT PER SHARE MARKET PRICE" shall mean the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; provided, 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 and
Section 13 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other
share or security as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section
11 and Section 13 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 date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares, thereafter
the number of such other shares so receivable upon exercise of any
Right (as well as any consideration to be paid therefor) shall be
subject to adjustment from time to time in a manner and on terms as
nearly
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equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Sections 11(a) through (c), inclusive,
and the provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a Preferred Share purchasable from time
to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), 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 one-millionth of a
Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths of
a Preferred Share purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall
be exercisable for the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders
of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price
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and the number of one one-hundredths of a Preferred Share which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of the
then par value, if any, of the Preferred Shares issuable upon exercise
of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon
such exercise over and above the Preferred Shares and other capital
stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that 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 Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance
of rights, options or warrants referred to hereinabove in Section
11(b), hereafter made by the Company to holders of its Preferred Shares
shall not be taxable to such shareholders.
(n) In the event that at any time after the date of
this Agreement and prior to the Distribution Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (A) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of one
one-hundredths of a Preferred Share so purchasable immediately prior to
such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding
immediately after such event, and (B) each Common Share outstanding
immediately after such event shall have issued with respect to it that
number of Rights which each Common Share outstanding immediately prior
to such event had issued with respect to it. The adjustments provided
for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(o) The Company covenants and agrees that, after the
Distribution Date, it shall not take or suffer any Subsidiary to take
any action which will, or is intended to, or which is reasonably
foreseeable to, diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights, except as permitted by
Section 23 or Section 27 hereof (it being
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understood that the issuance of additional Rights shall not be deemed
to violate this Section 11(o)).
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) if Right
Certificates have been issued, mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 26 hereof.
SECTION 13. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER.
(a) In the event, directly or indirectly, at any time
after a Person has become an Acquiring Person, (i) the Company shall
consolidate with, or merge with and into, or be a party to any binding
share exchange with, any other Person, (ii) any Person shall
consolidate with the Company, or merge with and into the Company and
the Company shall be the continuing or surviving corporation of such
merger and, in connection with such merger, all or part of the Common
Shares shall be changed into or exchanged for stock or other securities
of any other Person (or the Company) or cash or any other property, or
(iii) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person other than the Company or one or more of its
wholly-owned Subsidiaries, then, and in each such case, proper
provision shall be made so that (w) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive,
upon the exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of
validly authorized and issued, fully paid, nonassessable and freely
tradable Common Shares (not subject to any rights of redemption,
repurchase or first refusal) of the Flip-Over Entity as shall equal the
result obtained by (A) multiplying the then current Purchase Price by
the number of one one-hundredths of a Preferred Share for which a Right
is then exercisable and dividing that result by (B) 50% of the then
current per share market price of the Common Shares of the Flip-Over
Entity (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, share exchange, sale or
transfer; (x) the Flip-Over Entity shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, share exchange,
sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (y) the term "COMPANY" shall thereafter be
deemed to refer to such Flip-Over Entity; and (z) such Flip-Over Entity
shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common
Shares thereafter deliverable upon the exercise of the Rights. The
provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
(b) "FLIP-OVER ENTITY" shall mean: (i) in the case of
any consolidation, merger or share exchange referred to in clause (i)
or (ii) of Section 13(a) hereof, the resulting, surviving or acquiring
Person, as the case may be (which may be the Company) and (ii) in the
case of any sale or transfer referred to in clause (iii) of Section
13(a) hereof, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions.
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(c) The Company shall not consummate any
consolidation, merger, share exchange, sale or transfer referred to in
Section 13(a) hereof unless (i) the Flip-Over Entity shall have
immediately after such transaction a sufficient number of authorized
Common Shares, which have not been issued or reserved for issuance, to
permit the exercise in full of the Rights in accordance with this
Section 13 (and the Flip-Over Entity shall reserve such number of
shares for such purpose), (ii) the Company and the Flip-Over Entity
shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in subsections (a) and (b)
of this Section 13, and further providing that, as soon as practicable
after the date of any such consolidation, merger, share exchange, sale
or transfer, the Flip-Over Entity shall prepare and file a registration
statement on an appropriate form under the Securities Act, and take
such action as shall be necessary under applicable state securities
laws, with respect to the Rights and the securities purchasable upon
exercise of the Rights, and will use its best efforts to cause such
registration statement and other action to become effective as soon as
practicable after such filing and remain effective (with a prospectus
at all times meeting the requirements of law) so long as any Rights may
be exercised hereunder. The Company shall not enter into any
transaction referred to in Section 13(a) hereof if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which evidence
fractional Rights. If the Company elects not to issue fractional
Rights, then in lieu of such fractional Rights, there shall be paid to
the registered holders of the Rights with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Right. For
the purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if
on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue
fractions of 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 Preferred
-17-
21
Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and
a depositary selected by it; provided, that such agreement shall
provide that the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are
not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one Preferred
Share. For the purposes of this Section 14(b), the current market value
of a Preferred Share shall be the closing price of a 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) The holder of a Right by the acceptance of the
Right expressly waives his or her right to receive any fractional
Rights or any fractional shares upon exercise of a Right (except as
provided above).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right 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 the Common Shares), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Right
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 Company and the Rights Agent may deem and
treat the Person in whose name the Right Certificate is (or, prior to
the Distribution Date, the associated Common Shares are) 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 or any
confirmation or advice with respect to uncertificated Common Shares
made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary; and
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22
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or any 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 any such obligation.
SECTION 17. RIGHT HOLDER NOT DEEMED A SHAREHOLDER. No holder,
as such, of any Right 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 Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right, 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 Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until such Right shall have been exercised or exchanged in accordance
with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any
claim of liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its
administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common
Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section
20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger
or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding
to the stock transfer or corporate trust powers of the Rights
Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of
the parties hereto; provided, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such
-19-
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successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by
a certificate signed by any one of the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall
be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due authorization execution
and delivery hereof by the Rights Agent) or in respect of the validity
or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in
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24
the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt of the certificate
contemplated by Section 12 hereof describing such change or
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, as the case may be) to be
issued pursuant to this Agreement or any Right Certificate or as to
whether any Preferred Shares (or Common Shares, as the case may be)
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its
duties hereunder from any one of the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered by it in good faith in accordance with instructions
of any such officer or for any delay in acting while waiting for those
instructions.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
(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, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer
without direction from the Company.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and Preferred Shares by registered or
certified mail, and, in the case of a resignation after the Distribution Date,
to the holders of the Right Certificates in accordance with Section 26 hereof.
The Company may remove the Rights Agent or any successor Rights Agent upon 30
days' notice in writing, mailed to the Rights Agent or successor Rights Agent,
as the case may be, and to each transfer agent of the Common Shares and
Preferred Shares by registered or certified mail, and, in the case of a removal
after the Distribution Date, to the holders of
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the Right Certificates in accordance with Section 26 hereof. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (which holder shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or of the State of New York or
Commonwealth of Pennsylvania (or of any other state of the United States so long
as such corporation is authorized to do business as a banking institution in the
State of New York or Commonwealth of Pennsylvania), in good standing, having an
office in the State of New York or Commonwealth of Pennsylvania, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $25 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares and Preferred Shares, and, in the case of an appointment after
the Distribution Date, mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price 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.
SECTION 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "REDEMPTION PRICE"). The redemption of
the Rights by the Board of Directors 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 action of the Board of
Directors of the Company ordering the redemption of the Rights pursuant
to paragraph (a) of this Section 23, and without any further action and
without any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to receive
the Redemption Price. The Company shall promptly give public notice of
any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such
redemption.
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Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice of redemption
to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner
other than that specifically set forth in this Section 23 or in Section
24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "EXCHANGE RATIO"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange
at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights in
accordance with Section 26 hereof. 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) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary
to authorize additional Common Shares for issuance upon exchange of the
Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such
additional Common Shares, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exchange of a Right, a
number of Preferred Shares or fraction thereof such that the current
per share market price of one Preferred Share multiplied
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by such number or fraction is equal to the current per share market
price of one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which evidence
fractional Common Shares upon any exchange of Rights as contemplated in
accordance with this Section 24 or upon any exercise of Rights as
contemplated in accordance with Section 11(a)(ii) hereof. In lieu of
such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share.
For the purposes of this paragraph (d), the current market value of a
whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24 or the date of exercise pursuant to Section
11(a)(ii) hereof.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred
Shares or to make any other distribution to the holders of its
Preferred Shares (other than a regular periodic cash dividend), (ii) 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, (iii)
to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person,
(v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common Shares
payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise
than by payment of dividends in Common Shares), then, in each such
case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or
(ii) above at least 10 days 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 10 days prior to the date of
the taking of such proposed action or the date of participation therein
by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
(b) In case the event set forth in Section 11(a)(ii)
hereof shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance
with Section 26 hereof, a notice of the occurrence of such event, which
notice shall describe such event and the consequences of such event to
holders of Rights under Section 11(a)(ii) hereof.
SECTION 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be
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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:
Tuscarora Incorporated
000 Xxxxx Xxxxxx
Xxx Xxxxxxxx, Xxxxxxxxxxxx 00000
Attn: Chief Executive Officer
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
Overpeck Centre
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Transfer Department
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right 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 Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice to the holder of a
Right which is mailed in the manner herein provided shall be deemed effective
when so mailed, whether or not the holder receives the notice; any notice to the
Company or to the Rights Agent shall be deemed effective if and when received.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. The Company may from
time to time supplement or amend this Agreement without the approval of any
holders of any Right in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights. Without limiting the
foregoing, the Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the thresholds set forth in
Sections 1(a) and 3(a) to not less than the greater of (i) the sum of .001% and
the largest percentage of the outstanding Common Shares then known by the
Company to be beneficially owned by any Person (other than the Company or any
Related Entity) and (ii) 10%. Upon the delivery of a certificate from an
appropriate officer of the Company which states that a 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 Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive
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benefit of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
SECTION 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 31. GOVERNING LAW. This Agreement and each Right
issued hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Pennsylvania and for all purposes shall be governed by and
construed in accordance with the laws of such Commonwealth applicable to
contracts to be made and performed entirely within such Commonwealth.
SECTION 32. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
[Corporate Seal] TUSCARORA INCORPORATED
Attest:
By /s/ Xxxxx X. Xxxxxxx By /s/ Xxxx X. X'Xxxxx, Xx.
------------------------------------- --------------------------------
Xxxxx X. Xxxxxxx, Assistant Secretary Xxxx X. X'Xxxxx, Xx., President
and Chief Executive Officer
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By /s/ Xxxxx X. Xxxxxxxx By /s/ X.X. Xxxxxx
------------------------------------- --------------------------------
Xxxxx X. Xxxxxxxx, Authorized Signer X.X. Xxxxxx, Authorized Signer
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Exhibit A
FORM OF
STATEMENT WITH RESPECT TO SHARES
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
TUSCARORA INCORPORATED
In compliance with the requirements of Section 1522(c) of the
Pennsylvania Business Corporation Law of 1988, as amended (the "BCL"), the
undersigned company, a corporation organized and existing under the BCL (the
"COMPANY") hereby certifies that:
1. The name of the Company is Tuscarora Incorporated.
2. The resolution duly adopted by the Board of Directors of
the Company establishing and designating the Series A Junior Participating
Preferred Stock, which is the first series of the Preferred Stock, par value
$.01 per share, of the Company, and fixing and determining the relative rights
and preferences thereof (the "RESOLUTION") is as follows:
RESOLVED, that this Board of Directors, pursuant to authority
expressly vested on it by the provisions of the Restated Articles of
Incorporation of Tuscarora Incorporated (hereinafter called the "COMPANY")
hereby authorizes the issue of the first series of Preferred Stock, par value
$.01 per share, of the Company and hereby fixes the designation and relative
rights and preferences thereof in addition to those set forth in said Restated
Articles of Incorporation, as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as "SERIES A JUNIOR PARTICIPATING PREFERRED STOCK" (the
"SERIES A PREFERRED STOCK") and the number of shares constituting the Series A
Preferred Stock shall be 200,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Company
convertible into Series A Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of the Common Stock,
without par value (the "COMMON STOCK"), of the Company, and of any other junior
stock, shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, semi-annual dividends
payable in cash on the 6th day of January and July in each year (or if the Board
of Directors commences declaration of quarterly cash dividends instead of
semi-annual dividends to the holders of Common Stock, commencing with the date
of the declaration of the first such quarterly cash dividend, quarterly
dividends payable in cash on such dates as such quarterly dividends would
normally be paid to the holders of the Common Stock) (each such date being
referred to herein as a "DIVIDEND PAYMENT DATE"), commencing on the first
Dividend Payment Date after the first issuance of a share or fraction of a share
of Series A Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares
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of Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Dividend Payment Date or, with respect to the first
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. In the event the Company shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Dividend Payment Date and the next subsequent
Dividend Payment Date, a dividend of $1 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive a dividend and before such Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series A Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the shareholders of the
Company. In the event the Company shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
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(B) Except as otherwise provided herein, in any other
Statement With Respect to Shares creating a series of Preferred Stock or any
similar stock, or in any By-Law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock and any other capital stock of
the Company having general voting rights shall vote together as one class on all
matters submitted to a vote of shareholders of the Company.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends or distributions payable on the Series
A Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Company ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
SECTION 5. RE-ACQUIRED SHARES. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly
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after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Restated Articles of
Incorporation or in any other Statement With Respect to Shares creating a series
of Preferred Stock or any similar stock or as otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
Common Stock or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Company shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under the
proviso in clause (1) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Company shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
SECTION 8. NO REDEMPTION. The shares of Series A Preferred
Stock shall not be redeemable.
SECTION 9. RANK. Except as otherwise set forth in the Restated
Articles of Incorporation or in the Statement With Respect to Shares creating
another series of Preferred Stock or any other class or series of stock, the
Series A Preferred Stock shall rank, with respect to the payment of dividends
and
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the distribution of assets, junior to all other series of the Company's
Preferred Stock and to any other class or series of stock other than the Common
Stock, whether now existing or hereafter created.
SECTION 10. AMENDMENT. The Restated Articles of Incorporation
of the Company shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without a majority vote of the outstanding
shares of Series A Preferred Stock, voting together as a single class.
3. (i) The aggregate number of shares of the Series A
Preferred Stock established and designated by the Resolution is 200,000, (ii)
the Company has not previously established and designated any other shares of
its stock pursuant to Section 1522 of the BCL or any corresponding provision of
prior law with respect thereto and (iii) the aggregate number of shares
established and designated by the Restated Articles of Incorporation of the
Company is 21,000,000, of which 1,000,000 shares are Preferred Stock, par value
$.01 per share, issuable in one or more series, and 20,000,000 shares are Common
Stock, without par value.
4. The Resolution was duly adopted at a meeting of the Board
of Directors of the Company duly called and held on August 17, 1998, at which
meeting a quorum was present and acted throughout.
5. The Resolution is to be effective upon the filing of this
Statement With Respect to Shares with the Secretary of State of the Commonwealth
of Pennsylvania.
IN WITNESS WHEREOF, this Statement With Respect to Shares is
executed on behalf of the Company by its President and Chief Executive Officer
and attested by its Assistant Secretary this 17th day of August, 1998.
[CORPORATE SEAL]
Attest: TUSCARORA INCORPORATED
By:
------------------------- -------------------------------------
Xxxxx X. Xxxxxxx, Xxxx X. X'Xxxxx, Xx.,
Assistant Secretary President and Chief Executive Officer
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Exhibit B
FORM OF
RIGHT CERTIFICATE
Certificate No. R-_________________ _____ Rights
NOT EXERCISABLE AFTER AUGUST 31, 2008 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS WHICH
ARE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (EACH AS DEFINED IN THE RIGHTS AGREEMENT) WILL BECOME
NULL AND VOID.
Right Certificate
TUSCARORA INCORPORATED
This certifies that _______________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated August 17, 1998 (the "RIGHTS
AGREEMENT"), between Tuscarora Incorporated, a Pennsylvania corporation (the
"COMPANY"), and ChaseMellon Shareholder Services, L.L.C. (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., local time in
Pittsburgh, Pennsylvania, on August 31, 2008 at the principal office of the
Rights Agent, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid and non-assessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "PREFERRED
SHARES"), of the Company, at a purchase price of $65 per one one-hundredth
of a Preferred Share (the "PURCHASE PRICE"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase duly executed. The
number of Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of August 17, 1998, based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events,
and in certain circumstances specified in the Rights Agreement, shares of Common
Stock, without par value, of the Company may be purchased in lieu of one
one-hundredths of a Preferred Share.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal offices of the
Company and the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall
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be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be required to be exchanged in whole or in
part for shares of the Common Stock, without par value, of the Company or
Preferred Shares.
No fractional shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made as provided in the Rights Agreement.
No holder of this Right Certificate, 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 Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal this _____ day of ___________________, ______.
[Corporate Seal]
ATTEST: TUSCARORA INCORPORATED
_______________________________ By: ______________________________
Name: Name:
Title: Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: _____________________________
Name:
Title:
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ______________________ hereby sells,
assigns and transfers unto
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________, ____ _____________________________
Signature
SIGNATURE GUARANTEED:
____________________________________
Signatures must be guaranteed by a
member firm of a registered national
securities exchange, a member of the National
Association of Securities Dealers, Inc., or a
commercial bank or trust company having an
office or correspondent in the United States.
================================================================================
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_____________________________
Signature
================================================================================
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Right Certificate.)
To: TUSCARORA INCORPORATED
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate to purchase
the Preferred Shares (or other securities) issuable or deliverable upon the
exercise of such Rights and requests that certificates for such Preferred Shares
(or other securities) be issued in the name of and delivered to:
_______________________________________________________________________
(Please print name and address)
_______________________________________________________________________
Social Security or Other Tax Payer Identification Number: _____________
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
_______________________________________________________________________
(Please print name and address)
_______________________________________________________________________
Social Security or Other Tax Payer Identification Number: _____________
Dated: ________________, _____ ______________________________
Signature
SIGNATURE GUARANTEED:
_______________________________
Signatures must be guaranteed by a
member firm of a registered national
securities exchange, a member of the National
Association of Securities Dealers, Inc., or a
commercial bank or trust company having an
office or correspondent in the United States.
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================================================================================
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_____________________________
Signature
================================================================================
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the Certificate set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
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Exhibit C
TUSCARORA INCORPORATED
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On August 17, 1998, the Board of Directors of Tuscarora
Incorporated (the "COMPANY") declared a dividend of one preferred share purchase
right (a "RIGHT") for each outstanding share of Common Stock, without par value,
of the Company. The Rights were issued to stockholders of record on August 31,
1998 and will expire on August 31, 2008.
Initially, the Rights will not be exercisable, certificates
will not be sent to you and the Rights will automatically trade with the Common
Stock. However, ten days after a person or group of affiliated or associated
persons acquires 20% or more of the Company's Common Stock, or ten business days
(or such later date as may be determined by the Board of Directors but prior to
a 20% acquisition) after a person or group announces an offer the consummation
of which would result in such person or group owning 20% or more of the Common
Stock (even if no purchases actually occur), the Rights will become exercisable
and separate certificates representing the Rights will be distributed. We expect
that the Rights would begin to trade independently from the Company's Common
Stock at that time. Until that time, the Rights will be represented by the
existing Common Stock, certificated or otherwise, and one Right will also be
issued with respect to each new share of Common Stock that shall become
outstanding. Shares of Common Stock issued after the record date in certificated
form will contain a notation incorporating the terms of the Rights by reference.
At no time will the Rights have any voting power.
When the Rights first become exercisable, unless a person or
group has acquired 20% or more of the Company's Common Stock, a holder will be
entitled to buy from the Company one one-hundredth of a share of a new series of
junior participating preferred stock (described below) for $65. If any person or
group acquires 20% or more of the Company's outstanding Common Stock, the
"flip-in" provision of the Rights will be triggered and each Right will entitle
a holder (other than such person or any member of such group) to buy, in lieu of
preferred shares, a number of additional shares of Common Stock of the Company
having a market value of twice the exercise price of the Right. Thus, if at the
time of the 20% acquisition the Company's Common Stock were to have a market
value per share equal to $32.50, the holder of each Right (other than such
person or any member of such group) would be entitled to purchase four shares of
the Company's Common Stock for $65, i.e., at a 50% discount. The Board of
Directors may, however, substitute the right to purchase the same number of one
one-hundredths of a share of the new preferred stock for the same price.
If the Company is involved in a merger or other business
combination at any time after a person or group has acquired 20% or more of the
Company's Common Stock, each Right will entitle a holder (other than a 20%
acquirer) to buy a number of shares of common stock of the acquiring company
having a market value of twice the exercise price of each Right. For example, if
at the time of the business combination the acquiring company's common stock
would have a per share value of $32.50, the holder of each Right (other than a
20% acquirer) would be entitled to receive four shares of the acquiring
company's common stock for $65, i.e., at a 50% discount.
The exercise price is subject to adjustment pursuant to
standard antidilution provisions. The above examples assume no change in the
exercise price.
Following the acquisition by any person or group of 20% or
more of the Company's Common Stock, but only prior to the acquisition by a
person or group of a 50% stake, the Board of Directors will also have the
ability to require the exchange of outstanding Rights (other than Rights held by
such person or any member of such group), in whole or in part, for one share of
Common Stock (or one one-hundredth of a share of the new preferred stock) per
Right. This provision would have an economically dilutive effect on the
acquirer, and provide a corresponding benefit to the remaining Rights holders,
that is comparable to the flip-in provision without requiring the holders of
Rights to go through the process and expense of exercising their Rights.
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The Board of Directors is also authorized to reduce the 20%
thresholds referred to above to not less than the greater of the sum of .001%
plus the largest percentage of the Company's Common Stock known to be owned at
the time or 10%.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 20% or more of the
outstanding Common Stock, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on such
basis and with such conditions as the Board in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
In addition to authorizing the new Rights, the Board of
Directors designated a series of junior participating preferred stock as the
preferred stock which is purchasable upon exercise of the Rights. The shares of
the junior participating preferred stock will be nonredeemable. Each preferred
share will be entitled to a cumulative dividend equal to the greater of $1 per
share or 100 times the dividend declared on the Common Stock. In the event of
liquidation, the holders of the preferred shares will be entitled to receive an
aggregate liquidation payment equal to the greater of $100 or 100 times the
payment made per share of Common Stock. Each preferred share will have 100
votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which Common Stock is exchanged,
each preferred share will be entitled to receive 100 times the amount received
per share of Common Stock. These rights are also protected by customary
anti-dilution provisions. In the event of issuance of preferred shares upon
exercise of the Rights, in order to facilitate trading a depositary receipt may
be issued for each one one-hundredth of a preferred share. The dividend,
liquidation and voting rights, and the non-redemption feature, of the preferred
shares are designed so that the value of the one-hundredth interest in a
preferred share purchasable with each Right will approximate the value of one
share of Common Stock.
C-2
