Exhibit 4.2
XXXXXXX INDUSTRIES, INC.
and
XXXXXX TRUST AND SAVINGS BANK, Rights Agent
RIGHTS AGREEMENT
Dated as of
February 28, 1997
Page
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . .1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . .7
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . .7
Section 4. Form of Right Certificates. . . . . . . . . . . . . . . . 10
Section 5. Countersignature and Registration . . . . . . . . . . . . 11
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates, Mutilated,
Destroyed, Lost or Stolen Right
Certificates. . . . . . . . . . . . . . . . . . . . . . . 12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . . . . . . . . . . . 13
Section 8. Cancellation and Destruction of Right
Certificates. . . . . . . . . . . . . . . . . . . . . . . 17
Section 9. Reservation and Availability of Shares of
Capital Stock . . . . . . . . . . . . . . . . . . . . . . 18
Section 10. Record Date . . . . . . . . . . . . . . . . . . . . . . . 19
Section 11. Adjustment of Purchase Price, Number of
Shares or Number of Rights. . . . . . . . . . . . . . . . 20
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. . . . . . . . . . . . . . . . . . . . . 36
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. . . . . . . . . . . . . . . . 37
Section 14. Fractional Rights and Fractional Shares . . . . . . . . . 41
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . 43
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . 44
Section 17. Right Certificate Holder Not
Deemed a Shareholder. . . . . . . . . . . . . . . . . . . 45
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . 46
Section 19. Merger or Consolidation or Change
of Name of Rights Agent . . . . . . . . . . . . . . . . . 46
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . 47
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . 51
Section 22. Issuance of New Right
Certificate . . . . . . . . . . . . . . . . . . . . . . . 52
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . 53
Section 24. Notice of Certain Events. . . . . . . . . . . . . . . . . 55
Section 25. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 26. Supplements and Amendments. . . . . . . . . . . . . . . . 57
Section 27. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 28. Successors. . . . . . . . . . . . . . . . . . . . . . . . 60
Section 29. Determinations and Actions by the
Board of Directors, etc.. . . . . . . . . . . . . . . . . 60
Section 30. Benefits of this Agreement. . . . . . . . . . . . . . . . 61
Section 31. Severability. . . . . . . . . . . . . . . . . . . . . . . 61
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . 62
Section 33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 62
Section 34. Descriptive Headings. . . . . . . . . . . . . . . . . . . 62
Exhibit A - Form of Rights Certificate. . . . . . . . . . . . . . . .A-1
Exhibit B - Summary of Rights to Purchase
Common Stock. . . . . . . . . . . . . . . . . . . . . . .B-1
RIGHTS AGREEMENT
This Agreement, dated as of February 28, 1997 is between XXXXXXX
INDUSTRIES, INC., a Michigan corporation (the "Company"), and XXXXXX TRUST
AND SAVINGS BANK, an Illinois banking corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution (the "Distribution") of one Right for each
outstanding share of the Common Stock, $1.00 par value (the "Common Stock"),
of the Company outstanding at the close of business on May 9, 1997 and has
authorized the issuance of one Right in respect of each share of Common
Stock of the Company issued between May 9, 1997 and the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date (as such
terms are hereinafter defined), and under certain other circumstances, each
Right initially representing the right to purchase one share of the Common
Stock, upon the terms and subject to the conditions hereinafter set forth
(the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of securities of the Company constituting a Substantial
Block (as such term is hereinafter defined), but shall not include the
Company or any Subsidiary of the Company, or any employee benefit plan of
the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan. Notwithstanding the foregoing, if the Board of
Directors of the Company (with the concurrence of a majority of the
Continuing Directors) determines in good faith that a Person who would
otherwise be an "Acquiring Person", as defined pursuant to the first
sentence of this paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this paragraph (a), then
such Person shall not, solely as a result of such inadvertent acquisition,
be deemed to be an "Acquiring Person" for any purpose of this Agreement. No
Person shall become an "Acquiring Person" as the result of an acquisition of
Common Stock by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned
by such Person to 20% or more of the Common Stock then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of 20%
or more of the Common Stock then outstanding by reason of share purchases by
the Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional shares of Common Stock, then such Person
shall be deemed to be an "Acquiring Person." For purposes of this Agreement,
including, without limitation, sections 1(g), 3(c), 4(b), 7(e), and the form
of Rights Certificate set forth as Exhibit A to the Rights Agreement
(including the form of assignment and election to purchase on the reverse
side thereof), the term "Acquiring Person" shall be deemed to include any
Adverse Person.
(b) "Adverse Person" shall mean any Person with respect to whom
the Board of Directors (with the concurrence of a majority of the Outside
Directors) has made any of the determinations referred to in Section
11(a)(ii)(D).
(c) "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 March 1, 1997.
(d) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "Beneficially Own" any securities:
(i) which such Person, or any of such Person's
Affiliates or Associates, beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, 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 (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own," (1) securities
tendered pursuant to a tender or exchange offer made by such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (2) securities
issuable upon exercise of Rights at any time prior to the occurrence
of a Triggering Event or (3) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event, which
Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant
to Section 3(a) hereof ("Original Rights") or pursuant to Section
11(i) or Section 22 hereof in connection with an adjustment made
with respect to Original Rights; or (B) the right to vote or dispose
of, pursuant to any agreement, arrangement or understanding (whether
or not in writing); provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to "Beneficially Own," any
security under this clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is not
then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of this paragraph (d))
or disposing of any securities of the Company; provided, however,
that nothing in this paragraph (d) shall cause a person engaged in
business as an underwriter of securities to be the "Beneficial
Owner" of, or to "Beneficially Own," any securities acquired through
such person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of
such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of Illinois are
authorized or obligated by law or executive order to close.
(f) "close of business" on any given date shall mean 5:00 P.M.,
Chicago time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Chicago time, on the next succeeding
Business Day.
(g) "Common Stock" when used with reference to the Company shall
mean the Common Stock, $1.00 par value, of the Company and when used with
reference to any Person other than the Company shall mean the capital stock
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person
or, if such Person is a Subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person.
(h) "Continuing Director" shall mean any member of the Board of
Directors of the Company, while such person is a member of the Board, who is
not an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate and was a member of the Board prior to the Shares
Acquisition Date, and any successor of a Continuing Director, while such
successor is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or representative or nominee
of an Acquiring Person or of any such Affiliate or Associate, and is
recommended or elected to succeed the Continuing Director by a majority of
the Continuing Directors.
(i) "Outside Directors" shall mean the Directors of the Company
who are not officers of the Company or any of its Subsidiaries and who are
not Acquiring Persons, Adverse Persons or representatives, nominees,
Affiliates or Associates of Acquiring Persons or Adverse Persons.
(j) "Person" shall mean any individual, firm, corporation or
other entity.
(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 pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such; provided that, if such Person is determined not to have
become an Acquiring Person pursuant to the second sentence of Section 1(a)
hereof, then no Shares Acquisition Date shall be deemed to have occurred.
(l) A "Subsidiary" of any Person or the Company 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 or the Company, respectively.
(m) "Substantial Block" shall mean a number of shares of the
Common Stock which equals or exceeds 20% of the number of shares of the
Common Stock then outstanding.
(n) "Triggering Event" shall mean any event described in Section
11(a)(ii)(A), (B), (C) or (D) or Section 13(a).
Section 2. Appointment of Rights Agent, The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the close of
business on the day which is the earliest of (i) the tenth Business Day
after the Shares Acquisition Date, (ii) such date as a majority of the
Continuing Directors may fix following the commencement, or the first public
announcement of the intent to commence, by any Person (other than the
Company, any Subsidiary of the Company, or any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person or any entity
organized, appointed or established by the Company for or pursuant to the
terms of any such plan) of a tender or exchange offer upon the successful
consummation of which such Person, together with its Affiliates and
Associates, would be an Acquiring Person (irrespective of whether any shares
are actually purchased pursuant to any such offer), or (iii) the tenth
Business Day after the date the Board of Directors of the Company determines
that a Person is an Adverse Person pursuant to Section 11(a)(ii)(D)
(including any such date which is after the date of this Agreement and prior
to the issuance of the Rights; the earliest of the dates in clauses (i),
(ii) and (iii) hereof being herein referred to as the "Distribution Date"
and being subject to extension by a majority of the Continuing Directors
pursuant to Section 26 hereof), (x) the Rights will be evidenced (subject to
the provisions of paragraph (b) of this Section 3) by the certificates for
the Common Stock registered in the names of the holders of the Common Stock
(which certificates shall be deemed also 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
the Common Stock. As soon as practicable after the Distribution Date, the
Rights Agent will send, by first-class, postage prepaid mail, to each record
holder of the Common Stock 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, evidencing
one Right for each share of the Common Stock so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On May 12, 1997 or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Common Stock, in
substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on May 9, 1997, at the address of
such holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of May 9, 1997, until the
Distribution Date, the Rights will be evidenced by such certificates for the
Common Stock registered in the names of the holders of the Common Stock.
Until the Distribution Date (or earlier redemption, exchange or expiration
of the Rights), the surrender for transfer of any of the certificates for
the Common Stock outstanding on May 9, 1997, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common
Stock issued after May 9, 1997 but prior to the earlier of the Distribution
Date or the Expiration Date or the Final Expiration Date (as such terms are
defined in Section 7). Certificates representing such shares of Common Stock
shall have impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between XXXXXXX
INDUSTRIES, INC. and XXXXXX TRUST AND SAVINGS BANK, Rights Agent,
dated as of February 28, 1997 (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 XXXXXXX
INDUSTRIES, INC. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
XXXXXXX INDUSTRIES, INC. will mail to the holder of this certificate
a copy of the Rights Agreement (as in effect on the date of mailing)
without charge promptly after receipt of a written request therefor.
Under certain circumstances, Rights which are or were beneficially
owned by Acquiring Persons or their Affiliates or Associates (as
such terms are defined in the Rights Agreement) and any subsequent
holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. In the event that the Company purchases or acquires any shares
of the Common Stock after May 9, 1997 but prior to the Distribution Date,
any Rights associated with such shares of the Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise
any Rights associated with the Common Stock which is no longer outstanding.
(d) The Company will promptly notify the Rights Agent of the
occurrence of a Distribution Date.
Section 4. Form of Right Certificates. (a) The Right Certificates
(and the forms of election to purchase shares and of assignment to be
printed on the reverse thereof) shall be substantially 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 the National Association of Securities Dealers, Inc. or 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, whenever issued, shall be dated as of May 12, 1997, and on
their face shall entitle the holders thereof to purchase such number of
shares of the Common Stock as shall be set forth therein at the price per
share set forth therein (the "Purchase Price"), but the number of such
shares and the Purchase Price shall be subject to adjustment as provided
herein.
(b) Notwithstanding any other provision of this Agreement, any
Right Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights Beneficially Owned by (i) an Acquiring Person or any
Associate or Affiliate thereof, (ii) on or after the Distribution Date any
Person who subsequently becomes an Acquiring Person (or an Affiliate or
Associate of an Acquiring Person), (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iv) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a primary purpose
or effect avoidance of Section 7(e) hereof, any Right Certificate issued at
any time to any nominee of such Acquiring Person, Associate or Affiliate,
and any Right Certificate issued pursuant to Section 6 or Section 11 upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain the following legend:
The Rights represented by this Right
Certificate are or were beneficially owned
by a Person who was or became an Acquiring
Person or an Affiliate or an Associate of
an Acquiring Person (as such terms are
defined in the Rights Agreement).
Accordingly, this Right Certificate and the
Rights represented hereby may become null
and void in the circumstances specified in
Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company in the manner
provided in the By-Laws of the Company for Common Stock certificates. The
Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights Agent, issued
and delivered 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.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at one of its offices in Chicago, Illinois (or other place not
inconsistent with the rules of the National Association of Securities
Dealers, Inc. or any stock exchange upon which the Common Stock may then be
listed) books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its
face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates, Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Sections 4(b), 7(e), 14 and 27 hereof, at any
time after the close of business on the Distribution Date, and at or prior
to the close of business on the earlier of the Expiration Date or the Final
Expiration Date, any Right Certificate or Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
7(e) hereof or that have been exchanged pursuant to Section 27 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 shares of Common Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the case may
be) as the Right Certificate or Right Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the corporate trust office
of the Rights Agent for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate contained in the form
of assignment on the reverse side of such Rights Certificate and shall have
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. Thereupon the Rights Agent shall, subject
to Sections 4(b), 7(e) 14 and 27 hereof, countersign and deliver to the
person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
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 owner in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) and Section 27 hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate, with the form
of election to purchase on the reverse side thereof duly executed, to the
Rights Agent at its corporate trust office in Chicago, Illinois, together
with payment of the aggregate Purchase Price with respect to the total
number of shares of Common Stock (or other securities or property, as the
case may be) as to which such surrendered Rights are then exercisable, at or
prior to the close of business on the earlier of (i) May 9, 2007 (the
"Final Expiration Date"), (ii) the date on which the Rights are redeemed as
provided in Section 23, (iii) the time at which Rights are exchanged as
provided in Section 27 hereof, or (iv) the time at which Rights expire
pursuant to Section 13(d) hereof (such earlier date being herein referred to
as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock pursuant
to the exercise of a Right shall initially be $43.00, shall be subject to
adjustment from time to time as provided in Section 11 hereof and shall be
payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment of the Purchase Price per share of Common
Stock (or other shares, securities or property, as the case may be) to be
purchased and an amount equal to any applicable transfer tax in cash, or by
certified check or bank draft payable to the order of the Company, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
requisition from any transfer agent of the Common Stock of the Company
certificates for the total number of shares of Common Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, (ii) if the Company shall have elected to deposit
the total number of shares of Common Stock issuable upon exercise of the
Rights hereunder with a depository agent, requisition from the depository
agent depository receipts representing such number of shares of Common Stock
as are to be purchased (in which case certificates for the shares of Common
Stock represented by such receipts shall be deposited by the transfer agent
with the depository agent) and the Company will direct the depository agent
to comply with such request, (iii) when appropriate, requisition from any
transfer agent of the Common Stock of the Company certificates for the total
number of shares of Common Stock to be paid in accordance with Sections
11(a)(ii),11(a)(iii) and 27, (iv) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14, (v) promptly after receipt of such
certificates or depository receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and
(vi) when appropriate, after receipt promptly deliver such cash to or upon
the order of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue securities, distribute property or
pay cash pursuant to Section 11(a)(iii) hereof, the Company will make all
arrangements necessary so that cash, property or securities are available
for issuance, distribution or payment 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,
any Rights that are or were at any time on or after the earlier of the
Distribution Date or the Shares Acquisition Date beneficially owned by (i)
an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void upon the
occurrence of a Triggering Event and no holder of such Rights shall have any
right with respect to such Rights under any provision of this Agreement from
and after the occurrence of a Triggering Event. 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, Affiliate or transferee thereof whose Rights
would be void pursuant to the preceding sentence; 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, Affiliate or transferee thereof whose Rights would be void
pursuant to the preceding sentence or to any nominee of such Acquiring
Person, Associate, Affiliate or transferee; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence shall be canceled.
The Company shall use all reasonable efforts to insure that the provisions
of this Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights 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.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably
request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this 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 canceled Right Certificates to
the Company, or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Capital Stock.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Common Stock,
the number of shares of Common Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in
this Agreement, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) In the event that the shares of Common Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable 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 shares
reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act of 1933 (the "Act"), with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and (iii) cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the date of the expiration
of the Rights. The Company will also take such action as may be appropriate
under the blue sky laws of the various states. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days, the
exercisability of the Rights in order to prepare and file such registration
statement. Upon 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 and notice to the
Rights Agent at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Right Certificates or of any shares of Common Stock (or Common Stock and/or
other securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required (a) to pay any transfer tax which
may be payable in respect of any transfer involved in the transfer or
delivery of Right Certificates or the issuance or delivery of certificates
for the shares of Common Stock (or Common Stock and/or other securities, as
the case may be) in a name other than that of the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or (b) to issue
or deliver any certificates for a number of shares of Common Stock 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 satisfaction
that no such tax is due.
Section 10. Record Date. Each person in whose name any certificate
for a share of Common Stock (or shares of Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of such
shares of Common Stock (or shares of Common Stock and/or other securities,
as the case may be) represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Common Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company
are closed, such person shall be deemed to have become the record holder of
such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding business day on which the Common Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
shareholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Common Stock
payable in shares of the Common Stock, (B) subdivide the outstanding
Common Stock, (C) combine the outstanding Common Stock into a
smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof,
the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination
or reclassification, and the number and kind of shares of Common
Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate
number and kind of shares of Common Stock or capital stock, as the
case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Common Stock transfer
books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. 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 27, in the event
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the
date of this Agreement, directly or indirectly, (1) shall
merge into the Company or otherwise combine with the Company
(including a "plan of share exchange", as defined in the
Michigan Business Corporation Act), the Company shall be the
continuing or surviving corporation of such merger or
combination, and the Common Stock of the Company shall
remain outstanding, (2) shall, in one or more transactions,
transfer any assets to the Company in exchange (in whole or
in part) for shares of the capital stock of the Company or
for securities exercisable for or convertible into shares of
the capital stock of the Company or otherwise obtain from
the Company, with or without consideration, any additional
shares of the capital stock of the Company or securities
exercisable for or convertible into shares of the capital
stock of the Company (other than as part of a pro rata
distribution to all holders of the Common Stock of the
Company), (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one
transaction or a series of transactions), to, from or with,
as the case may be, the Company or any of the Company's
Subsidiaries, other than incidental to the lines of business
currently engaged in as of the date hereof between the
Company and such Acquiring Person or Associate or Affiliate,
assets having an aggregate fair market value of more than
$63,700,000 other than a transaction set forth in Section
13(a) hereof, (4) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise dispose (in one
transaction or a series of transactions), to, from or with
the Company or any of the Company's Subsidiaries, assets on
terms and conditions less favorable to the Company than the
Company would be able to obtain through arm's-length
negotiation with an unaffiliated third party, other than a
transaction set forth in Section 13(a) hereof, (5) shall
receive any compensation from the Company or any of the
Company's Subsidiaries other than compensation for full-time
employment as a regular employee at rates in accordance with
the Company's (or its Subsidiaries') past practices, or (6)
shall receive a direct or indirect benefit (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantage provided by the Company or
any of its subsidiaries, or
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company
for or pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, shall become an
Acquiring Person, unless the event causing the Person to
become an Acquiring Person is a transaction of the kind set
forth in Section 13(a) hereof, or is an acquisition of
shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock at
a price and on terms determined by a majority of the
Continuing Directors, after receiving advice from one or
more investment banking firms selected by a majority of the
Continuing Directors, to be (1) at a price that is fair to
shareholders (taking into account all factors that the
Continuing Directors deem relevant including, without
limitation, prices that could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed
to realize maximum value) and (2) otherwise in the best
interests of the Company and its shareholders (other than
the Person or any Affiliate or Associate thereof on whose
behalf the offer is being made), or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization or
reorganization of the Company or other transaction or series
of transactions involving the Company which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class
of equity securities of the Company or any of its
Subsidiaries beneficially owned by any Acquiring Person or
any Affiliate or Associate thereof, or
(D) the Board of Directors of the Company (with the
concurrence of a majority of the Outside Directors) shall
declare any Person to be an Adverse Person, upon a
determination that such Person, alone or together with its
Affiliates and Associates, has, at any time after the date
of this Agreement, become the Beneficial Owner of an amount
of Common Stock which the Board of Directors (with the
concurrence of a majority of the Outside Directors)
determines to be substantial (which amount shall in no event
be less than 10% of the shares of Common Stock then
outstanding) and a determination by the Board of Directors
(with the concurrence of a majority of the Outside
Directors), after reasonable inquiry and investigation,
which may include a review of the public record regarding
such Person and any information such directors may request
from such Person and consultation with such Persons as such
directors shall deem appropriate, that (a) such Beneficial
Ownership by such Person is intended to cause the Company to
repurchase the Common Stock beneficially owned by such
Person or to cause pressure on the Company to take action or
enter into a transaction or series of transactions intended
to provide such Person with short-term financial gain under
circumstances where the Board of Directors (with the
concurrence of a majority of the Outside Directors)
determines that the best long-term interests of the Company
and its shareholders would not be served by taking such
action or entering into such transactions or series of
transactions at the time or (b) such Beneficial Ownership is
causing or reasonably likely to cause a material adverse
impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company's
ability to maintain its competitive position) on the
business or prospects of the Company;
then, within five (5) days after the date of the occurrence
of an event described in Section 11(a)(ii)(B) hereof and
promptly following the occurrence of any event described in
Section 11(a)(ii)(A), (C) or (D) hereof, proper provision
shall be made so that each holder of a Right (except as
provided in Section 7(e) hereof) shall thereafter have a
right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, such number of shares of the Common Stock of the
Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then
number of shares of Common Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the
current market price per share of the Common Stock of the
Company (determined pursuant to Section 11(d)) on the date
on which the first of the events listed above in this
subparagraph (ii) occurs (such number of shares are
hereinafter referred to as the "Adjustment Shares").
(iii) In the event that there shall not be sufficient
authorized but unissued Common Stock to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii),
the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon
exercise of the Rights; provided, however, if the Company is unable
to cause the authorization of a sufficient number of additional
shares of Common Stock, then, in the event the Rights become so
exercisable, the Company, with respect to each Right and to the
extent necessary and permitted by applicable law and any agreements
or instruments in effect on the date hereof to which it is a party,
shall, upon the exercise of such Rights, (A) pay cash in an amount
equal to the Purchase Price, in lieu of issuing shares of Common
Stock and requiring payment therefor, or (B) issue debt or equity
securities, or a combination thereof, having a value equal to the
Current Value (as defined hereinafter) of the Common Stock
(including, without limitation, shares, or units of shares, of
common or preferred stock, which may include the Common Stock),
where the value of such securities shall be determined by a
nationally recognized investment banking firm selected by the Board
of Directors of the Company (with the concurrence of a majority of
the Continuing Directors), and require the payment of the Purchase
Price, or (C) deliver any combination of cash, property, Common
Stock and/or other securities having a value equal to the "Current
Value", and require payment of all or any requisite portions of the
Purchase Price. The "Current Value" shall be the product of the
current market price per share of Common Stock (determined pursuant
to Section 11(d) on the date of the occurrence of any of the events
listed above in subparagraph (ii)) multiplied by the number of
shares of Common Stock for which the Right otherwise would be
exercisable if there were sufficient shares available. To the
extent that the Company determines that some action need be taken
pursuant to clauses (A), (B) or (C) of the proviso of this Section
11(a)(iii), a majority of the Continuing Directors may suspend the
exercisability of the Rights for a period of up to 45 days following
the date on which the first of the events listed in Section
11(a)(ii)(A), (B), (C) or (D) shall have occurred, in order to
decide the appropriate form of distribution to be made pursuant to
the above proviso 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.
(b) In the case the Company shall fix a record date for the
issuance of rights or warrants to all holders of Common Stock entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Stock (or shares having the same rights,
privileges and preferences as the shares of Common Stock ("equivalent common
stock") or securities convertible into Common Stock or equivalent common
stock) at a price per share of Common Stock or per share of equivalent
common stock (or having a conversion price per share, if a security
convertible into Common Stock or equivalent common stock) less than the
current market price (as defined in Section 11(d)) per share of Common Stock
on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding on such record
date plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock and/or equivalent common
stock 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 of which the denominator shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock and/or equivalent common stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). 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 (with the concurrence of a majority
of the Continuing Directors), whose determination shall be described in a
statement filed with the Rights Agent. Shares of Common Stock owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights 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 has not
been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness or
assets (other than a regular periodic cash dividend at a rate not in excess
of 125% of the rate of the last cash dividend theretofore paid or a dividend
payable in Common Stock, but including any dividend payable in stock other
than Common Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, of which the numerator
shall be the current market price (as defined in Section 11(d)) per share of
Common Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company (with the concurrence
of a majority of the Continuing Directors), 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 share of Common Stock and
of which the denominator shall be such current market price per share of
Common Stock. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(d) For the purpose of any computation under Section 11(b) or
(c) hereof, the "current market price" per, or value of a, share of the
Common Stock on any date of determination shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date, and for the purpose of any computation in Section
11(a)(ii) and Section 13, the "current market price" per, or "value" of a,
share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for 20 consecutive
Trading Days immediately following such date; provided, however, that in the
event that the current market price (or value) per share of the Common Stock
is determined during the period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities convertible into shares
of such Common Stock, or (B) any sub-division, combination or
reclassification of such Common Stock, and prior to the expiration of 30
Trading Days or 20 Trading Days, as the case may be, after the ex-dividend
date for such dividend or distribution, or the record date for such sub-
division, combination or reclassification, then, and in each such case, the
"current market price" or "value" shall be appropriately adjusted to take
into account ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the shares of the Common Stock are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of the Common Stock are listed or admitted to trading or, if the
shares of the Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted sale 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 Nasdaq Stock Market or such other system
then in use, or, if on any such date the shares of the Common Stock are not
quoted by such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the fair value
of such shares on such date shall be as determined in good faith by the
Continuing Directors if the Continuing Directors constitute a majority of
the Board of Directors or in the event the Continuing Directors do not
constitute a majority of the Board of Directors, by an independent
investment banking firm selected by the Board of Directors. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the shares of the
Common Stock are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on
which banking institutions in the State of Illinois are not authorized or
obligated by law or executive order to close. If the Common Stock is not
publicly held or not so listed or traded, "current market price" per share
shall mean the fair value per share as determined in good faith by the
Continuing Directors of the Company if the Continuing Directors constitute a
majority of the Board of Directors or in the event the Continuing Directors
do not constitute a majority of the Board of Directors by an independent
investment banking firm selected by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
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 mandates such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Common Stock,
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 Stock contained in Section 11(a) through (p), inclusive, and
the provisions of Sections 7, 9, 10, 13, 14 and 27 with respect to the
Common Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of Common
Stock purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in 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 adjusted Purchase Price,
that number of shares of Common Stock (calculated to the nearest one
millionth) obtained by (i) multiplying (x) the number of 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) 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 shares of Common Stock 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 shares of
Common Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest ten thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after the 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 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 Right Certificates on
such record date Right Certificates evidencing, subject to Section 14, 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 may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of a share of
Common Stock issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable shares of such Common Stock at such adjusted Purchase Price.
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record
date the number of shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the number of shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company, acting by resolution of its Board of Directors (which
resolution shall be effective only with the concurrence of a majority of the
Continuing Directors), 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
Common Stock, issuance wholly for cash of any of the shares of Common Stock
at less than the current market price, issuance wholly for cash of the
Common Stock or securities which by their terms are convertible into or
exchangeable for Common Stock, stock dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter
made by the Company to holders of its Common Stock shall not be taxable to
such shareholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23 and 26
hereof, take (nor will it permit any of its Subsidiaries to take) any action
if at the time such is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights, unless such action is approved by a majority of
the Continuing Directors and the Continuing Directors constitute a majority
of the Board of Directors.
(o) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer (or permit any of its subsidiaries to sell
or transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person if (x) at the time
of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation, merger or
sale, the shareholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates. The Company shall not consummate any
consolidation, merger, sale or transfer unless prior thereto the Company and
such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(o).
Consolidation and merger as used in this Section 11(o) shall include other
forms of business combinations, including a "plan of share exchange", as
such term is used in the Michigan Business Corporation Act.
(p) The failure by the Board of Directors (with the concurrence of
a majority of the Outside Directors) to declare a Person to be an Adverse
Person following such Person becoming the Beneficial Owner of 10% or more of
the outstanding Common Stock shall not imply that such Person is not an
Adverse Person or limit the Board of Directors' right at any time in the
future to declare such Person to be an Adverse Person.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 and 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Common Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
therein contained. Notwithstanding the foregoing sentence, the failure of
the Company to make such certificate or give such notice shall not affect
the validity or the force or effect of the requirement for such adjustment.
Any adjustment to be made pursuant to Sections 11 and 13 shall be effective
as of the date of the event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Distribution Date,
directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any Person
shall consolidate, merge with and into the Company, the Company shall be the
continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Stock 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 (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person, then, and in each such
case, proper provision shall be made so that (i) each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have the right
to receive, upon the exercise thereof at the then-current Purchase Price in
accordance with the terms of this Agreement, such number of shares of
validly issued, fully paid, non-assessable and freely tradable Common Stock
of the Principal Party (as hereinafter defined), not subject to any rights
of call or first refusal, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the then number of shares of
Common Stock for which a Right is then exercisable and dividing that product
by (2) 50% of the current market price per share of the Common Stock of such
Principal Party (determined in the manner described in Section 11(d)) on the
date of consummation of such consolidation, merger, sale or transfer; (ii)
the Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock in accordance with Section 9) in connection
with such consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to the shares of its Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any of the
transactions described in Section 13(a) hereof.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), (A) the Person
that is the issuer of any securities into which shares of Common
Stock of the Company are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer of the Common
Stock of which has the greatest aggregate market value, or (B) if no
securities are so issued, (1) the Person that survives such
consolidation or is the other party to the merger and survives such
merger, or, if there is more than one such Person, the Person the
Common Stock of which has the greatest aggregate market value or (2)
if the Person that is the other party to the merger does not survive
the merger, the Person that does survive the merger (including the
Company if it survives); and
(ii) in the case of any transaction described in clause
(z) of the first sentence 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, or, if
each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so
transferred, or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, the Person the Common
Stock of which has the greatest aggregate market value;
provided, however, that in any such case, (x) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
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
Stock of which is and has been so registered, "Principal Party" shall refer
to such other Person; (y) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of all of which are
and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest market
value of shares held by the public, and (z) in case such Person is owned,
directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules
set forth in (x) and (y) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal
Parties in each such chain shall bear the obligations set forth in this
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer 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) and (b) of
this Section 13 and further providing that, as soon as practicable after the
date of any consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the
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, will use its best efforts to cause such
registration statement to become effective as soon as practicable
after such filing and will use its best efforts to cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the date of
expiration of the Rights; and
(ii) will 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 or consolidations or sales or other transfers. In the event that
one of the transactions described in Section 13(a) hereof shall occur at any
time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender or exchange offer for all outstanding shares of Common
Stock which complies with the provisions of Section 11(a)(ii)(B) hereof (or
a wholly owned Subsidiary of any such Person or Persons), (ii) the price per
share of Common Stock offered in such transaction is not less than the price
per share of Common Stock paid to all holders of shares of Common Stock
whose shares were purchased pursuant to such tender or exchange offer and
(iii) the form of consideration being offered to the remaining holders of
shares of Common Stock pursuant to such transaction is the same as the form
of consideration paid pursuant to such tender or exchange offer. Upon
consummation of any transaction contemplated by this Section 13(d), all
Rights hereunder shall expire.
(e) The terms "consolidation" and "merger" as used in this
Section 13 shall include other forms of business combinations, including a
"plan of share exchange", as such term is used in the Michigan Business
Corporation Act.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. 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 New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the Rights are listed
or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices in the over-
the-counter market, as reported by the Nasdaq Stock Market 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 (with the concurrence of a
majority of the Continuing Directors). 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
(with the concurrence of a majority of the Continuing Directors) shall be
used.
(b) The Company shall not be required to issue fractions of
shares upon exercise of the Rights or to distribute certificates which
evidence fractional shares. In lieu of fractional shares of Common Stock,
the Company may pay to the registered holders of Right Certificates at the
time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the current market value of one share of
Common Stock (as determined pursuant to Section 11(d)(ii)) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights 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 share of
Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), 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 Stock), 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 and subject to the limitations set forth in such Right
Certificates and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be evidenced
by the certificates for shares of the Common Stock and will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the corporate trust office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate
forms and certificates fully executed; and
(c) subject to Sections 6(a), 7(e) and 7(f) hereof, 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 Stock
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 Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the
last sentence of Section 7(e) hereof, shall be required to be affected by
any notice to the contrary.
(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 of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided, however, the
Company must use its reasonable best efforts to have any such order, decree
or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Common Stock 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 24), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without 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.
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 Stock 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.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation, succeeding to
the corporate trust 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. 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 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 the Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been countersigned,
the Rights Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with the legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one of
the Chairman of the Board, the President, any Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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 execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Sections 11 or 13 or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual notice of
any such adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
shares of the Common Stock to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of the Common Stock 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 President, any Vice-President, the
Secretary or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money on commercial terms to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting
with, and receiving written instructions from, the Company. Subject to the
preceding sentence, the Rights Agent shall not be required to determine
whether any Right Certificate issued pursuant to this Agreement is required
pursuant to Section 4(b) to contain the legend specified in Section 4(b).
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock 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 Stock 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 corporation
organized and doing business under the laws of the United States or under
any state thereof, in good standing under the laws of its jurisdiction of
incorporation, which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by federal or
state authority or which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50 million. After appointment,
the successor Rights Agent shall be vested with the same powers, rights,
duties and 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 Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of 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 per share 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.
In addition, in connection with the issuance or sale of shares of Common
Stock following the Distribution Date and prior to the redemption, exchange
or expiration of the Rights, the Company may, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, or in any other
case, if deemed necessary or appropriate by the Board of Directors of the
Company (with the concurrence of a majority of the Continuing Directors),
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Right Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the Person to
whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to 5:00 P.M., Detroit time, on the
earlier of (x) the tenth Business Day following the Shares Acquisition Date,
or (y) the Final Expiration Date or (z) the day on which a determination is
made by the Board of Directors that any Person is an Adverse Person pursuant
to Section 11(a)(ii)(D), redeem all but not less than all of the then
outstanding Rights at a redemption price of $.005 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"); provided, however, that if such
redemption occurs on or after the Shares Acquisition Date, the Board of
Directors of the Company shall be entitled to so redeem the Rights only if
Continuing Directors constitute a majority of the Board of Directors at the
time of such redemption and such redemption is approved by a majority of the
Continuing Directors; provided, further, that if such redemption occurs on
or after the date of a change (resulting from a proxy or consent
solicitation effected in compliance with applicable law and the requirements
of the Nasdaq Stock Market or any national securities exchange on which the
Common Stock of the Company is listed) in a majority of the directors in
office at the commencement of such solicitation if any Person who is a
participant in such solicitation has stated (or, if upon the commencement of
such solicitation, a majority of the Board of Directors has determined in
good faith) that such Person (or any of its Affiliates or Associates)
intends to take, or may consider taking, any action which would result in
such Person becoming an Acquiring Person or which would cause the occurrence
of a Triggering Event, the Board of Directors of the Company shall be
entitled to so redeem the Rights only if Continuing Directors who were
members of the Board of Directors prior to the proxy or consent solicitation
referred to above (or subsequently became members of the Board of Directors
and whose nomination for election or election thereto was recommended or
approved by a majority of such Continuing Directors) (the "Redemption
Continuing Directors") constitute a majority of the Board of Directors at
the time of such redemption and such redemption is approved by a majority of
the Redemption Continuing Directors; provided, further, however, that if,
following the occurrence of the Shares Acquisition Date and following the
expiration of the right of redemption hereunder but prior to any Triggering
Event, each of the following shall have occurred and remain in effect: (i) a
Person who is an Acquiring Person shall have transferred or otherwise
disposed of a number of shares of Common Stock in a transaction, or series
of transactions, which did not result in the occurrence of a Triggering
Event such that such Person is thereafter a Beneficial Owner of 10% or less
of the outstanding shares of Common Stock, (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i),
who are Acquiring Persons, and (iii) the transfer or other disposition
described in clause (i) above was other than pursuant to a transaction, or
series of transactions, which directly or indirectly involved the Company or
any of its Subsidiaries; then the right of redemption shall be reinstated
and thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable pursuant to Section 11(a)(ii) or Section
13(a) prior to the expiration of the Company's right of redemption pursuant
to this Section 23(a) without regard to the last proviso.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, 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 action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption
to the holders of the then outstanding Rights by mailing such notice to all
such holders at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Stock. 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, and other than in
connection with the repurchase of Common Stock prior to the Distribution
Date.
Section 24. Notice of Certain Events. In case the Company shall
propose at any time following the Distribution Date (a) to pay any dividend
payable in stock of any class to the holders of Common Stock or to make any
other distribution to the holders of Common Stock (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the
last cash dividend theretofore paid), or (b) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (c) to effect any reclassification
of its Common Stock (other than a reclassification involving only the
subdivision of outstanding Common Stock), or (d) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, or (e) 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, in accordance with Section 25, a notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend,
distribution of rights or Rights, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by
clause (a) or (b) above at least twenty days prior to the record date for
determining holders of the Common Stock for purposes of such action, and in
the case of any such other action, at least twenty days prior to the date of
the taking of such proposed action or the date of participation therein by
the holders of the Common Stock, whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) or Section
13(a) of this Agreement shall occur, then, in any such case, the Company
shall as soon as practicable thereafter give to each holder of a Right, in
accordance with Section 25, a notice of the occurrence of such event, which
shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) or Section 13(a), as the case may be.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Xxxxxxx Industries, Inc.
00000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxx
Subject to the provisions of Section 21, 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:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on
the registry books of the Company.
Section 26. Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or
(iii) prior to the Distribution Date, to change or supplement the provisions
hereunder which the Company may deem necessary or desirable and in the best
interests of the holders of the Rights or (iv) following the Distribution
Date, to change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which shall not materially
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, however, that this Agreement shall not be supplemented or
amended in any way (other than pursuant to clauses (i) and (ii) above)
unless such amendment is approved by a majority of the Continuing Directors,
whose determination shall be final, and the Continuing Directors constitute
a majority of the Board of Directors. 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 26,
the Rights Agent shall execute such supplement or amendment unless the
Rights Agent shall have determined in good faith that such supplement or
amendment would adversely affect its interests under this Agreement. Prior
to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
Section 27. Exchange. (a) The Board of Directors of the Company
(with the concurrence of a majority of the Continuing Directors) 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
7(e) hereof) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio, as it may from time to time be so adjusted, being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or
of any Subsidiary of the Company or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the shares of Common Stock
then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection (a) of this
Section 27 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 shares of Common
Stock 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 shares of Common Stock 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 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 27, the Company shall take all
such action as may be necessary to authorize additional shares of Common
Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this paragraph
(d), the current market value of a whole share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 27.
Section 28.Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29.Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made
in accordance with the provisions of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board of Directors of the
Company (and, where specifically provided for herein, the Continuing
Directors) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board, or the Company (or, as expressly provided, the Continuing Directors),
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations
(including, for purposes of clause (ii) below, all omissions with respect to
the foregoing) which are done or made by the Board (or, as provided for, by
the Continuing Directors) in good faith, shall (i) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Right
Certificates and all other parties, and (ii) not subject the Board or the
Continuing Directors to any liability to the holders of the Rights
Certificates.
Section 30. 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 Stock) 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.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of
such determination by the Board of Directors.
Section 32. 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 Michigan and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed all as of the day and year first above written.
XXXXXXX INDUSTRIES, INC.
By: /s/ Xxx X. Xxxxxxx
Title: President and Chief Executive
Officer
XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxx Xxxxxxx
Title: Vice President
EXHIBIT A
[Form of Right Certificate]
Certificate No. R _____ ______ Rights
NOT EXERCISABLE AFTER MAY 9, 2007 OR EARLIER IF NOTICE OF REDEMPTION OR
EXCHANGE IS GIVEN OR UPON THE CONSUMMATION OF CERTAIN OTHER TRANSACTIONS
SPECIFIED IN SECTION 13(d) OF THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.005 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Right Certificate
XXXXXXX INDUSTRIES, INC.
This certifies that ________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement dated as of February 28, 1997 (the "Rights
Agreement") between Xxxxxxx Industries, Inc., a Michigan corporation (the
"Company"), and Xxxxxx Trust and Savings Bank (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M. (Detroit,
Michigan time) on May 9, 2007 at the office of the Rights Agent, or its
successors as Rights Agent, in Chicago, Illinois, one fully paid non-
assessable share of the Common Stock, $1.00 par value (the "Common Stock"),
of the Company, at a purchase price of $43.00 per share (the
"Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the
number of shares which may be purchased upon exercise thereof)
set forth above, and the Purchase Price per share set forth above,
are the number and Purchase Price as of February 28, 1997 based
on the Common Stock of the Company as constituted at such date.
_____________
* The portion of the legend in brackets shall be inserted only
if applicable.
Upon the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Common Stock or other
securities 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.
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
above-mentioned office 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 shares of Common
Stock 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 may be redeemed by the
Company at its option at a redemption price of $.005 per Right or
may be called for exchange for newly issued shares of Common
Stock.
No fractional shares of Common Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of a share of Common Stock
which may, at the election of the Company, be evidenced by
depository receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of
the Common Stock or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders
at any meeting thereof, or to give or withhold consent to any
corporate action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of
__________________.
ATTEST: XXXXXXX INDUSTRIES, INC.
By:
______________________________
Secretary
Title:
Countersigned:
By ________________________________
Authorized Signature
[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 Certificates.)
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:
-----------------------------
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being sold, assigned and transferred by or on
behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ------------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights represented
by the Right Certificate.)
To Xxxxxxx Industries, Inc.:
The undersigned hereby irrevocably elects to exercise ---
Rights represented by this Right Certificate to purchase the shares
of the Common Stock (or, in certain circumstances, a combination
of cash, other property, Common Stock, and/or other securities)
upon the exercise of such Rights and requests that certificates for
such 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 must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
----------------------------------------
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: -------------------------------
Signature
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On February 24, 1997, the Board of Directors of Xxxxxxx
Industries, Inc. (the "Company") declared a dividend distribution
of one Right for each outstanding share of Common Stock, $1.00
par value (the "Common Stock"), of the Company. The
distribution was payable on May 12, 1997 to the Company's
shareholders of record at the close of business on May 9, 1997.
Each Right entitles the registered holder to purchase from the
Company one share of Common Stock at a price of $43.00 per
share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and
Xxxxxx Trust and Savings Bank, as Rights Agent (the "Rights
Agent").
Until the earliest to occur of (i) the tenth business day
following the first public announcement that a person or group of
affiliated or associated persons acquire, or obtained the right to
acquire, beneficial ownership or 20% or more of the outstanding
shares of the Common Stock (an "Acquiring Person"), (ii) such
date as a majority of the "Continuing Directors" (as defined in the
Rights Agreement) may fix following the commencement or
announcement of an intention to commence a tender offer or
exchange offer by any person (other than the Company) if, upon
consummation, such person would be an Acquiring Person, or (iii)
the tenth Business Day after the date the Board of Directors
determines that the holder of 10% or more of the outstanding
Common Stock is an "Adverse Person" (the earliest of such dates
being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding
as of the close of business on May 9, 1997, by such Common
Stock certificates. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only
with the Common Stock. Until the Distribution Date (or earlier
redemption, exchange or expiration of the Rights), the surrender
for transfer of any of the Common Stock certificates outstanding
as of May 9, 1997 will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Stock as of the close
of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. Subject to certain
adjustments as may be required by the Rights Agreement, the
Company will issue one Right with each new share of Common
Stock issued until the Distribution Date so that all shares will have
attached Rights.
The Rights are not exercisable until the Distribution Date
and, if later, the expiration of the Company's right to redeem the
Rights. The Rights will expire on May 9, 2007, unless earlier
redeemed or called for exchange by the Company as described
below or their earlier expiration upon the consummation of certain
transactions as described below.
The Purchase Price payable, and the number of shares of
Common Stock 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 Stock;
(ii) upon the grant to holders of the Common Stock of certain
rights or warrants to subscribe for shares of the Common Stock
or convertible securities at less than the current market price of
the Common Stock; or (iii) upon the distribution to holders of the
Common Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends out of earnings or retained
earnings at a rate not in excess of 125% of the rate of the last
cash dividend theretofore paid or a dividend paid in the Common
Stock) or of subscription rights or warrants (other than those
referred to above). With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. The
Company shall not be required to issue fractions of shares of
Common Stock and, in lieu thereof, an adjustment in cash will be
made equal to the same fraction of the current market value of
one share of Common Stock.
Subject to the Board's right to exchange shares of
Common Stock for Rights described below, in the event that (i) an
Acquiring Person merges into the Company or engages in one of a
number of self-dealing transactions specified in the Rights
Agreement; or (ii) in certain circumstances, any Person becomes
an Acquiring Person (except pursuant to a tender or exchange
offer for all outstanding shares of Common Stock at a price and
on terms determined by a majority of the "Continuing Directors",
after receiving advice from an investment banking firm selected
by a majority of the "Continuing Directors", to be fair and
otherwise in the best interests of the Company and its shareholders
(a "Permitted Offer")); or (iii) at any time when there is an
Acquiring Person, the Company engages in a recapitalization,
reclassification, reorganization or similar transaction which
increases the Acquiring Person's proportionate ownership of the
Company by more than 1%; or (iv) the Board of Directors (with
the concurrence of a majority of the "Outside Directors") declares
any person beneficially owning at least 10% of the Common
Stock to be an "Adverse Person", then proper provision shall be
made so that each holder of a Right, other than Rights that were
or are beneficially owned by the Acquiring Person (which will
thereafter be void), shall thereafter have the right to receive upon
exercise that number of shares of Common Stock having a market
value of two times the exercise price of the Right. Following the
Distribution Date, in the event (i) that the Company is acquired in
a merger or other business combination transaction in which it is
not the surviving corporation or in connection with which all or a
part of the Common Stock shall be changed into or exchanged for
stock or other securities of any other person or cash or any other
property (other than certain mergers and other business
combinations with an Acquiring Person who becomes such in a
Permitted Offer if the price per share of Common Stock offered in
such transaction is no less than the price per share of Common
Stock paid to all holders in the Permitted Offer and the form of
consideration being offered in such transaction is the same as the
form of consideration paid in the Permitted Offer (a "Permitted
Combination")); or (ii) that 50% or more of the Company's assets
or earning power were sold, then proper provision shall be made
so that each holder of a Right, other than Rights that were or are
beneficially owned by the Acquiring Person (which will thereafter
be void), shall thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the Acquiring Person which
at the time of such transaction would have a market value of two
times the exercise price of the Right. Each of the events
described in this paragraph constitutes a "Triggering Event" under
the Rights Agreement.
At any time after any Person becomes an Acquiring Person
but prior to the time such Acquiring Person has acquired 50% or
more of the outstanding Common Stock, the Board (with the
concurrence of a majority of the "Continuing Directors") may
cause holders of Rights to exchange all or part of their Rights for
shares of Common Stock at a ratio of one share of Common Stock
per Right, subject to adjustment. As soon as the Board has
determined to make such exchange, the Rights may no longer be
exercised.
At any time prior to 5:00 p.m., Detroit time, on the earliest
of (i) the tenth Business Day following the date of the first public
announcement that a person or group of affiliated or associated
persons has acquired beneficial ownership of 20% or more of the
outstanding shares of the Common Stock of the Company (the
"Shares Acquisition Date"), (ii) May 9, 2007 or (iii) the day on
which a determination is made by the Board of Directors that any
person is an Adverse Person, the Board of Directors may redeem
the Rights in whole, but not in part, at a price of $.005 per Right
(the "Redemption Price"), subject to the following exceptions.
First, if such redemption occurs on or after the Shares Acquisition
Date, the Board shall be entitled to so redeem the Rights only if
such redemption is approved by a majority of the "Continuing
Directors" and the "Continuing Directors" constitute a majority of
the Board of Directors. Second, if such redemption occurs on or
after the date of a change (resulting from a proxy or consent
solicitation effected in compliance with applicable law and the
requirements of any national securities exchange on which the
Common Stock of the Company is then listed) in a majority of the
directors in office at the commencement of such solicitation if any
person who is a participant in such solicitation has stated (or, if
upon the commencement of such solicitation, a majority of the
Board of Directors has determined in good faith) that such person
intends to take, or may consider taking, any action which would
result in such person becoming an Acquiring Person or which
would cause the occurrence of a Triggering Event, the Board shall
be entitled to redeem the Rights only if such redemption is
approved by a majority of the "Continuing Directors" who were
members of the Board of Directors prior to the solicitation and
such directors constitute a majority of the Board. Thereafter, the
Company's right of redemption may be reinstated, prior to a
Triggering Event, (i) if an Acquiring Person reduces its beneficial
ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the
Company; and (ii) there are no other persons, immediately
following the event described in clause (i), who are Acquiring
Persons. Immediately upon the action of the Board of Directors
of the Company electing to redeem the Rights, the Company shall
make announcement thereof, and upon such election, the right to
exercise the Rights will terminate and the only right of the holders
of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
The provisions of the Rights Agreement may be amended
by the Board of Directors in order to cure any ambiguity or
correct any defect or inconsistency and by the Continuing
Directors, prior to the Distribution Date, to make changes deemed
to be in the best interests of the holders of the Rights or, after the
Distribution Date, to make such other changes which do not
materially adversely affect the interests of the holders of the
Rights (excluding the interests of any Acquiring Person and its
affiliates and associates).
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a Current
Report on Form 8-K. A copy of the Rights Agreement is
available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
