EXHIBIT 4.1
REGAL-BELOIT CORPORATION
and
BANKBOSTON, N.A.
Rights Agent
___________________
RIGHTS AGREEMENT
Dated as of January 28, 2000
TABLE OF CONTENTS
1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . .1
2. APPOINTMENT OF RIGHTS AGENT . . . . . . . . . . . . . . . . . . . . .3
3. ISSUE OF RIGHT CERTIFICATES.. . . . . . . . . . . . . . . . . . . . .4
4. FORM OF RIGHT CERTIFICATES. . . . . . . . . . . . . . . . . . . . . .5
5. COUNTERSIGNATURE AND REGISTRATION.. . . . . . . . . . . . . . . . . .5
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.. . . . . . .6
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.. . . .7
8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. . . . . . . . . .8
9. RESERVATION AND AVAILABILITY OF COMMON SHARES.. . . . . . . . . . . .9
10. COMMON SHARES RECORD DATE . . . . . . . . . . . . . . . . . . . . . .9
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS. 10
12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. . . . . 17
13. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER. . . . . . . . . . . . . . . . . . . . . . . . . . 17
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.. . . . . . . . . . . . . . 20
15. RIGHTS OF ACTION. . . . . . . . . . . . . . . . . . . . . . . . . . 21
16. AGREEMENT OF RIGHT HOLDERS. . . . . . . . . . . . . . . . . . . . . 21
17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER . . . . . . . . . 22
18. CONCERNING THE RIGHTS AGENT.. . . . . . . . . . . . . . . . . . . . 22
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.. . . . . 23
20. DUTIES OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . . . . . . 23
21. CHANGE OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . . . . . . 25
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22. ISSUANCE OF NEW RIGHT CERTIFICATES. . . . . . . . . . . . . . . . . 26
23. REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
24. EXCHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
25. NOTICE OF CERTAIN EVENTS. . . . . . . . . . . . . . . . . . . . . . 28
26. NOTICES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
27. SUPPLEMENTS AND AMENDMENTS. . . . . . . . . . . . . . . . . . . . . 29
28. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
29. BENEFITS OF THIS AGREEMENT. . . . . . . . . . . . . . . . . . . . . 30
30. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
31. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
32. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
33. DESCRIPTIVE HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . 31
34. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. . . . . . . . 31
Exhibit A - Form of Right Certificate
Exhibit B - Summary of Rights to Purchase Common Shares
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RIGHTS AGREEMENT
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THIS AGREEMENT, dated as of January 28, 2000, between REGAL-
BELOIT CORPORATION, a Wisconsin corporation (the "Company"), and BANKBOSTON,
N.A., a national banking association (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one common share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company outstanding on
February 25, 2000 (the "Record Date") payable on such date (the "Payment
Date"), and has 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), each Right
representing the right to purchase one-half of one Common Share of the Company
upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following
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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 15% or more of the
Common Shares of the Company then outstanding, but shall not include the
Company, any Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company, any
entity holding Common Shares for or pursuant to the terms of any such plan, or
any trustee, administrator or fiduciary of such a plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as a 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 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person would, but for the foregoing,
become an Acquiring Person 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 at any time that the Person is
or thereby becomes the Beneficial Owner of 15% or more of the Common Shares
of the Company then outstanding (other than Common Shares acquired solely as
a result of corporate action of the Company not caused, directly or
indirectly, by such Person), 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
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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 Securities Exchange Act of 1934, as amended (the "Exchange Act"),
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:
i. which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
ii. which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (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 of 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, or with respect to, 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
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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
Massachusetts are authorized or obligated by law or executive order to close.
e. "Close of business" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
f. "Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $.01, of the Company, or shares
having equivalent rights, privileges and preferences to common stock. "Common
Shares" when used with reference to any Person other than the Company shall
mean the capital stock (or equivalent equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control such first-
mentioned Person.
g. "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
h. "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
i. "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
j. "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
k. "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed or amended pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such.
l. "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
2. Appointment of Rights Agent. The Company hereby appoints the Rights
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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 of the Company) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
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as it may deem necessary or desirable, upon ten (10) days' prior written
notice to the Rights Agent. The Rights Agent shall have no duty to supervise,
and shall in no event be liable for, the acts or omissions of any such
co-Rights Agent.
3. Issue of Right Certificates.
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a. Until the earlier of (i) the tenth day after the Shares Acquisi-
tion Date or (ii) the tenth Business Day (or such later date as may be
determined by action of the Company's Board of Directors prior to such time as
any Person becomes an Acquiring Person) after the date of the commencement of,
or of the first public announcement of the intention of any Person to commence,
a tender or exchange offer the consummation of which would result in any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, any entity
holding Common Shares for or pursuant to the terms of any such plan, or any
trustee, administrator, or fiduciary of such a plan) becoming the Beneficial
Owner of Common Shares of the Company aggregating 15% or more of the then
outstanding Common Shares (including in either case any such date which is
after the date of this Agreement and prior to the Payment Date; the earlier of
such dates being herein referred to as the "Distribution Date"; provided,
however, that if the tenth day or Business Day, as the case may be, after the
pertinent date occurs before the Record Date, Distribution Date shall mean
the Record Date), (x) the Rights will be evidenced (subject to the provisions
of Section 3(b) hereof) by the certificates for Common Shares of the Company
registered in the names of the holders thereof (which 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 of the Company. 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 of the Company
as of the close of business on the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit A 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. The Company has prepared a Summary of Rights to Purchase Common
Shares, attached as Exhibit B hereto (the "Summary of Rights"), a copy of
which is available free of charge from the Company. With respect to
certificates for Common Shares of the Company outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof. Until the
Distribution Date (or the earlier of the Redemption Date or Final Expiration
Date), the surrender for transfer of any certificate for Common Shares of the
Company outstanding on the Record Date, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
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c. Certificates for Common Shares of the Company that become
outstanding (including, without limitation, certificates for reacquired Common
Shares referred to in the last sentence of this paragraph (c) and certificates
issued on the transfer of Common 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 a legend in substantially the following form:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Regal-Beloit
Corporation and BankBoston, N.A., dated as of January 28, 2000, and as such
agreement may be amended (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 Regal-Beloit Corporation. Regal-Beloit
Corporation will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
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, any Rights associated
with such Common Shares shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
4. Form of Right Certificates. The Right Certificates (and the forms
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of election to purchase Common Shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement, 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 Common Shares as shall be set
forth therein at the purchase price per Common Share set forth therein, but
the amount and type of securities purchasable upon exercise of each Right and
such purchase price shall be subject to adjustment as provided herein.
5. Countersignature and Registration.
----------------------------------
a. The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, Chief Executive Officer, President or
any Vice President either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof, and shall be
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attested by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless 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, neverthe-
less, 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 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 Rights 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.
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
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Mutilated, Destroyed, Lost or Stolen Right Certificates.
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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 Common Shares 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. Thereupon the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right Certificates.
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
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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.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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a. As provided herein, each Right shall be exercisable to purchase
one-half of one Common Share, subject to further adjustment. The registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent, together with payment of
the Purchase Price for each Common Share as to which the Rights are exercised,
at or prior to the earliest of (i) the close of business on January 28, 2010,
subject to extension (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the "Redemption Date"),
and (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof; provided, however, that if the number of Rights exercised
would entitle the holder thereof to receive any fraction of a Common Share
greater than one-half of a Common Share, then the holder thereof shall not be
entitled to exercise such Rights unless such holder concurrently purchases
from the Company (and in such event the Company shall sell to such holder), at
a price in proportion to the Purchase Price, an additional fraction of a
Common Share which, when added to the number of Common Shares to be received
upon such exercise, will equal an integral number of Common Shares.
b. The Purchase Price for each full Common Share pursuant to the
exercise of a Right shall initially be $60 (equivalent to $30 for each one-half
of one Common Share), shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below (the
Purchase Price ).
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 Common 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, as set forth
below, the Rights Agent shall thereupon promptly (i) requisition from any
transfer agent of the Common Shares certificates for the number of Common
Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional Common Shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates, 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
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appropriate, after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof)
shall be made by certified check, cashier's check, bank draft or money order
payable to the order of the Company, except that, if so provided by the Board
of Directors of the Company, the payment of the Purchase Price following the
occurrence of a Section 11(a)(ii) Event (as hereinafter defined) and until
the first occurrence of a Section 13 Event (as hereinafter defined) may be
made wholly or in part by delivery of a certificate or certificates (with
appropriate stock powers executed in blank attached thereto) evidencing a
number of Common Shares of the Company equal to the then Purchase Price
divided by the closing price (as determined pursuant to Section 11(d) hereof)
per Common Share on the Trading Day (as such term is hereinafter defined)
immediately preceding the date of such exercise. If the Company is obligated
to issue other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
d. In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14
hereof.
e. Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to take any action
with respect to a registered holder of a Right Certificate upon the occurrence
of any purported transfer, assignment or exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed
the certificate following the form of assignment or election to purchase set
forth on the reverse of the Right Certificate surrendered for such transfer,
assignment or 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.
8. Cancellation and Destruction of Right Certificates. All Right
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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 cancelled
form, or if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all cancelled Right Certificates to the Company or
shall, at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
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9. Reservation and Availability of Common Shares.
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a. The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Common Shares
or any authorized and issued Common Shares held in its treasury the number of
Common Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7.
b. So long as the Common Shares issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all Common Shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
c. The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares (except as
otherwise provided by any corporation law applicable to the Company).
d. 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 Common 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 for the Common 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 for Common 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.
10. Common Shares Record Date. Each person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Common
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the Common Shares transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such shares
on, and such certificate shall be dated, the next succeeding Business Day on
which the Common Shares transfer books of the Company are open.
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11. Adjustment of Purchase Price, Number of Shares or Number of Rights.
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The Purchase Price, the number of Common 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. Adjustment of Purchase Price - Anti-Dilution and Other Matters.
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i. In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares into a smaller number of Common Shares or (D) issue
any shares of its capital stock in a reclassification of the Common 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 propor-
tionately adjusted so that the holder of any Right exercised after such time
shall be entitled to receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to
such date and at a time when the Common Shares transfer books of the Company
were open, such holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or reclassifi-
cation; provided, however, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right.
If an event occurs which would require an adjustment under both Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
ii. Subject to Section 24 of this Agreement, in the event any
Person shall become an Acquiring Person, other than pursuant to any
transaction set forth in Section 13(a), each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a price equal to
two times the then current Purchase Price per full Common Share multiplied by
the number of Common Shares for which a Right is then exercisable, in
accordance with the terms of this Agreement, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying two times
the then current Purchase Price per full Common Share by the number of Common
Shares for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Common Shares of the
Company (determined pursuant to Section 11(d)) on the date the Person became
an Acquiring Person (such number of shares, the "Adjustment Shares").
From and after such time as a Person becomes an Acquiring
Person (a "Section 11(a)(ii) Event"), any Rights that are or were acquired or
10
beneficially owned by such 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 cancelled. The
Company shall use all reasonable efforts to ensure that the provisions of this
paragraph are complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
iii. In the event that there shall not be sufficient Common
Shares of the Company issued but not outstanding or authorized but unissued
(and not reserved for issuance for purposes other than upon exercise of the
Rights) to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase Price payable with respect to such
Right (such excess, the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Shares or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock, if any,
which the Board of Directors of the Company has deemed to have the same value
as Common Shares (such shares of preferred stock, hereinafter referred to as
"common stock equivalents")), (4) debt securities of the Company, (5) other
assets or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been determined by
the Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate
provision to substitute for the Adjustment Shares pursuant to clause (B) above
within thirty (30) days following the occurrence of a Section 11(a)(ii) Event
(the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and without requiring
payment of any portion of the Purchase Price, Common Shares (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company
shall determine in good faith that it is likely that sufficient additional
Common Shares might be authorized for issuance for exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder
11
approval for the authorization of such additional shares (such period, as it
may be extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall provide, subject
to the last paragraph of Section 11(a)(ii) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period
to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence
and to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Shares shall be the current per
share market price (as determined pursuant to Section 11(d) hereof) of the
Common Shares on the Section 11(a)(ii) Trigger Date and the value of any
"common stock equivalent" shall be deemed to have the same value as the Common
Shares on such date.
b. Adjustment of Purchase Price Options and Warrants. In case
the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Common Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Common Shares (or securities convertible into Common Shares) at a price per
Common Share (or having a conversion price per share, if a security
convertible into Common Shares) less than the then current per share market
price of the Common 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
in accordance with this Section 11(b). In such event, the Purchase Price
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 Common Shares outstanding on such record date plus the number of
Common Shares which the aggregate offering price of the total number of Common
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 Common Shares
outstanding on such record date plus the number of additional Common Shares to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In no event, however,
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Common 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. 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.
12
c. Adjustment of Purchase Price -- Distribution of Assets.
-------------------------------------------------------
In case the Company shall fix a record date for the making of a distribution
to all holders of the Common Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend payable in Common
Shares) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date
shall be determined in accordance with this Section 11(c). In such event, the
Purchase Price 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 Common Shares (as
defined in Section 11(d)) on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent)
of the portion of the assets or evidences of indebtedness so to be distributed
or of such subscription rights or warrants applicable to one Common Share and
the denominator of which shall be such current per share market price of the
Common Shares. In no event, however, 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. Such
adjustments shall be made successively whenever such a record date is fixed.
In the event that such distribution is not so made, the Purchase Price shall
again be adjusted to the Purchase Price which would then be in effect if such
record date had not been fixed. For the purposes of this Section 11(c), it is
understood that without creating any implication that an increase of more than
one cent the amount of a regular quarterly cash dividend would cause a
dividend to fail to satisfy the standard that the dividend is a regular
quarterly cash dividend, an increase of not to exceed one cent per share,
appropriately adjusted to reflect any stock split, stock dividend of similar
transaction occurring after the date hereof, shall not cause a dividend not
to be a regular quarterly cash dividend.
d. Current Market Price. For the purpose of any computation
---------------------
hereunder, the "current per share market price" of the Common Shares on any
date shall be deemed to be the average of the daily closing prices per Common
Share 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 Common Shares is determined
during a period following the announcement by the issuer of such Common Shares
of (i) a dividend or distribution on such Common Shares payable in Common
Shares or securities convertible into Common Shares, or (ii) any subdivision,
combination or reclassification of Common Shares 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
Common Share. The closing price for each Trading Day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the American Stock
Exchange or, if the Common Shares are not listed or admitted to trading on
13
the American 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 Common Shares are listed
or admitted to trading or, if the Common Shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("Nasdaq") or such other system then in use,
or, if on any such date the Common Shares are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Common Shares 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 Common
Shares are listed or admitted to trading is open for the transaction of
business or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, a Business Day.
e. Minimum Adjustment to Purchase Price. 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 shall be made to the
nearest cent or to the nearest ten-thousandth of a share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
f. Adjustment to Other Capital Stock. If, as a result of an
----------------------------------
adjustment made pursuant to Section 11(a), the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than Common Shares, thereafter the number of such other shares
so receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the Common Shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with
respect to the Common Shares shall apply on like terms to any such other
shares.
g. Subsequent Adjustment. 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 Common Shares purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
h. Adjustment of Number of Common Shares. 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
Section 11(b) and (c), each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right to purchase, at the
14
adjusted Purchase Price, that number of Common Shares (calculated to the
nearest ten-thousandth of a Common Share) obtained by (i) multiplying (x) the
number of Common Shares covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
i. Adjustment of Number of Rights. 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 Common Shares
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 Common Shares 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. No Change to Certificates. Irrespective of any adjustment or
--------------------------
change in the Purchase Price or the number of Common Shares issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of Common
Shares which were expressed in the initial Right Certificates issued hereunder.
k. Fully Paid and Nonassessable Common Shares. Before taking any
action that would cause an adjustment reducing the Purchase Price below the
par value, if any, of the Common Shares issuable upon exercise of the Rights,
15
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 (except as otherwise provided by any corporation
law applicable to the Company) Common Shares at such adjusted Purchase Price.
x. Xxxxx in Adjustment. In any case in which this Section 11
--------------------
shall require that an adjustment in the Purchase Price be made effective as of
a record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date of the Common Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Common 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. Certain Reductions in Purchase Price. 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 Common Shares, issuance wholly for cash
of any Common Shares at less than the current market price, issuance wholly
for cash of Common Shares or securities which by their terms are convertible
into or exchangeable for Common Shares, dividends on Common Shares payable in
Common Shares or issuance of rights, options or warrants referred to in
Section 11(b), hereafter made by the Company to holders of its Common Shares
shall not be taxable to such shareholders.
n. Certain Covenants of the Company. The Company covenants and
---------------------------------
agrees that it shall not, at any time after the earlier of the Distribution
Date or the Shares Acquisition Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof) or (iv)
consummate a share exchange with any other Person, if at the time of or
immediately after such consolidation, merger, sale or share exchange (A) there
are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, (B) prior to,
simultaneously with or immediately after such consolidation, merger, sale or
share exchange the shareholders of the Person who constitute, or would
constitute, the "Principal Party" for purposes of Section 13(b) hereof shall
have received a distribution of Rights previously owned by such Person or any
16
of its Affiliates and Associates or (C) the form or nature of organization of
the Principal Party would preclude or limit the exercisability of the Rights.
o. Protection of Rights. The Company covenants and agrees that,
---------------------
after the Distribution Date, it will not, except as permitted by Section 23,
Section 24 or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
12. Certificate of Adjusted Purchase Price or Number of Shares.
-----------------------------------------------------------
Whenever an adjustment is made as provided in Sections 11 and 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 a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof.
13. Consolidation, Merger, Share Exchange or Sale or Transfer of Assets
-------------------------------------------------------------------
or Earning Power.
-----------------
a. In the event that, following the Shares Acquisition Date,
directly or indirectly, any one of the following shall occur, then the
adjustments as described below in Section 13(b) shall be made:
i. the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or
merger;
ii. any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall consolidate with,
or merge with or into, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger, or any Person or
Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consummate a share exchange with the
Company, and, in connection with such consolidation, merger or share exchange,
all or part of the outstanding Common Shares of the Company 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 transaction
or a series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof).
17
b. In each such case as set forth above in Section 13(a), proper
provision shall be made so that:
i. each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof
at a price equal to two times the then current Purchase Price per full Common
Share multiplied by the number of Common Shares for which a Right is then
exercisable (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of any of the events described in subsection (i), (ii) or (iii) of
Section 13(a) (a "Section 13 Event"), two times the Purchase Price per full
Common Share in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event multiplied by the number of Common Shares for which a Right
was exercisable immediately prior to such first occurrence), in accordance
with the terms of this Agreement, such number of validly authorized and
issued, fully paid, nonassessable (except as otherwise required by any
corporation law applicable to the Principal Party (as such term is hereinafter
defined)) and freely tradeable Common Shares of the Principal Party, not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying two times
the then current Purchase Price per full Common Share by the number of Common
Shares for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying two
times the number of such shares for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase
Price per full Common Share in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence
of a Section 13 Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of the current market
price (determined pursuant to Section 11(d) hereof) per Common Share of such
Principal Party on the date of consummation of such Section 13 Event;
ii. such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement;
iii. the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event;
iv. such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of its Common Shares)
in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights; and
18
v. the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
c. "Principal Party" shall mean
i. in the case of any transaction described in subsection (i)
or (ii) of Section 13(a), the Person that is the issuer of any securities into
which Common Shares of the Company are converted in such merger, consolidation
or share exchange, and if no securities are so issued, (A) the Person that is
the other party to the merger, consolidation or share exchange and that
survives such merger or consolidation, or, if there is more than one such
Person, the Person the Common Shares of which have the greatest aggregate
market value of shares outstanding or (B) if the Person that is the other
party to the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or consolidation
(including the Company if it survives); and
ii. in the case of any transaction described in subsection
(iii) of Section 13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month-period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
d. The Company shall not consummate any such consolidation,
merger, share exchange, sale or transfer unless the Principal Party shall have
a sufficient number of authorized Common Shares which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a),
(b) and (c) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger, share exchange or
sale of assets mentioned in paragraph (a) of this Section 13, the Principal
Party will:
i. prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the Rights
and the securities purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such registration statement to
(A) become effective as soon as practicable after such filing and (B) remain
19
effective (with a prospectus at all times meeting the requirements of the Act)
until the Final Expiration Date; and
ii. deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, share exchanges, sales or other transfers. In the event that
a Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(b).
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. In lieu
of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the 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 American Stock Exchange or, if the Rights are not listed or
admitted to trading on the American 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 Common
Shares upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of fractional Common Shares, equal
to one-half of a Common Share or less, 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 Common Share. Any exercise of Rights that would entitle the
20
holder thereof to receive any fraction of a Common Share greater than one-half
of a Common Share shall be governed by Section 7(a) hereof. For purposes of
this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d) 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 right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
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.
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;
c. the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
21
d. notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court or
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the Company
must use its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Shareholder. No holder, as
--------------------------------------------------
such, of any Right Certificate shall be entitled to vote, receive dividends or
other distributions or be deemed for any purpose the holder of the Common
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 Certificate, 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
the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
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 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 gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability
in the premises.
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 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.
22
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 business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in
the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
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.
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 the Chairman of the Board,
the Chief Executive Officer, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant
23
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 gross negligence, bad faith or willful
misconduct.
d. The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
e. The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due 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 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 actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Common Shares or other securities to be issued pursuant to this Agreement or
any Right Certificate or as to whether any Common Shares or other securities
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 Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary, any Assistant Secretary, the Treasurer or
any Assistant 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, or act as the transfer
24
agent for, any of the Rights, Common Shares 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.
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 by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed
to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the 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) a corporation
organized and doing business under the laws of the United States or of the
State of New York or the State of Wisconsin (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 the State of Wisconsin), in
good standing, having an office or agency in the State of Wisconsin or the
State of New York, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination
by federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million, or (b)
an Affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
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 and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
23. Redemption.
-----------
a. The Rights may be redeemed by action of the Board of Directors
pursuant to subsection (b) of this Section 23 and shall not be redeemed in any
other manner.
b. The Board of Directors of the Company may, at its option, at
any time prior to 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 $.001 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. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company's right
of redemption hereunder has expired.
c. Immediately upon the effectiveness of the action of the Board
of Directors of the Company ordering the redemption of the Rights pursuant to
subsection (b) 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. Within 10 days after the
effectiveness of the action of the Board of Directors ordering the redemption
of the Rights pursuant to subsection (b), 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.
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 of the Company 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, any entity holding Common Shares for or pursuant to the terms of
any such plan, or any trustee, administrator or fiduciary of such a plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares of the Company then
outstanding.
b. Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (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 at their last
addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of
Rights.
c. In any exchange pursuant to this Section 24, the Company, at
its option, may substitute common stock equivalents (as such term is defined
in Section 11(a)(iii) hereof) for some or all of the Common Shares
exchangeable for Rights.
d. In the event that there shall not be sufficient Common Shares
or common stock equivalents 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 or common stock equivalents for issuance
upon exchange of the Rights.
e. The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issued 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 (e), 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) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
25. Notice of Certain Events.
-------------------------
a. In case the Company shall propose, after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the holders of Common
Shares or to make any other distribution to the holders of Common Shares
(other than a regular quarterly cash dividend), (ii) to offer to the holders
of Common Shares rights or warrants to subscribe for or to purchase any
additional Common Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of Common
Shares (other than a reclassification involving only the subdivision of
outstanding Common Shares), (iv) to effect any consolidation or merger into or
with (other than a merger of a Subsidiary into or with the Company), to effect
any share exchange 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, or
(v) to effect the liquidation, dissolution or winding up of the Company, 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, share exchange, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common 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 Common 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, whichever shall be the earlier.
b. In case any of Section 11(a)(ii) Event or Section 13 Event
shall occur, then, in any such case, (i) 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,
28
which notice shall include a brief summary of the Section 11(a)(ii) Event or
Section 13 Event, as the case may be, and the consequences thereof to holders
of Rights.
26. Notices.
--------
a. Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right Certificate to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
Regal-Beloit Corporation
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxx 00000-0000
Attention: Secretary
b. 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:
BankBoston, N.A.
c/o Equiserve Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
c. Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on
the registry books of the Company.
27. Supplements and Amendments. Prior to the Distribution Date and
---------------------------
subject to the penultimate sentence of this Section 27, the Company may and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of
certificates representing Common Shares of the Company. Without limiting the
foregoing, the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 3(a) hereof from 15% to not less than 10%, with
appropriate exceptions for persons then beneficially owning Common Shares of
the Company constituting a percentage of the number of Common Shares then
outstanding equal to or in excess of the new threshold. From and after the
Distribution Date and subject to the penultimate sentence of this Section 27,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provision herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person); provided, that from and after the Distribution Date this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of
this sentence, (A) a time period relating to when the Rights may be redeemed
at such time as the Rights are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which reduces the then
effective Redemption Price or moves to an earlier date the then effective
Final Expiration Date. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Shares of the Company.
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.
29. Benefits of this Agreement. Nothing in this Agreement shall be
---------------------------
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Shares of the Company) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares of the Company).
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.
31. Governing Law. This Agreement and each Right Certificate issued
--------------
hereunder shall be deemed to be a contract made under the laws of the State of
Wisconsin and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made
and performed entirely within such State.
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.
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.
34. Determinations and Actions by the Board of Directors. For all
-----------------------------------------------------
purposes of this Agreement, any calculation of the number of Common Shares of
the Company outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of
which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (a) interpret the
provisions of this Agreement, and (b) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement and
any determination as to whether actions or any Person shall be such as to
cause such Person to beneficially own shares held by another Person). All
such actions, calculations, interpretations and determinations (including,
for purposes of clause (ii) below, all omissions with respect to the
foregoing) which are done or made by the Board of the Company in good faith,
shall (i) be final, conclusive and binding on the Company, the Rights Agent,
the holders of the Rights and all other parties, and (ii) not subject the
Board of the Company to any liability to the holders of the Rights.
31
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.
REGAL-BELOIT CORPORATION
Attest:
By: /S/ XXXXX X. XXXXXXXX By: /S/ XXXXXXX X. XXXXXX
-------------------------------- ----------------------------------
Title: EXECUTIVE VICE PRESIDENT Title: VICE PRESIDENT, CHIEF FINANCIAL
OFFICER AND SECRETARY
----------------------------- -------------------------------
BANKBOSTON, N.A.
Attest:
By: /S/ XXXX XXXXXX By: /S/ XXXXX X. XXXXXX
-------------------------------- ----------------------------------
Title: ACCOUNT MANAGER Title: MANAGING DIRECTOR
----------------------------- ------------------------------
32
EXHIBIT A
[Form of Right Certificate]
Certificate No. R-
Rights
------
NOT EXERCISABLE AFTER __________, 2010 (SUBJECT TO EXTENSION) OR
EARLIER IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT
TO REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
REGAL-BELOIT CORPORATION
This certifies that ________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of January 28, 2000, and as such agreement may
be amended (the "Rights Agreement"), between Regal-Beloit Corporation, a
Wisconsin corporation (the "Company"), and BankBoston, N.A. (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.,
Beloit, Wisconsin time, on January 28, 2010, subject to extension, at the
principal office of the Rights Agent, or at the office of its successor as
Rights Agent, one-half of one fully paid nonassessable (except as otherwise
provided by any corporation law applicable to the Company) share of common
stock, par value $.01 ("Common Shares"), of the Company, at a purchase price
of $60 per Common Share (the "Purchase Price") (equivalent to $30 for each
one-half of a Common Share), 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 Common Shares
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 January 28,
2000, based on the Common Shares as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of Common Shares 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.
A-1
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 executive offices
of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.001 per Right or (ii) may be exchanged in whole or in
part for Common Shares. The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, but prior
to such Person's acquisition of 50% or more of the outstanding Common Shares,
exchange the Rights evidenced by this Certificate for Common Shares, at an
exchange ratio of one Common Share per Right, subject to adjustment, as
provided in the Rights Agreement.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement. No Rights may be exercised that
would entitle the holder to any fraction of a Common Share greater than one-
half of a Common Share unless concurrently therewith such holder purchases an
additional fraction of a Common Share which, when added to the number of
Common Shares to be received upon such exercise, equals an integral number of
Common Shares, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common 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.
A-2
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ____________, ____.
ATTEST: REGAL-BELOIT CORPORATION
_______________________________ By:__________________________
Title:_______________________
Countersigned:
-------------------------------
By: _______________________________
Authorized Signature
A-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfers unto
____________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________ this Right
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ____________, ____
_____________________________________
Signature
Signature Guaranteed:
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
------------------------------------------------------------------------------
A-4
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate.)
To REGAL-BELOIT CORPORATION:
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the Common Shares
issuable upon the exercise of such Rights and requests that certificates for
such Common Shares be issued in the name of:
Please insert social security
or other identifying number
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated: ____________, ____
______________________________________
Signature
Signature Guaranteed:
A-5
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.
A-6
[Form of Reverse Side of Right Certificate -- continued]
------------------------------------------------------------------------------
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 foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
A-7
EXHIBIT B
REGAL-BELOIT CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
On January 28, 2000, the Board of Directors of Regal-Beloit
Corporation (the "Company") declared a dividend of one common share purchase
right (a "Right") for each outstanding share of common stock, $.01 par value
(the "Common Shares"), of the Company. The dividend is payable on February
25, 2000 to the shareholders of record on that date (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company one-half of
one Common Share, at a price of $60 per Common Share (equivalent to $30 for
each one-half of a Common Share), subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and BankBoston, N.A.,
as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (other
than the Company, a subsidiary of the Company or an employee benefit plan of
the Company or a subsidiary) (an "Acquiring Person") has acquired beneficial
ownership of 15% or more of the outstanding Common Shares (the "Shares
Acquisition Date") or (ii) 10 business days (or such later date as may be
determined by action of the Company's Board of Directors prior to such time
as any person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group (other than the Company, a subsidiary of the Company or an employee
benefit plan of the Company or a subsidiary) of 15% or more of such
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common
Share certificate.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares, outstanding as of the Record Date, even without such notation,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
B-1
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on January 28, 2010 (the "Final Expiration Date"), unless
the Rights are earlier redeemed or exchanged by the Company, or the Rights
Agreement is amended, in each case as described below.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of certain rights
or warrants to subscribe for or purchase Common Shares at a price, or
securities convertible into Common Shares with a conversion price, less than
the then current market price of the Common Shares or (iii) upon the
distribution to holders of the Common Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends or dividends payable in
Common Shares) or of subscription rights or warrants (other than those
referred to above).
In the event that any person becomes an Acquiring Person (a "Flip-In
Event"), each holder of a Right (except as otherwise provided in the Rights
Agreement) will thereafter have the right to receive upon exercise that number
of Common Shares (or, in certain circumstances cash, property or other
securities of the Company or a reduction in the Purchase Price) having a
market value of two times the then current Purchase Price. Notwithstanding
any of the foregoing, following the occurrence of a Flip-In Event all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, or subsequently become beneficially owned by an Acquiring Person,
related persons and transferees will be null and void.
In the event that, at any time following the Shares Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction or (ii) 50% or more of its consolidated assets or earning power
are sold (the events described in clauses (i) and (ii) are herein referred to
as "Flip-Over Events"), proper provision will be made so that holders of
Rights (except as otherwise provided in the Rights Agreement) will thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times
the then current Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Common Shares will be issued. In lieu of
fractional Common Shares equal to one-half of a Common Share or less, an
adjustment in cash will be made based on the market price of the Common Shares
on the last trading day prior to the date of exercise. No Rights may be
exercised that would entitle the holder thereof to any fractional Common Share
greater than one-half of a Common Share unless concurrently therewith such
holder purchases an additional fraction of a Common Share which when added to
B-2
the number of Common Shares to be received upon such exercise, equals an
integral number of Common Shares.
The Purchase Price is payable by certified check, cashier's check,
bank draft or money order or, if so provided by the Company, the Purchase
Price following the occurrence of a Flip-In Event and until the first
occurrence of a Flip-Over Event may be paid in Common Shares having an
equivalent value.
At any time after a person becomes an Acquiring Person and prior to
the acquisition by such Acquiring Person of 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by any Acquiring Person which have become void), in
whole or in part, at an exchange ratio of one Common Share per Right (subject
to adjustment).
At any time prior to a person becoming an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.001 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 of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Other than amendments that would change the Redemption Price or move
to an earlier date the expiration of the Rights, the terms of the Rights may
be amended by the Board of Directors of the Company without the consent of the
holders of the Rights, including an amendment to (i) change the Purchase Price
or (ii) lower the threshold for exercisability of the Rights from 15% to not
less than 10%, with appropriate exceptions for any person then beneficially
owning a percentage of the number of Common Shares then outstanding equal to
or in excess of the new threshold, except that from and after the Distribution
Date no such amendment may adversely affect the interests of the holders of
the Rights. The Rights may also be amended to extend the expiration date
thereof.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Company will file a copy of the Rights Agreement with the
Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A filed with respect to the Rights. A copy of the Rights Agreement
is also available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is hereby incorporated herein by
reference.
B-3
