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THE GOODYEAR TIRE & RUBBER COMPANY
and
MANUFACTURERS HANOVER TRUST COMPANY, Rights Agent
RIGHTS AGREEMENT
Dated as of
July 2, 1986
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TABLE OF CONTENTS
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RIGHTS AGREEMENT
Section 1. Certain Definitions.......................................... 2
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............................ 13
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates,
Mutilated, Destroyed, Lost or
Stolen Right Certificates.................................... 14
Section 7. Exercise of Rights; Purchase
Price; Expiration Date of Rights............................. 16
Section 8. Cancellation and Destruction of
Right Certificates........................................... 21
Section 9. Reservation and Availability of
Shares of Capital Stock...................................... 21
Section 10. Preferred Stock Record Date.................................. 24
Section 11. Adjustment of Purchase Price,
Number of Shares or Number of
Rights....................................................... 26
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares.................................... 47
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning
Power........................................................ 48
Section 14. Fractional Rights and Fractional
Shares....................................................... 53
Section 15. Rights of Action............................................. 55
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Section 16. Agreement of Right Holders................................... 56
Section 17. Right Certificate Holder Not
Deemed a Shareholder......................................... 58
Section 18. Concerning the Rights Agent.................................. 58
Section 19. Merger or Consolidation or Change
of Name of Rights Agent...................................... 59
Section 20. Duties of Rights Agent....................................... 61
Section 21. Change of Rights Agent....................................... 66
Section 22. Issuance of New Right
Certificates................................................. 68
Section 23. Redemption................................................... 68
Section 24. Notice of Certain Events..................................... 71
Section 25. Notices...................................................... 73
Section 26. Supplements and Amendments................................... 74
Section 27. Successors................................................... 75
Section 28. Determinations and Actions by the
Board of Directors, etc...................................... 75
Section 29. Benefits of this Agreement................................... 76
Section 30. Severability................................................. 77
Section 31. Governing Law................................................ 77
Section 32. Counterparts................................................. 78
Section 33. Descriptive Headings......................................... 78
Exhibit A - Form of Articles of Amendment................................ A-1
Exhibit B - Form of Right Certificate.................................... B-1
- Form of Assignment............................................... B-6
- Certificate...................................................... B-7
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- Notice........................................................... B-7
- Form of Election to Purchase..................................... B-8
- Certificate...................................................... B-9
- Notice........................................................... B-9
Exhibit C - Summary of Rights to Purchase
Preferred Stock.............................................. C-1
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RIGHTS AGREEMENT
This Agreement, dated as of July 2, 1986, between The Goodyear Tire &
Rubber Company, an Ohio corporation (the "Company"), and Manufacturers Hanover
Trust Company, a national banking association (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, without par value, of the Company
outstanding on July 28, 1986 (the "Record Date") and has authorized the issuance
of one Right in respect of each share of Common Stock of the Company issued
between the Record Date 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 one-hundredth of a share of Series A $10.00 Preferred Stock of
the Company having the rights, powers and preferences set forth in the Articles
of Amendment attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
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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 and
Associates (as such terms are 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, 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 or any subsidiary of the Company for or pursuant to the terms of
any such plan.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
as in effect on the date hereof.
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(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person, or any of such Person's Affiliates or
Associates, beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, 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 offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase, (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
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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
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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 (c)) or disposing of any
securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of Ohio are authorized
or obligated by law or executive order to close.
(e) "close of business" on any given date shall mean 5:00 P.M., Akron
time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., Akron time, on the next succeeding Business
Day.
(f) "Common Stock" when used with reference to the Company shall mean
the Common Stock, without 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.
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(g) "Continuing Director" shall mean any individual who is a member
of the Board of Directors of the Company, while such individual 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.
(h) "Person" shall mean any individual, firm, corporation or other
entity.
(i) "Preferred Stock" shall mean shares of Series A $10.00 Preferred
Stock, without par value, of the Company.
(j) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
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(k) "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.
(l) "Triggering Event" shall mean any event described in Section
11(a)(ii)(A), (B) or (C) or Section 13(a).
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of
(i) the tenth calendar day after the Shares Acquisition Date or (ii) the tenth
calendar day after the date of the commencement of, or first public announcement
of the intent to commence, by any Person (other than the Company, any subsidiary
of the Company, any employee benefit plan of the Company or of any subsidiary of
the Company or any Person or entity organized, appointed or established by the
Company or any subsidiary of the Company for or pursuant to the terms of any
such plan), a tender or exchange offer if, upon
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consummation thereof, such Person would be an Acquiring Person (including any
such date which is after the date of this Agreement and prior to the issuance of
the Rights; the earlier of the dates in subsections (i) and (ii) hereof being
herein referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates for the Common Stock also shall be deemed to be
Right Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of the Common Stock. As soon as practicable after the Distribution
Date, the Rights Agent will send, by first-class, insured, 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 B 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 the Record Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights
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to Purchase Preferred Stock, in substantially the form attached hereto as
Exhibit C (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 the Record
Date, at the address of such holder shown on the records of the Company. With
respect to certificates for the Common Stock outstanding as of the Record Date,
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
with a copy of the Summary of Rights attached thereto. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any of the certificates for the Common Stock outstanding on the
Record Date, even without a copy of the Summary of Rights attached thereto,
shall also constitute the surrender for 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 the Record Date 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:
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This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between The Goodyear Tire &
Rubber Company and Manufacturers Hanover Trust Company, Rights Agent, dated
as of July 2, 1986 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of The Goodyear Tire & Rubber Company. 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. The Goodyear Tire & Rubber Company 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.
Until the Distribution Date, the Rights associated with the Common Stock
represented by certificates containing the foregoing legend shall be evidenced
by such certificates alone, and the surrender for transfer of any of such
certificates shall also constitute the surrender for transfer of the Rights
associated with the Common Stock represented by such certificate.
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 B hereto and may
have such marks of identification or designation and such
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legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 22 hereof, the Right Certificates,
whenever issued, shall be dated as of the Record Date, and on their face shall
entitle the holders thereof to purchase such number of shares of the Preferred
Stock (or following a Triggering Event, Common Stock, other securities, cash or
other assets as the case may be) 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 or Section 22 hereof that represents
Rights beneficially owned by (i) an Acquiring Person or any Associate or
Affiliate thereof, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
became such, or (iii) a transferee of an
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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
end:
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.
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Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company in the manner provided in the Code of
Regulations 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 New York, New York, books for registration
and transfer of the Right Certificates issued hereunder. Such books shall show
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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 Section 4(b), Section 7(e) and Section 14 hereof, at any
time after the close of business on the Distribution Date, and at or prior to
the close of business on the earlier of the Expiration Date or the Final
Expiration Date, any Right Certificate or Certificates may be transferred, split
up, combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a share of Preferred 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,
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combined or exchanged at the principal 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 Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and 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 Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The 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
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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) 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 office at
000 Xxxx 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, together with payment of the
aggregate Purchase Price with respect to the total number of one one-hundredths
of a share of Preferred 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) July 28, 1996 (the "Final Expiration
Date"), or (ii) the date on which the Rights are redeemed as provided in Section
23 (such earlier date being herein referred to as the "Expiration Date").
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(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $100,
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 one one-hundredth of a share of
Preferred 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 Preferred Stock of the Company certificates for
the total number of one one-hundredths of a share of Preferred 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 Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts
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representing such number of one one-hundredths of a share of Preferred Stock as
are to be purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company will direct the depositary 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 Section 11(a)(ii) and 11(a)(iii),
(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 depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (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.
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(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
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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. 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 Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(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 Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
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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 cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
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 Preferred Stock (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock or its authorized and issued
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Common Stock held in its treasury and/or other securities), the number of shares
of Preferred 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) So long as the shares of Preferred 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
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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 one one-hundredths of a share of
Preferred 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
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transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any one one-hundredths of a share of
Preferred 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 one one-hundredths of a share of Preferred 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 one
one-hundredths of a share of Preferred 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. Preferred Stock Record Date. Each person in whose name
any certificate for a number of one one-hundredths of a share of Preferred
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
29
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have become the holder of record of such fractional shares of Preferred 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
Preferred 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
Preferred 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.
30
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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 Preferred Stock payable in
shares of the Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number of
shares or (D) issue any shares of its capital stock in a reclassification
of the Preferred 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
Preferred 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
31
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of shares of Preferred 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 Preferred 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 ll(a)(ii).
(ii) 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, 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
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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 $10,000,000, 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
33
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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 shareholder), 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 or any subsidiary of the
Company for or pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, shall become the
Beneficial Owner of 35% or more of the shares of Common Stock then
outstanding (except pursuant to an offer for all outstanding
34
-30-
shares of Common Stock at a price and upon such terms and conditions
as a majority of the Continuing Directors determine to be 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)) providing the Continuing Directors constitute a majority
of the Board of Directors, or
(C) during such time as there is an Acquiring Person, (1) there
shall be any failure to declare and pay at the regular date therefor
any full quarterly dividends (whether or not cumulative) on any
outstanding preferred stock of the Company (except to the extent such
declaration or payment would be prohibited under the laws of the
Company's jurisdiction of incorporation), (2) there shall be any
reduction in the annual rate of dividends paid on the Common Stock
(except to reflect any subdivision of the Common Stock or as required
under the laws of the Company's jurisdiction of incorporation or as
approved by a majority of the Continuing Directors and the Continuing
Directors constitute a majority of the Board of Directors or by the
holders of 66 2/3%
35
-31-
percent or more of the then outstanding shares of Common Stock
beneficially owned by Persons other than the Acquiring Person or its
Affiliates or Associates), (3) there shall be a failure to increase
the annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has
the effect of reducing the number of outstanding shares of the Common
Stock (except to the extent such increase in the rate of dividends
would be prohibited under the laws of the Company's jurisdiction of
incorporation), or (4) there shall be any reclassification of
securities (including any reverse stock split), or recapitalization
of the Company, or any merger or consolidation of the Company with
any of its subsidiaries or any other transaction or series of
transactions to which the Company or any of its subsidiaries is a
party (whether or not with or into or otherwise involving an
Acquiring Person) 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 or convertible securities of the
Company or any of its subsidiaries which is directly or
36
-32-
indirectly owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person,
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) or (C) 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, in
lieu of shares of Preferred Stock, 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 one one-hundredths of a share of
Preferred 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"). For the purposes of
this Section "subsidiaries" shall mean any corporations or other entities of
which a majority of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by the Company.
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(iii) In the event that the number of shares of Common Stock which are
authorized by the Company's Amended Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the Company
shall (A) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, then the
Company, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shall be obligated to deliver uniformly on a
pro rata basis to all outstanding Rights shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. To the extent that any legal
or contractual restrictions prevent the Company from paying the full amount
of cash payable in accordance with the foregoing sentence, the Company
shall pay to holders of the Rights as to which such payments are being made
all amounts which are not then restricted uniformly on a pro rata basis.
The Company shall continue to make payments on a pro rata basis as funds
become available until such payments have been paid in full.
38
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(b) In the case the Company shall fix a record date for the issuance
of rights or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent preferred stock") or
securities convertible into Preferred Stock or equivalent preferred stock) at a
price per share of Preferred Stock or per share of equivalent preferred stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the current market
price (as defined in Section 11(d)) per share of Preferred 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 Preferred Stock outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred Stock and/or equivalent Preferred 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 Preferred Stock
39
-35-
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or equivalent Preferred 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, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred 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 Preferred 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
40
-36-
a dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred 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
Preferred Stock on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of Preferred Stock and
of which the denominator shall be such current market price per share of
Preferred 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) (i) For the purpose of any computation under Section 11(b) or (c)
hereof, the "current market price"
41
-37-
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; 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, after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current 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
42
-38-
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 price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such
other system then in use, or, if on any such date the 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
43
-39-
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 Ohio 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.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of Preferred Stock
44
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shall be determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the current market price per share of Preferred Stock cannot
be determined in the manner provided above or if the Preferred Stock is not
publicly held or listed or traded in a manner described in clause (i) of
this Section 11(d), the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the current market price
per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current market
price" per share of the Preferred Stock shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. For all purposes of this
Agreement, the "current market price" of one one-hundredth of a share of
Preferred Stock shall be equal to the "current market price" of one share
of Preferred Stock divided by 100.
45
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(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 Preferred 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
Preferred Stock contained in Section 11(a) through (o), inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock
shall apply on like terms to any such other shares.
46
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(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred 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 one one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of a share covered by a
Right immediately prior to 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
47
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Rights, in substitution for any adjustment in the number of one one-hundredths
of a share of Preferred 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 one one-hundredths of a share of Preferred 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
48
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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 one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per one one-hundredth of a share and
the number of one one-hundredths of a share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of a
share of Preferred Stock
49
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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 one
one-hundredths of a share of such Preferred 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 one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred 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 shall be entitled to make such
50
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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 Preferred Stock, issuance wholly for cash of any of the shares of Preferred
Stock at less than the current market price, issuance wholly for cash of the
Preferred Stock or securities which by their terms are convertible into or
exchangeable for Preferred 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 Preferred 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
51
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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 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.
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 Preferred Stock
and 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.
52
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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, (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 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 tradeable 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
53
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Price by the then number of one one-hundredths of a share of Preferred Stock for
which a Right is then exerciseable 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.
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(b) "Principal Party" shall mean
(1) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(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, and if no securities are so issued, the
Person that is the other party to the merger or consolidation; and
(2) in the case of any transaction described in (z) of the first
sentence in this Section 13, the Person that is the other party to such
transaction;
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 Securities Exchange Act of 1934, and
such Person is a direct or indirect subsidiary of another corporation the Common
Stock of which (or the Common Stock of another subsidiary of which) is and has
been so registered, "Principal Party" shall refer to such other corporation; (y)
in case there is more than one such Person referred to in clause (x) of the
proviso of this Section 13(b), or in case there is more than one Person referred
to in Section 13(b)(1) or (2), the Common
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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
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(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 Securities Exchange Act of 1934.
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).
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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,
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if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares
(other than fractions which are integral multiples of one one-hundredths of a
share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares. In lieu of fractional shares
that are not integral multiples of one one-hundredth of a share of Preferred
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 one-hundredth
of a share of Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing
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price of a share of Preferred 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 (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price 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
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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:
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(a) prior to the Distribution Date, the Rights 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 principal 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 Section 6(a), Section 7(e) and Section 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.
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Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths of a share of Preferred 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
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administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
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
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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
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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
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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
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
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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
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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 interested money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
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(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
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any further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Stock and 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 Preferred Stock and
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
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Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the State of New
York (or of any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of New York),
in good standing, having a principal office in the State of New York, 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 Preferred Stock and Common Stock, and mail a notice thereof in writing to
the
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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.
Section 23. Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to 5:00 P.M., New York City time, on the
earlier of (x) the tenth day following the Shares Acquisition Date, or (y) the
Final Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $.05 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
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"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, however, that if, following the occurrence of a 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
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anything contained in this Agreement to the contrary, the Rights shall not be
exercisable pursuant to Section 11(a)(ii) 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. 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
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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 Preferred Stock or to make any
other distribution to the holders of Preferred 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 Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (c) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
Preferred 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,
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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 Preferred 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 Preferred 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 Preferred Stock, whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) 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).
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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:
The Goodyear Tire & Rubber Company
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxx 00000-0000
Attention: General Counsel
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:
Manufacturers Hanover Trust Company
000 Xxxx 00 Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Vice President Administration
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
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Section 26. Supplements and Amendments. The Company 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 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
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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. 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 28. 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
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administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purpose of clause (ii) below, all omissions with
respect to the foregoing) which are done or made by the Board (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 Right Certificates.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common 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.
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Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; 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 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Ohio 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.
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Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
[SEAL] THE GOODYEAR TIRE &
RUBBER COMPANY
Attest:
By /s/ X X Xxxxxx By /s/ Xxx X Xxxxxxx
------------------------------ -------------------------------
[SEAL]
Attest: MANUFACTURERS HANOVER TRUST COMPANY
By /s/ Xxxxx Xxxxxxxxxx By /s/ Xxxxx X. Xxxxxxx
------------------------------ -------------------------------
Xxxxx Xxxxxxxxxx Xxxxx X. Xxxxxxx
Assistant Manager Vice President
83
Exhibit A
CERTIFICATE OF AMENDMENT
TO
AMENDED ARTICLES OF INCORPORATION
OF
THE GOODYEAR TIRE & RUBBER COMPANY
Xxx X Xxxxxxx, President, and Xxxxxxxx X Xxxxx, Secretary, of The
Goodyear Tire & Rubber Company, an Ohio corporation, with its principal office
located at Akron, Summit County, Ohio, do hereby certify that, pursuant to the
authority conferred upon the Board of Directors of said corporation by Section 1
of Part A of ARTICLE FOURTH of the Amended Articles of Incorporation of the said
corporation and by the Ohio General Corporation Law, at a meeting of the Board
of Directors of said corporation duly called and held on the 2nd day of July,
1986, at which meeting a quorum of the Board of Directors was at all times
present, the Board of Directors duly adopted, without shareholder action, which
shareholder action was not required, the following resolution:
RESOLVED, that The Goodyear Tire & Rubber Company hereby adopts the
following amendment to its Amended Articles of Incorporation, as amended to
date, and that the Chairman of the Board, the President or a Vice President and
the Secretary or an Assistant Secretary of said corporation are hereby
authorized and directed to sign and file in the office of the Secretary of State
of the State of Ohio a certificate containing a copy of the resolution adopting
the amendment and a statement of the manner of its adoption:
The Amended Articles of Incorporation of the corporation are hereby
amended to create a new series of Preferred Stock by adding a new Section 1-A to
PART A of ARTICLE FOURTH as follows:
SECTION 1-A. Series A $10.00 Preferred Stock, Without Par Value.
A series of Preferred Stock is hereby created having the following
terms:
1. Designation. The shares of such series is designated as:
"Series A $10.00 Preferred Stock, without par value."
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2. Authorized Number of Shares - Fractional Shares. The authorized
number of shares constituting the Series A $10.00 Preferred Stock is 3,000,000.
Series A $10.00 Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A $10.00 Preferred
Stock.
3. Dividends and Distributions.
(A) Subject to any prior and superior rights of the holders of any
series of Preferred Stock ranking prior and superior to the shares of Series A
$10.00 Preferred Stock with respect to dividends that may be authorized by the
Amended Articles of Incorporation, the holders of shares of Series A $10.00
Preferred Stock shall be entitled prior to the payment of any dividends on
shares ranking junior to the Series A $10.00 Preferred Stock to receive, when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last day of January,
April, July and October in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A $10.00 Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 or (b) subject to the provisions for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A $10.00 Preferred Stock. In the
event the Corporation shall at any time after July 2, 1986 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A $10.00 Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
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85
(B) The Corporation shall declare a dividend or distribution on the
Series A $10.00 Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $10.00 per share on the Series A
$10.00 Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A $10.00 Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series A $10.00
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A $10.00
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment Date.
(D) Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A $10.00 Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A $10.00 Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 60 days prior to the date fixed for the payment
thereof.
(E) Dividends in full shall not be declared or paid or set apart for
payment on the Series A $10.00 Preferred Stock for a dividend period terminating
on the Quarterly Dividend Payment Date unless dividends in full have been
declared or paid or set apart for payment on the Preferred Stock of all series
(other than series with respect to which dividends are not cumulative from a
date prior to such dividend date) for the respective dividend periods
terminating on such dividend date. When the dividends are not paid in full on
all series of the Preferred Stock, the shares of all series shall share ratably
in the payment of dividends, including accumulations, if any,
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in accordance with the sums which would be payable on said shares if all
dividends were declared and paid in full.
4. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series A $10.00 Preferred
Stock unless, prior thereto, the holders of shares of Series A $10.00 Preferred
Stock shall have received $10.00 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment (the "Series A Liquidation Preference"). Following the
payment of the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A $10.00
Preferred Stock unless, prior thereto, the holders of shares of Common Stock
shall have received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series A Liquidation Preference by (ii)
100 (as appropriately adjusted as set forth in subparagraph C below to reflect
such events as stock splits, stock dividends and recapitalizations with respect
to the Common Stock) (such number in clause (ii) is hereinafter referred to as
the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A $10.00 Preferred Stock and Common Stock,
respectively, holders of Series A $10.00 Preferred Stock and holders of shares
of Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series A $10.00 Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding
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Common Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
5. Conversion on Merger, Consolidation, etc. In case the Corporation
shall enter into any merger, consolidation, combination or other transaction in
which the shares of Common Stock are exchanged or changed into other stock or
securities, cash and/or any other property, then in any such case each share
of Series A $10.00 Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A $10.00 Preferred Stock shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
6. Redemption. The outstanding shares of Series A $10.00 Preferred
Stock shall not be redeemable.
7. Condition to Issuance of any other Series. The Articles of
Incorporation of the Corporation shall not be further amended to provide for the
issuance of any other series of Preferred Stock without the affirmative vote of
the holders of at least two-thirds of the outstanding shares of Series A $10.00
Preferred Stock, voting separately as one voting group.
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IN WITNESS WHEREOF, said Xxx X Xxxxxxx, President, and Xxxxxxxx X
Xxxxx, Secretary, of The Goodyear Tire & Rubber Company, acting for and on
behalf of said corporation, have hereunto subscribed their names and caused the
seal of said corporation to be hereunto affixed this 2nd day of July, 1986.
By:
-------------------------------
Xxx X Xxxxxxx, President
[SEAL]
By:
-------------------------------
Xxxxxxxx X Xxxxx, Secretary
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Exhibit B
[Form of Right Certificate]
Certificate No. R- Rights
----------
NOT EXERCISABLE AFTER JULY 28, 1996 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.05 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
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 July , 1986 (the "Rights Agreement") between The
Goodyear Tire & Rubber Company, an Ohio corporation (the "Company"), and
Manufacturers Hanover Trust Company, a national banking association (the "Rights
Agent"), to purchase from the
--------------
* The portion of the legend in brackets shell be inserted only if applicable.
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Company at any time after the Distribution Date (as such term is defined in the
Rights Agreement) and prior to 5:00 P.M. (Akron time) on July 28, 1996 at the
office of the Rights Agent, or its successors as Rights Agent, in New York, New
York, one one-hundredth of a fully paid non-assessable share of the Series A
$10.00 Preferred Stock, without par value (the "Preferred Stock"), of the
Company, at a purchase price of $100.00 per one one-hundredth of a 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 July 28, 1986,
based on the Preferred Stock of the Company as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right 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
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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 Preferred 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
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Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one one-hundredths of a share of
Preferred 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 $.05 per Right.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock which may,
at the election of the Company, be evidenced by depositary receipts), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Stock or
of any other securities of the Company which may at any time be issuable on the
exercise
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hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action, or, to receive notice of meetings
or other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of , 1986.
ATTEST: THE GOODYEAR TIRE & RUBBER
COMPANY
By
----------------------------- --------------------------------
Secretary Title:
Countersigned:
By
-------------------------------
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Authorized Signature
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right 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: , 19
----------------- ----
-----------------------------------
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such 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: , 19
----------- ---- -----------------------------------
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.
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To The Goodyear Tire & Rubber Company:
The undersigned hereby irrevocably elects to exercise
----------------
Rights represented by this Right Certificate to purchase the shares of the
Common Stock issuable 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: , 19
---------------- ----
-----------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
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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: , 19
------------ ----
-----------------------------------
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.
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Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 2, 1986, the Board of Directors of The Goodyear Tire & Rubber
Company (the "Company") declared a dividend distribution of one Right for each
outstanding share of Common Stock, without par value (the "Common Stock"), of
the Company. The distribution is payable on July 28, 1986 (the "Record Date")
to the shareholders of record on the Record Date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a share of
Series A $10.00 Preferred Stock, without par value (the "Preferred Stock"), or
in some circumstances, Common Stock, other securities, cash or other assets as
summarized below, at a price of $100.00 (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 Manufacturers Hanover
Trust Company as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) ten days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of the Common Stock or (ii)
ten days following the commencement or announcement of an intention to commence
a tender offer or exchange offer by any person if, upon consummation thereof,
such person would be an Acquiring Person (the earlier 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 Record Date, by such Common
Stock certificate with a copy of this Summary of Rights attached thereto. 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 or expiration of the Rights), new Common Stock
certificates issued after the Record Date upon transfer or new issuance of the
Common Stock will contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption or expiration
of the Rights), the surrender for transfer of any of the Common Stock
certificates outstanding as of the Record Date, even without a copy of this
Summary of Rights attached thereto, 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")
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100
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.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on July 28, 1996 unless earlier
redeemed by the Company as described below.
The Purchase Price payable, and the number of shares of Preferred
Stock (or Common Stock, other securities, cash or other assets, as the case may
be) issuable upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of the Preferred Stock, (ii) upon
the grant to holders of the Preferred Stock of certain rights or warrants to
subscribe for shares of the Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Preferred 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 dividends payable in the Preferred Stock) or of subscription
rights or warrants (other than those referred to above).
In the event that the Company were acquired in a merger or other
business combination transaction or that 50% or more of its assets or earning
power were sold, 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 company which at the time of
such transaction would have a market value of two times the exercise price of
the Right. In the event that the Company were the surviving corporation in a
merger and its Common Stock were not changed or exchanged, or in the event that
an Acquiring Person engages in one of a number of self-dealing transactions
specified in the Rights Agreement, or, in certain circumstances, an Acquiring
Person becomes the beneficial owner of 35% or more of the outstanding shares of
Common Stock, 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), will thereafter have the right to receive
upon exercise that number of shares of the Common Stock having a market value of
two times the exercise price of the Right.
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With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued (other than fractional
shares which are integral multiples of one one-hundredth of a Preferred Share)
and, in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the last trading date prior to the date of
exercise.
At any time prior to 5:00 P.M. Akron time on the tenth day following
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"), the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.05 per Right (the "Redemption Price") provided that 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 (as defined in the Rights Agreement) and
the Continuing Directors constitute a majority of the Board of Directors.
Thereafter, the Company's right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company. 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 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 Registration Statement on Form 8-A
dated July 3, 1986. A copy of the Rights Agreement is available free of charge
from the
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102
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
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103
AMENDMENT
TO
RIGHTS AGREEMENT
THIS AMENDMENT TO RIGHTS AGREEMENT, dated as of April 6, 1993 (this
"Amendment Agreement") between The Goodyear Tire & Rubber Company, an Ohio
corporation (the "Company") and First Chicago Trust Company of New York, a
corporation organized under the laws of the State of New York to exercise
corporate trust powers and subject to supervision and examination by Federal and
State of New York Authorities ("FCT" or the "Rights Agent").
WITNESSETH: that,
WHEREAS, the Company is a party to that certain Rights Agreement,
dated as of July 2, 1986, between the Company and FCT (initially with
Manufacturers Hanover Trust Company) as Rights Agent (the "Rights Agreement"),
FCT having been appointed Rights Agent in accordance with Section 21 of the
Rights Agreement pursuant to that certain Appointment of Successor Rights Agent
and Acceptance of Appointment dated March 21, 1990, replacing Manufacturers
Hanover Trust Company as the Rights Agent under the Rights Agreement effective
as of the opening of business on May 16, 1990; and
WHEREAS, the Board of Directors of the Company has authorized and
declared a 2-for-1 split of the Common Stock, without par value, of the Company
(the "Common Stock"), to be effected by the distribution as a stock dividend of
one share of the Common Stock on each share of Common Stock outstanding at April
30, 1993, to be distributed on May 4, 1993 (the "Stock Split"); and
WHEREAS, the Board of Directors of the Company, comprised entirely of
Continuing Directors (as defined in the Rights Agreement) at its meeting duly
convened and held on February 9, 1993, in accordance with the authority
conferred upon it under Section 26 of the Rights Agreement unanimously declared
that in connection with the Stock Split it would be desirable and appropriate
and in the best interests of the holders of the Common Stock and the Rights (as
that term is defined in the Rights Agreement) to amend the Rights Agreement to
adjust the terms of the Rights to reflect the effect of the Stock Split by
providing that each Right outstanding at the close of business on April 30, 1993
and each Right thereafter issued with shares of the Common Stock in accordance
with the Rights Agreement represents the right to purchase one two-hundredth of
a share of Series A $10.00 Preferred Stock of the Company at a purchase price of
$50, thereby making the Rights (after giving effect to this Amendment Agreement)
the economic equivalent of the Rights as in effect prior to the Stock Split in
respect of each holder of the Common Stock and the Rights;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
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104
1. Unless otherwise expressly defined in this Amendment Agreement or
the context otherwise requires, capitalized and other terms for which meanings
are provided in the Rights Agreement shall have such meanings when used in this
Amendment Agreement.
2. Effective April 30, 1993 and after giving effect to the Stock
Split, the Rights Agreement shall be, and it hereby is, amended by:
(A) Deleting the existing "Whereas" clause set forth immediately
following the Preamble in its entirety and by inserting a new "Whereas" clause
providing in its entirety as follows:
"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, without par value, of the
Company outstanding on July 28, 1986 (the "Record Date") and has authorized
the issuance of one Right in respect of each share of Common Stock of the
Company issued between the Record Date 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 two-hundredth of a share
of Series A $10.00 Preferred Stock of the Company having the rights, powers
and preferences set forth in the Articles of Amendment attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set
forth (the "Rights");"
(B) Deleting the existing paragraphs (a), (b) and (c) of Section 7 of
the Rights Agreement in their entirety and inserting in lieu thereof new
paragraphs (a), (b) and (c) of Section 7 of the Rights Agreement providing in
their entirety as follows:
"Section 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to Section 7(c) 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 Rights Certificate, with the form
of election to purchase on the reverse side thereof duly executed, to the
Rights Agent at its office at 00 Xxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000,
together with payment of the aggregate Purchase Price with respect to the
total number of one two-hundredths of a share of Preferred 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) July 28, 1996 (the "Final Expiration Date"), or (ii) the
date on which the Rights are redeemed as provided in Section 23 (such
earlier date being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one two-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $50,
shall be
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105
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 one
two-hundredth of a share of Preferred 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 Preferred Stock of the Company certificates for the total
number of one two-hundredths of a share of Preferred 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 Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one two-hundredths of
a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary 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 Section 11(a)(ii) and 11(a)(iii), (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 depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of
such Certificates, 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."
(C) Deleting the existing paragraph (e) of Section 9 of the Rights
Agreement in its entirety and inserting in lieu thereof a new paragraph (e) of
Section 9 of the Rights Agreement providing in its entirety as follows:
"(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 one two-hundredths of a share of Preferred Stock (or
Common Stock and/or)
106
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 one two-hundredths of a share of Preferred 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 one two-hundredths of a share of Preferred 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."
(D) Deleting the first sentence of Section 10 of the Rights Agreement
in its entirety and inserting in lieu thereof a new first sentence of Section 10
of the Rights Agreement providing in its entirety as follows:
"Section 10. Preferred Stock Record Date. Each person in whose name
any certificate for a number of one two-hundredths of a share of Preferred
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 fractional shares of Preferred
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 is evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred 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 Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of
the Company are open."
(E) Deleting the clause of subparagraph (a)(ii)(C) of Section 11 of
the Rights Agreement which provides "(x) multiplying the then Current Purchase
Price by the then number of one one-hundredths of a share of Preferred Stock for
which a right is then exercisable and dividing that product by (y)" and
inserting in lieu thereof the following clause:
"(x) multiplying the then Current Purchase Price by the then number of
one two-hundredths of a share of Preferred Stock for which a right is then
exercisable and dividing that product by (y)."
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107
(F) Deleting the paragraph (d)(ii) of Section 11 of the Rights
Agreement in its entirety and inserting in lieu thereof a new paragraph (d)(ii)
of Section 11 of the Rights Agreement providing in its entirety as follows:
"(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d), the
"current market price" per share of Preferred Stock shall be conclusively
deemed to be an amount equal to 200 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date
of this Agreement) multiplied by the current market price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "current market price" per share of
the Preferred Stock shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the
"current market price" of one two-hundredths of a share of Preferred Stock
shall be equal to the "current market price" of one share of Preferred
Stock divided by 200."
(G) Deleting the existing paragraphs (g), (h), (i), (j), (k) and (l)
of Section 11 of the Rights Agreement in their entirety and inserting in lieu
thereof new paragraphs (g), (h), (i), (j), (k) and (l) of Section 11 of the
Rights Agreement providing in their entirety as follows:
"(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one two-hundredths
of a share of Preferred 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 one two-hundredths of a share of Preferred Stock (calculated to the
nearest one-millionth) obtained by (i) multiplying (x) the number of one
two-hundredths of a share covered by a Right immediately prior to the
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the
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108
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one two-hundredths of a share of Preferred
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 one two-hundredths of a share of Preferred
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 one two-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
two-hundredth of a share and the number of one two-hundredths of a share
which were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one two-hundredth of the then par value, if any,
of a share of Preferred Stock issuable upon exercise of the Rights, the
Company shall xxxx
0
109
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 one two-hundredths of a share of such Preferred Stock at such
adjusted Purchase Price.
(l) In any case in which 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 one two-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one two-hundredths of a share of
Preferred 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."
(H) Deleting the existing paragraph (a) of Section 13 of the Rights
Agreement in its entirety and inserting in lieu thereof a new paragraph (a) of
Section 13 providing in its entirety as follows:
"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, (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 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 tradeable 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 one two-hundredths of a
share of Preferred 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
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110
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."
(I) Deleting the existing paragraph (b) of Section 14 of the Rights
Agreement in its entirety and inserting in lieu thereof a new paragraph (b) of
Section 14 providing in its entirety as follows:
"(b) The Company shall not be required to issue fractions of shares
(other than fractions which are integral multiples of one two-hundredths
of a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares. In lieu of fractional
shares that are not integral multiples of one two-hundredth of a share of
Preferred 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 two-hundredth of a share of Preferred Stock. For
purposes of this Section 14(b), the current market value of one
two-hundredth of a share of Preferred Stock shall be one two-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii)) for the Trading Day immediately prior to the date of
such exercise."
(J) Deleting the existing Section 17 of the Rights Agreement in its
entirety and inserting in lieu thereof a new Section 17 providing in its
entirety as follows:
"Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
one two-hundredths of a share of Preferred Stock or any other securities of
the Company which may at any time be issuable on the exercise of 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
8
111
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."
(K) Deleting the existing Form of Rights Certificate set forth at
Exhibit B (Pages B-1 through B-6, inclusive) to the Rights Agreement in its
entirety and inserting a new Form of Rights Certificate set forth at
Exhibit B providing in its entirety as follows:
Exhibit B
[Form of Right Certificate]
Certificate No. R- Rights
---------------
NOT EXERCISABLE AFTER JULY 28, 1996 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.05 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(c) OF THE RIGHTS AGREEMENT.]"
"The portion of the legend in brackets shall be inserted only if
applicable.
Right Certificate
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 July , 1986 (the "Rights Agreement")
between The Goodyear Tire & Rubber Company, an Ohio corporation (the
"Company"), and Manufacturers
9
112
Hanover Trust Company, a national banking association (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. (Akron
time) on July 28, 1996 at the office of Rights Agent, or its successors as
Rights Agent, in New York, New York, on two-hundredth of a fully paid
non-assessable share of the Series A $10.00 Preferred Stock, without par
value (the "Preferred Stock"), of the Company, at a purchase price of
$50.00 per one two-hundredth of a 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 July 28, 1986, based
on the Preferred Stock of the Company as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right 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 Preferred 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, provision 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, limitation 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 one two-hundredths of a share of Preferred Stock as the Rights evidenced
by the Right Certificate or Right Certificates surrendered shall have
entitled such holder to
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113
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 $.05 per Right.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one two-hundredth of a share of Preferred
Stock which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the 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 shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends of 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 , 1986.
ATTEST: THE GOODYEAR TIRE & RUBBER
COMPANY
By
-------------------------- -----------------------
Secretary Title
Countersigned:
By
------------------------
Authorized Signature
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114
[Form of Reverse Side of Right Certificate]
[(NOTE: Form of Reverse Side of Right Certificate not
amended and, therefore, not reproduced herein)]
(L) Deleting the existing first, sixth and tenth paragraphs of Exhibit C to
the Rights Agreement and inserting in lieu thereof new first, sixth and tenth
paragraphs as follows:
First paragraph: "On July 2, 1986, the Board of Directors of The
Goodyear Tire & Rubber Company (the "Company") declared a dividend
distribution of one Right for each outstanding share of Common Stock,
without par value (the "Common Stock"), of the Company. The distribution is
payable on July 28, 1986 (the "Record Date") to the shareholders of record
on the Record Date. Each Right entitles the registered holder to purchase
from the Company one two-hundredth of a share of Series A $10.00 Preferred
Stock, without par value (the "Preferred Stock"), or in some circumstances,
Common Stock, other securities, cash or other assets as summarized below,
at a price of $50.00 (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 Manufacturers Hanover
Trust Company as Rights Agent, as amended by that certain Amendment to
Rights Agreement dated as of April 6, 1993 between the Company and First
Chicago Trust Company of New York as successor Rights Agent (the "Rights
Agent")."
Sixth Paragraph: "With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional shares will
be issued (other than fractional shares which are integral multiples of one
two-hundredth of a Preferred Share) and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the
last trading date prior to the date of exercise."
Tenth Paragraph: "A Copy of the Rights Agreement, as amended by the
Amendment to Rights Agreement dated as of April 6, 1993, has been filed
with the Securities and Exchange Commission as Exhibits to a Registration
Statement on Form 8-A dated July 3, 1986, as amended by a Form 8 dated
April 19, 1993. A copy of the Rights Agreement, as amended, 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, as amended, which is hereby incorporated
herein by reference."
3. Effective as of April 6, 1993, the following shall be added (as a
separate paragraph) to the end of, and become a part of, the legend set forth at
paragraph (c) of Section
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3 of the Rights Agreement and shall appear on certificates for Common Stock
issued after April 30, 1993:
"The Goodyear Tire & Rubber Company appointed, effective May 16, 1990,
First Chicago Trust Company, as successor Rights Agent under the Rights
Agreement. The Rights Agreement was amended pursuant to an Amendment to
Rights Agreement dated as of April 6, 1993."
4. For all purposes under the Rights Agreement as amended by this
Amendment Agreement, including specifically Section 25 thereof, any notice or
demand authorized by the Rights Agreement to be given or made by the Company or
any holder of any Right Certificate to or on the Rights Agents shall be to the
address of the Rights Agent for the Company or by the holder of any Right
Certificate is as follows:
First Chicago Trust Company of New York
00 Xxxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Tender & Exchange Department
5. Nothing set forth in this Amendment Agreement shall in any manner
be construed to alter the rights of the holders of the Rights or the terms and
conditions of the Rights other than as expressly or by necessary implication set
forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
Rights Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
ATTEST THE GOODYEAR TIRE & RUBBER COMPANY
By: /s/Xxxxx Xxxxxxx By: /s/Xxxx X. Xxxx
--------------------- -----------------------------------
Xxxxx Xxxxxxx, Xxxx X. Xxxx,
Secretary Vice President
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By: /s/Xxxxxx Xxxxxxxxxx
-----------------------------------
Xxxxxx Xxxxxxxxxx,
Customer Service Officer
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