EXHIBIT 1 AND 2
RIGHTS AGREEMENT
dated as of
February 20, 1998
between
MASCOTECH, INC.
and
THE BANK OF NEW YORK
as Rights Agent
TABLE OF CONTENTS
Page
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Section 1. Definitions................................. 1
Section 2. Appointment of Rights Agent................. 5
Section 3. Issue of Right Certificates................. 5
Section 4. Form of Right Certificates.................. 7
Section 5. Countersignature and Registration........... 8
Section 6. Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right
Certificates................................ 8
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights................... 9
Section 8. Cancellation and Destruction of Right
Certificates................................ 11
Section 9. Reservation and Availability of Capital
Stock....................................... 11
Section 10. Preferred Stock Record Date................. 12
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights.......... 13
Section 12. Certificate of Adjusted Purchase or Number
of Shares................................... 22
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power..................... 22
Section 14. Fractional Rights and Fractional
Shares...................................... 25
Section 15. Rights of Action............................ 26
Section 16. Agreement of Right Holders.................. 27
Section 17. Right Certificate Holder Not Deemed a
Stockholder................................. 28
Section 18. Concerning the Rights Agent................. 28
Section 19. Merger or Consolidation or Change of Name
of Rights Agent............................. 29
Section 20. Duties of Rights Agent...................... 29
Section 21. Change of Rights Agent...................... 32
Section 22. Issuance of New Right Certificates.......... 33
Section 23. Redemption.................................. 33
Section 24. Exchange.................................... 34
Section 25. Notice of Proposed Actions.................. 35
Section 26. Notices..................................... 36
Section 27. Supplements and Amendments.................. 36
Section 28. Successors.................................. 37
Section 29. Determinations and Actions by the Board of
Directors, etc.............................. 37
Section 30. Benefits of this Agreement.................. 37
Section 31. Severability................................ 37
Section 32. Governing Law............................... 38
Section 33. Counterparts................................ 38
Section 34. Descriptive Headings........................ 38
Exhibit A - Form of Certificate of Designation of Preferred Stock
Exhibit B - Form of Right Certificate
Exhibit C - Summary Description of the Stockholder Rights Plan
RIGHTS AGREEMENT
AGREEMENT dated as of February 20, 1998, between MascoTech,
Inc., a Delaware corporation (the "Company"), and The Bank of New York, as
Rights Agent (the "Rights Agent"),
W I T N E S S E T H
WHEREAS, on February 17, 1998 the Board of Directors of the
Company authorized and declared a dividend of one preferred stock purchase
right (a "Right") for each share of Common Stock (as hereinafter defined)
outstanding at the close of business on February 27, 1998, (the "Record Date")
and has authorized the issuance, upon the terms and subject to the conditions
hereinafter set forth, of one Right in respect of each share of Common Stock
issued after the Record Date, each Right representing the right to purchase,
upon the terms and subject to the conditions hereinafter set forth, one
one-thousandth of a share of Preferred Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. The following terms, as used herein,
have the following meanings:
"Acquiring Person" means any Person who, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding, but shall not include
the Company, any of its Subsidiaries, any employee benefit plan of the Company
or any of its Subsidiaries or any Person organized, appointed or established by
the Company or any of its Subsidiaries for or pursuant to the terms of any
such plan; provided, however, that
(a) if the majority of Continuing Directors determines (whether
prior to or after the date that in the absence of such determination would be a
Distribution Date) in good faith that a Person who otherwise would be an
"Acquiring Person" became such inadvertently, and if such Person as promptly
as practicable divests itself of Beneficial Ownership of a sufficient number of
shares of Common Stock so that such Person is no longer an "Acquiring Person,"
then such Person shall not be deemed to be or to have become an "Acquiring
Person" for any purposes of this Agreement;
(b) if, at the close of business on the date hereof, any Person is
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, such Person shall not be or become an "Acquiring Person" unless
and until such Person (together with any Affiliate or Associate of such Person)
becomes the Beneficial Owner of an additional 5% or more of the shares of
Common Stock then outstanding (other than pursuant to a stock dividend, stock
split, recapitalization or similar transaction that does not affect the
percentage of outstanding Common Stock beneficially owned by such Person),
provided further that this clause (ii) will not apply to any Person if, at any
time after the date hereof, such Person ceases to be the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding; and
(c) no Person shall become an "Acquiring Person" solely as a
result of an acquisition of shares of Common Stock by the Company which, by
reducing the number of shares of Common Stock outstanding, increases the
proportionate number of shares of Common Stock beneficially owned by such
Person (together with any Affiliate and Associate of such Person) to 15% or
more of the shares of Common Stock then outstanding; provided, however, that
if a Person shall become the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding by reason of such share acquisition by the
Company and shall thereafter (together with any Affiliate and Associate)
become the Beneficial Owner of any additional shares of Common Stock (other
than pursuant to a stock dividend, stock split, recapitalization or similar
transaction that does not affect the percentage of outstanding Common Stock
beneficially owned by such Person) which causes the proportionate number of
shares of Common Stock beneficially owned by such Person to increase to 15% or
more of the shares of Common Stock then outstanding, then such Person shall be
deemed to be an "Acquiring Person".
"Affiliate" and "Associate" have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act as in effect on
the date hereof; provided that for all purposes of this Agreement, Masco
Corporation shall not be deemed to be an Affiliate or an Associate of any of
its directors and officers or to be the Beneficial Owner of any securities
owned directly or indirectly by any of its directors and officers, and the
officers and directors of Masco Corporation shall not be deemed to be
Affiliates or Associates of Masco Corporation or to be the Beneficial Owners
of any securities owned directly or indirectly by Masco Corporation.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
(a) which such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to Rule
13d-3 under the Exchange Act as in effect on the date hereof);
(b) which such Person or any of its Affiliates or Associates,
directly or indirectly, has
(i) the right to acquire (whether such right is exercisable
immediately or only upon the occurrence of certain events or
the passage of time or both) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or
otherwise (other than pursuant to the Rights); provided that a
Person shall not be deemed the "Beneficial Owner" of or to
"beneficially own" securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of
its Affiliates or Associates until such tendered securities are
accepted for payment or exchange; or
(ii) the right to vote (whether such right is exercisable
immediately or only upon the occurrence of certain events or
the passage of time or both) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or
otherwise; provided that a Person shall not be deemed the
"Beneficial Owner" of or to "beneficially own" any security
under this clause (ii) as a result of an agreement, arrangement
or understanding to vote such security if such agreement,
arrangement or understanding (A) arises solely from a revocable
proxy or consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and (B)
is not also then reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report);
or
(c) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person or
any of its Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
subparagraph (b)(ii) immediately above) or disposing of any such securities.
"Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Close of business" on any given date means 5:00 P.M., New York
City time, on such date; provided that if such date is not a Business Day
"close of business" means 5:00 P.M., New York City time, on the next
succeeding Business Day.
"Common Stock" means the Common Stock, par value $1.00 per
share, of the Company, except that, when used with reference to any Person
other than the Company, "Common Stock" means the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.
"Continuing Director" means any member of the Board of
Directors of the Company, while such Person is a member of the Board, who is
not an Acquiring Person or an Affiliate or Associate of an Acquiring Person or
a representative or nominee of an Acquiring Person or of any such Affiliate or
Associate and either (a) was a member of the Board immediately prior to the
time any Person becomes an Acquiring Person or (b) subsequently becomes a
member of the Board, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
"Distribution Date" means the earlier of (a) the close of
business on the tenth day (or such later day as may be designated by action of
a majority of the Continuing Directors) after the Stock Acquisition Date and
(b) the close of business on the tenth Business Day (or such later day as may
be designated by action of a majority of the Continuing Directors) after the
date of the commencement of a tender or exchange offer by any Person if, upon
consummation thereof, such Person would be an Acquiring Person.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expiration Date" means the earlier of (a) the Final Expiration
Date and (b) the time at which all Rights are redeemed as provided in Section
23 or exchanged as provided in Section 24.
"Final Expiration Date" means the close of business on February
17, 2008.
"Person" means an individual, corporation, partnership,
association, trust or any other entity or organization.
"Preferred Stock" means the Series A Participating Cumulative
Preferred Stock, par value $1.00 per share, of the Company, having the terms
set forth in the form of certificate of designation attached hereto as Exhibit
A.
"Purchase Price" means the price (subject to adjustment as
provided herein) at which a holder of a Right may purchase one one-thousandth
of a share of Preferred Stock (subject to adjustment as provided herein) upon
exercise of a Right, which price shall initially be $60.00.
"Section 11(a)(ii) Event" means any event described in the
first clause of Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x),
(y) or (z) of Section 13(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public
announcement (including the filing of a report on Schedule 13D under the
Exchange Act (or any comparable or successor report)) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such; provided
that no "Stock Acquisition Date" shall be deemed to have occurred on such date
due to any Person becoming the Beneficial Owner of the shares of Common Stock
such that such Person would otherwise be an Acquiring Person if, pursuant to
clause (i) of the proviso to the definition of "Acquiring Person", such Person
is deemed (whether prior to or after the date that would otherwise be a Stock
Acquisition Date) not to be or have become an "Acquiring Person".
"Subsidiary" of any Person means any other Person of which
securities or other ownership interests having ordinary voting power, in the
absence of contingencies, to elect a majority of the board of directors or
other Persons performing similar functions are at the time directly or
indirectly owned by such first Person.
"Trading Day" means 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 Common
Stock are not listed or admitted to trading on any national securities
exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights 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 upon ten
(10) days' prior written notice to the Rights Agent. The Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts or
omissions of any such Co-Rights Agent. If the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any Co-Rights
Agents shall be as the Company shall determine.
Section 3. Issue of Right Certificates. (a) Prior to the
Distribution Date, (i) the Rights will be evidenced by the certificates for
the Common Stock and not by separate Right Certificates (as hereinafter
defined) and the registered holders of the Common Stock shall be deemed to be
the registered holders of the associated Rights, and (ii) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock. As soon as practicable after the Record Date, the Company will
send a summary of the Rights substantially in the form of Exhibit C hereto, 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.
(b) As soon as practicable after the Company has notified the
Rights Agent of the occurrence of 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, one or more Right
Certificates evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. If an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(p), the
Company shall, at the time of distribution of the Right Certificates, make the
necessary and appropriate rounding adjustments (in accordance with Section
14(a)) so that Right Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. From and
after the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) Rights shall be issued in respect of all shares of Common
Stock outstanding as of the Record Date or issued (on original issuance or out
of treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. In addition, in connection with
the issuance or sale of shares of Common Stock following the Distribution Date
and prior to the Expiration Date, the Company (i) shall, with respect to
shares of Common Stock so issued or sold (x) pursuant to the exercise of stock
options or under any employee plan or arrangement or (y) upon the exercise,
conversion or exchange of other securities issued by the Company prior to the
Distribution Date and (ii) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided that no such Right Certificate shall be issued if, and to
the extent that, (i) the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Right Certificate would be issued or
(ii) appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
(d) Certificates for the Common Stock issued after the Record Date
but prior to the earlier of the Distribution Date and the Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between MascoTech, Inc. and The Bank of New York
dated as of February 20, 1998 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Company. The Company will mail to the holder of this certificate
a copy of the Rights Agreement without charge promptly after
receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
may be evidenced by separate certificates and no longer be
evidenced by this certificate, may be redeemed or exchanged or may
expire. As set forth in the Rights Agreement, Rights issued to,
or held by, any Person who is, was or becomes an Acquiring Person
or an Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may be null and void.
Section 4. Form of Right Certificates. (a) The certificates
evidencing the Rights (and the forms of assignment, election to purchase and
certificates to be printed on the reverse thereof) (the "Right Certificates")
shall be substantially in the form of Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law, rule or regulation 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. The Right Certificates shall be in a machine
printable format and in a form reasonably satisfactory to the Rights Agent.
The Right Certificates, whenever distributed, shall be dated as of the Record
Date and shall show the date of countersignature.
(b) Any Right Certificate representing Rights beneficially owned by
any Person referred to in clauses (i), (ii) or (iii) of the first sentence of
Section 7(d) shall (to the extent feasible) contain the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may be or may become
null and void in the circumstances specified in Section 7(d) of
such Agreement.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by an authorized signatory of the
Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company whose manual or facsimile signature is
affixed to 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 may, nevertheless, be countersigned by the
Rights Agent and 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. Any Right Certificate may be signed on behalf of the
Company by any Person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the place
for surrender of Right Certificates upon exercise, transfer or exchange, books
for registration and transfer of the Right Certificates. Such books shall
show with respect to each Right Certificate the name and address of the
registered holder thereof, the number of Rights indicated on the certificate
and the certificate number.
Section 6. Transfer and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. (a) At any time
after the Distribution Date and prior to the Expiration Date, any Right
Certificate or Certificates may, upon the terms and subject to the conditions
set forth below in this Section 6(a), be transferred or exchanged for another
Right Certificate or Certificates evidencing a like number of Rights as the
Right Certificate or Certificates surrendered. Any registered holder desiring
to transfer or exchange any Right Certificate or Certificates shall surrender
such Right Certificate or Certificates (with, in the case of a transfer, the
form of assignment and certificate on the reverse side thereof duly executed)
to the Rights Agent at the principal office or offices of the Rights Agent
designated 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 or Certificates until the registered holder
of the Rights has complied with the requirements of Section 7(e). Upon
satisfaction of the foregoing requirements, the Rights Agent shall, subject to
Sections 4(b), 7(d), 14 and 24, countersign and deliver to the Person entitled
thereto a Right Certificate or Certificates as so requested. The Company may
require payment by the holders of Rights of a sum sufficient to cover any
transfer tax or other governmental charge that may be imposed in connection
with any transfer or exchange of any Right Certificate or Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will issue and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein, including
Sections 7(d) and (e), 9(c), 11(a), 23 and 24) in whole or in part at any time
after the Distribution Date and prior to the Expiration Date upon surrender of
the Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights Agent at
the principal office or offices of the Rights Agent designated for such
purpose, together with payment (in lawful money of the United States of
America by certified check or bank draft payable to the order of the Company)
of the aggregate Purchase Price with respect to the Rights then to be
exercised and an amount equal to any applicable transfer tax or other
governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and
subject to Section 20(k), the Rights Agent shall thereupon promptly (i)(A)
requisition from any transfer agent of the Preferred Stock (or make available,
if the Rights Agent is the transfer agent therefor) certificates for the total
number of one one-thousandths of a share of Preferred Stock to be purchased
(and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests) or (B) if the Company shall have elected to deposit
the shares of Preferred Stock issuable upon exercise of the Rights with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-thousandths 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, (ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 14 and (iii) after receipt of such certificates or
depositary receipts and cash, if any, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate (with such
certificates or receipts registered in such name or names as may be designated
by such holder). If the Company is obligated to deliver Common Stock, other
securities or assets pursuant to this Agreement, the Company will make all
arrangements necessary so that such other securities and assets are available
for delivery by the Rights Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued by the
Rights Agent and 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, subject to the provisions of Section 14.
(d) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an 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
(or any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or in any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or any such Associate or Affiliate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Continuing Directors have
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(d) shall become null
and void without any further action, and no holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(d) and Section 4(b) 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 and Associates or any
transferee of any of them hereunder.
(e) 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 of Rights upon the occurrence of any
purported transfer pursuant to Section 6 or exercise pursuant to this Section 7
unless such registered holder (i) shall have completed and signed the
certificate contained in the form of assignment or election to purchase, as
the case may be, set forth on the reverse side of the Right Certificate
surrendered for such transfer or exercise, as the case may be, (ii) shall not
have indicated an affirmative response to clause 1 or 2 thereof and (iii)
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.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for exercise, transfer 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 this Agreement. The Company
shall deliver to the Rights Agent for cancellation, and the Rights Agent shall
cancel, 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 Capital Stock. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available a number of shares of Preferred Stock which are authorized but not
outstanding or otherwise reserved for issuance sufficient to permit the
exercise in full of all outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of
Rights may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all securities reserved for such issuance to be listed on any such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Securities Act with
respect to the securities issuable upon exercise of the Rights, (ii) to cause
such registration statement to become effective as soon as practicable after
such filing and (iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or blue sky laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed 90 days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to become
effective. 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 at such time as the
suspension is no longer in effect. Notwithstanding any such provision of this
Agreement to the contrary, the Rights shall not be exercisable for securities
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, such exercise therefor shall not be permitted under
applicable law or a registration statement in respect of such securities shall
not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all one one-thousandths of a share of
Preferred Stock issuable upon exercise of Rights shall, at the time of delivery
of the certificates for such securities (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and other
governmental charges which may be payable in respect of the issuance or
delivery of the Right Certificates and of any certificates for Preferred Stock
upon the exercise of Rights. The Company shall not, however, be required to
pay any transfer tax or other governmental charge which may be payable in
respect of any transfer involved in the issuance or delivery of any Right
Certificates or of any certificates for Preferred Stock to a Person other than
the registered holder of the applicable Right Certificate, and prior to any
such transfer, issuance or delivery any such tax or other governmental charge
shall have been paid by the holder of such Right Certificate or it shall have
been established to the Company's satisfaction that no such tax or other
governmental charge is due.
Section 10. Preferred Stock Record Date. Each Person (other
than the Company) in whose name any certificate for Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such Preferred Stock 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 transfer taxes or other governmental charges) was made; provided that
if the date of such surrender and payment is a date upon which the transfer
books of the Company relating to the Preferred Stock are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
applicable 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 stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights.
(a) (i) If the Company shall at any time after the date of this
Agreement pay a dividend on the Preferred Stock payable
in shares of Preferred Stock, subdivide the outstanding
Preferred Stock into a greater number of shares, combine
the outstanding Preferred Stock into a smaller number of
shares or 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 involving the Company), the Purchase Price in
effect immediately prior to 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 other capital stock
issuable on such date shall be proportionately adjusted
so that each holder of a Right shall (except as otherwise
provided herein, including Section 7(d)) thereafter be
entitled to receive, upon exercise thereof at the
Purchase Price in effect immediately prior to such date,
the aggregate number and kind of shares of Preferred
Stock or other 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 applicable transfer
books of the Company were open, such holder would have
been entitled to receive upon such exercise and by virtue
of such dividend, subdivision, combination or
reclassification. If an event occurs which requires an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section
11(a)(ii).
(ii) If any Person, alone or together with its
Affiliates and Associates, shall, at any time after the
date of this Agreement, become an Acquiring Person, then
proper provision shall promptly be made so that each
holder of a Right shall (except as otherwise provided
herein, including Section 7(d)) thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in
effect immediately prior to the first occurrence of a
Section 11(a)(ii) Event, in lieu of Preferred Stock,
such number of duly authorized, validly issued, fully
paid and nonassessable shares of Common Stock of the
Company (such shares being referred to herein as the
"Adjustment Shares") as shall be equal to the result
obtained by dividing
(x) the product obtained by multiplying the
Purchase Price in effect immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the number
of one one-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to
such first occurrence (such product being thereafter
referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by
(y) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of Common Stock on
the date of such first occurrence;
provided that if the transaction that would otherwise give rise to
the foregoing adjustment is also subject to the provisions of
Section 13, then only the provisions of Section 13 shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) If the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation but
not outstanding or reserved for issuance other than upon
exercise of the Rights is not sufficient to permit the exercise
in full of the Rights in accordance with Section 11(a)(ii), the
Company shall, with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment
of the Purchase Price then in effect, (A) (to the extent
available) Common Stock and then, (B) (to the extent
available) other equity securities of the Company which a
majority of the Continuing Directors has determined to be
essentially equivalent to shares of Common Stock in respect to
dividend, liquidation and voting rights (such securities being
referred to herein as "common stock equivalents") and then, if
necessary, (C) other equity or debt securities of the Company,
cash or other assets, a reduction in the Purchase Price or any
combination of the foregoing, having an aggregate value (as
determined by a majority of the Continuing Directors based upon
the advice of a nationally recognized investment banking firm
selected by a majority of the Continuing Directors) equal to
the value of the Adjustment Shares; provided that (x) the
Company may, and (y) if the Company shall not have made
adequate provision as required above to deliver value within 30
days following the later of the first occurrence of a Section
11(a)(ii) Event and the first date that the right to redeem
the Rights pursuant to Section 23 shall expire, then the
Company shall be obligated to, deliver, upon the surrender for
exercise of a Right and without requiring payment of the
Purchase Price, (1) (to the extent available) Common Stock
and then (2) (to the extent available) common stock
equivalents and then, if necessary, (3) other equity or debt
securities of the Company, cash or other assets or any
combination of the foregoing, having an aggregate value (as
determined by a majority of the Continuing Directors based upon
the advice of a nationally recognized investment banking firm
selected by the Continuing Directors) equal to the excess of
the value of the Adjustment Shares over the Purchase Price. If
a majority of the Continuing Directors shall determine in good
faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in
full of the Rights, the 30 day period set forth above (such
period, as it may be extended, being referred to herein as the
"Substitution Period") may be extended to the extent necessary,
but not more than 90 days following the first occurrence of a
Section 11(a)(ii) Event, in order that the Company may seek
stockholder approval for the authorization of such additional
shares. To the extent that the Company determines that some
action is to be taken pursuant to the first and/or second
sentence of this Section 11(a)(iii), the Company (X) shall
provide, subject to Section 7(d), that such action shall apply
uniformly to all outstanding Rights and (Y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form and
value of any consideration to be delivered as referred to in
such first and/or second sentence. If any such suspension
occurs, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the
current market price per share of Common Stock (as determined
pursuant to Section 11(d)) on the later of the date of the
first occurrence of a Section 11(a)(ii) Event and the first
date that the right to redeem the Rights pursuant to Section 23
shall expire; any common stock equivalent shall be deemed to
have the same value as the Common Stock on such date; and the
value of other securities or assets shall be determined
pursuant to Section 11(d)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within 45 calendar
days after such record date) Preferred Stock (or securities having the same
rights, privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into or exercisable
for Preferred Stock (or equivalent preferred stock) at a price per share of
Preferred Stock (or equivalent preferred stock) (in each case, taking account
of any conversion or exercise price) less than the current market price (as
determined pursuant to 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 date by a fraction, the numerator of which 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 price (taking account of any conversion
or exercise price) of the total number of shares of Preferred Stock (and/or
equivalent preferred stock) so to be offered would purchase at such current
market price and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock (and/or equivalent preferred stock) so to be
offered. In case such subscription price may be paid by delivery of
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 and shall be conclusive for all
purposes. 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 if such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger involving the
Company) of evidences of indebtedness, equity securities other than Preferred
Stock, assets (other than a regular periodic cash dividend out of the earnings
or retained earnings of the Company) or rights, options or warrants (excluding
those referred to in Section 11(b)), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the current market price (as determined pursuant to Section
11(d)) per share of Preferred Stock on such record date, less the value (as
determined pursuant to Section 11(d)(iii)) of such evidences of indebtedness,
equity securities, assets, rights, options or warrants so to be distributed
with respect to one share of Preferred Stock and the denominator of which
shall be such current market price per share of Preferred Stock. Such
adjustment shall be made successively whenever such a record date is fixed,
and if such distribution is not so made, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder
other than computations made pursuant to Section
11(a)(iii) or 14, the "current market price" per share of
Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such
Common Stock for the 30 consecutive Trading Days
immediately prior to such date; for purposes of
computations made pursuant to Section 11(a)(iii), the
"current market price" per share of Common Stock on any
date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 10
consecutive Trading Days immediately following such date;
and for purposes of computations made pursuant to Section
14, the "current market price" per share of Common Stock
for any Trading Day shall be deemed to be the closing
price per share of Common Stock for such Trading Day;
provided that if the current market price per share of
the Common Stock is determined during a 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
exercisable for or convertible into shares of such Common
Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and
prior to the expiration of the requisite 30 Trading Day
or 10 Trading Day period, as set forth above, 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" shall be properly adjusted to take
into account ex-dividend trading. The closing price for
each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated
transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed
or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading
or, if the shares of 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 Common Stock are not quoted by
any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board
of Directors of the Company, or, if at the time of such
selection there is an Acquiring Person, by a majority of
the Continuing Directors. 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 as determined in good
faith by the Board of Directors of the Company (or, if at
the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors) shall
be used. If the Common Stock is not publicly held or not
so listed or traded, the "current market price" per share
means the fair value per share as determined in good
faith by the Board of Directors of the Company, or, if at
the time of such determination there is an Acquiring
Person, by a majority of the Continuing Directors, or if
there are no Continuing Directors, by a nationally
recognized investment banking firm selected by the Board
of Directors, which 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
shall be determined in the same manner as set forth above
for the Common Stock in Section 11(d)(i) (other than the
last sentence thereof). If the current market price per
share of Preferred Stock cannot be determined in such
manner, the "current market price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal
to 1,000 (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 Common Stock (as
determined pursuant to Section 11(d)(i) (other than the
last sentence thereof)). If neither the Common Stock nor
the Preferred Stock is publicly held or so listed or
traded, the "current market price" per share of the
Preferred Stock shall be determined in the same manner as
set forth in the last sentence of Section 11(d)(i). For
all purposes of this Agreement, the "current market
price" of one one-thousandth of a share of Preferred
Stock shall be equal to the "current market price" of one
share of Preferred Stock divided by 1,000.
(iii) For the purpose of any computation
hereunder, the value of any securities or assets other
than Common Stock or Preferred Stock shall be the fair
value as determined in good faith by the Board of
Directors of the Company, or, if at the time of such
determination there is an Acquiring Person, by a majority
of the Continuing Directors then in office, or, if there
are no Continuing Directors, by a nationally recognized
investment banking firm selected by the Board of
Directors, which determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price;
provided 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 of Common
Stock or other share or ten-millionth of a share of Preferred Stock, as the
case may be.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a), the holder of any Right shall be entitled
to receive upon exercise of such Right any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder shall evidence the right to purchase, at the
Purchase Price then in effect, the then applicable number of one
one-thousandths of a share of Preferred Stock and other capital stock of the
Company issuable 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-thousandths of a share of Preferred Stock (calculated
to the nearest ten-millionth) obtained by (i) multiplying (x) the number of
one one-thousandths of a share for which a Right was exercisable immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-thousandths of a share of Preferred Stock
issuable 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-thousandths of a share of Preferred Stock for which such Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, 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 one-thousandths 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-thousandth of a share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par value, if any, of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of one one-thousandths of a
share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-thousandths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise over and
above the number of one one-thousandths of a share of Preferred Stock or other
capital stock of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided that the
Company shall deliver to such holder a due ββββ or other appropriate
instrument evidencing such holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that it, in its sole discretion,
shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Stock, issuance wholly for cash of any
Preferred Stock at less than the current market price, issuance wholly for
cash of Preferred Stock or securities which by their terms are convertible
into or exercisable for Preferred Stock, stock dividends or issuance of
rights, options or warrants referred to in this Section 11, hereafter made
by the Company to the holders of its Preferred Stock, shall not be taxable
to such stockholders.
(n) The Company covenants and agrees that it will not at any time
after the Distribution Date (i) consolidate, merge or otherwise combine with or
(ii) sell or otherwise transfer (and/or permit any of its Subsidiaries to sell
or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries, taken as a whole, to any
other Person or Persons if (x) at the time of or immediately after such
consolidation, merger, combination or sale there are any rights, warrants or
other instruments or securities outstanding or any agreements or arrangements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger, combination or sale, the
stockholders of a Person who constitutes, or would constitute, the "Principal
Party" for the purposes of Section 13 shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27, take (or
permit any Subsidiary to take) any action if at the time such action is taken
it is reasonably foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary,
if at any time after the date hereof and prior to the Distribution Date the
Company shall (i) pay a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock
into a larger number of shares or (iii) combine the outstanding Common Stock
into a smaller number of shares, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered thereafter as
contemplated by Section 3(c), shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock immediately prior
to such event by a fraction the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase 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
the manner set forth in Section 26. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) If, following the Stock Acquisition Date,
directly or indirectly,
(x) the Company shall consolidate with, merge into, or
otherwise combine with, any other Person, and the Company shall
not be the continuing or surviving corporation of such
consolidation, merger or combination,
(y) any Person shall merge into, or otherwise combine with,
the Company, and the Company shall be the continuing or
surviving corporation of such merger or combination and, in
connection with such merger or combination, all or part of the
outstanding shares of Common Stock shall be changed into or
exchanged for other stock or securities of the Company or any
other Person, cash or any other property, or
(z) the Company and/or one or more of its Subsidiaries
shall sell or otherwise transfer, in one transaction or a
series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries, taken as a whole, to any other
Person or Persons,
then, and in each such case, proper provision shall promptly be made so that
(i) each holder of a Right shall (except as otherwise
provided herein, including Section 7(d)) thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect
immediately prior to the first occurrence of any Triggering Event,
such number of duly authorized, validly issued, fully paid and
nonassessable shares of freely tradeable Common Stock of the
Principal Party (as hereinafter defined), not subject to any rights
of call or first refusal, liens, encumbrances or other claims, as
shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase
Price in effect immediately prior to the first occurrence of
any Triggering Event by the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable
immediately prior to such first occurrence (such product being
thereafter referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by
(B) 50% of the current market price (determined
pursuant to Section 11(d)(i)) per share of the Common Stock of
such Principal Party on the date of consummation of such
consolidation, merger, combination, sale or transfer;
(ii) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger,
combination, 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 shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; and
(iv) such Principal Party shall take such steps (including
the authorization and reservation of a sufficient number of shares of
its Common Stock to permit exercise of all outstanding Rights in
accordance with this Section 13(a)) in connection with the
consummation of any such transaction as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to the shares of its Common Stock
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section
13(a)(x) or (y), the Person that is the issuer of any securities into
which shares of Common Stock of the Company are converted in such
merger, consolidation or combination, and if no securities are so
issued, the Person that survives or results from such merger,
consolidation or combination; and
(ii) in the case of any transaction described in Section
13(a)(z), the Person that is the party receiving the greatest portion
of the assets or earning power transferred pursuant to such
transaction or transactions;
provided that in any such case, (A) if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to such other
Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, combination, sale or transfer unless the Principal Party shall have
a sufficient number of authorized shares of its Common Stock which are not
outstanding or otherwise reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in Section 13(a) and (b) and providing that, as soon as
practicable after the date of any consolidation, merger, combination, sale
or transfer mentioned in Section 13(a), the Principal Party will
(i) prepare and file a registration statement under the
Securities Act with respect to the securities issuable upon exercise
of the Rights, and will use its best efforts to cause such
registration statement (A) to become effective as soon as practicable
after such filing and (B) to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the
Expiration Date and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, combinations, sales or other transfers.
If any Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p), or to distribute Right
Certificates which evidence fractional Rights. In lieu of any such fractional
Rights, the Company shall pay 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
price of a whole Right. For purposes of this Section 14(a), the current market
price of a whole Right shall be the closing price of a Right for the Trading
Day immediately prior to the date on which such fractional Rights would
otherwise have been issuable. The closing price of a Right 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, on the principal national securities exchange on
which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company, or, if at the time of such
selection there is an Acquiring Person, by a majority of the Continuing
Directors. If on any such date no such market maker is making a market in the
Rights, the current market price of the Rights on such date shall be as
determined in good faith by the Board of Directors of the Company, or, if at
the time of such determination there is an Acquiring Person, by a majority of
the Continuing Directors.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are multiples of one one-thousandth of a share of
Preferred Stock). In lieu of any such fractional shares of Preferred Stock,
the Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market price of one one-thousandth of a share
of Preferred Stock. For purposes of this Section 14(b), the current market
price of one one-thousandth of a share of Preferred Stock shall be one
one-thousandth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)) for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of any Triggering Event or upon
any exchange pursuant to Section 24, 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 shall pay to the
registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the
same fraction of the current market price of a share of Common Stock. For
purposes of this Section 14(c), the current market price of a share of
Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to Section 11(d)(i)) for the Trading Day immediately
prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the
registered holders of certificates representing Common Stock); and any
registered holder of any Right Certificate (or, prior to the Distribution
Date, of any certificate representing 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 any certificate representing 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. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of, any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of 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 or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights Agent
may deem and treat the Person in whose name a Right Certificate (or, prior to
the Distribution Date, a certificate representing shares of Common Stock) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate
or the certificate representing shares of Common Stock 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(d), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or otherwise
restraining performance of such obligation; provided that the Company must use
its best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a 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 shares of capital
stock 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 stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25), 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. (a) The Company
agrees to pay to the Rights Agent such compensation as shall be agreed to in
writing between the Company and the Rights Agent for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees, expenses and disbursements and other
disbursements incurred in the execution or administration of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the administration of this
Agreement or the exercise or performance of its duties hereunder, including
the costs and expenses of defending against any claim of liability. The
provisions of this Section 18(a) shall survive the expiration of the Rights and
the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with the administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any Right Certificate or
certificate for Common Stock or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, opinion, instruction, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed and executed by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer 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 a predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any "Acquiring Person" and the
determination of "current market price") be proved or established by the
Company prior to taking, suffering or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President
or any Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant 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, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(d)) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23 or 24, 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 Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Common Stock
or Preferred Stock will, when issued, be duly authorized, validly issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President or any Vice President or the Secretary or
any Assistant Secretary or the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not the 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 Person.
(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 or to any holders of Rights
resulting from any such act, default, neglect or misconduct, provided that
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 cases may be,
has either not been completed or indicates an affirmative response to
clause 1 or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or 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 Common Stock and Preferred Stock by
registered or certified mail, and, subsequent to the Distribution Date, to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock and Preferred
Stock by registered or certified mail, and, subsequent to the Distribution
Date, to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a corporation organized and doing business under the
laws of the United States or of any state of the United States, in good
standing, having a principal office in the State of New York, which is
authorized under such laws to exercise stock transfer or corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate of
a corporation described in clause (a) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and the Preferred Stock, and, subsequent to the
Distribution Date, mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for
in this Section 21, 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 and the number or kind
or class of shares of stock issuable upon exercise of the Rights 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 the earlier of (i) the close
of business on the tenth day after the Stock Acquisition Date (or such later
date as a majority of the Continuing Directors may designate prior to such
time as the Rights are no longer redeemable) and (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided that after any Person has
become an Acquiring Person, any redemption of the Rights shall be effective
only if there are Continuing Directors then in office, and such redemption
shall have been approved by a majority of such Continuing Directors.
Notwithstanding anything in this Agreement to the contrary, the Rights shall
not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights and without any further action and
without any notice, the right to exercise the Rights will terminate and
thereafter the only right of the holders of Rights shall be to receive the
Redemption Price for each Right so held. The Company shall promptly
thereafter give notice of such redemption to the Rights Agent and the holders
of the Rights in the manner set forth in Section 26; provided that the failure
to give, or any defect in, such notice shall not affect the validity of such
redemption. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than that specifically set forth in Section 23 or 24, and
other than in connection with the purchase, acquisition or redemption of
shares of Common Stock prior to the Distribution Date.
Section 24. Exchange. (a) At any time after any Person
becomes an Acquiring Person, a majority of the Continuing Directors may, at
their option, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to
Section 7(d)) for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any Person (other
than the Company, any of its Subsidiaries, any employee benefit plan of the
Company or any of its Subsidiaries or any Person organized, appointed or
established by the Company or any of its Subsidiaries for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the shares of
Common Stock then outstanding.
(b) Immediately upon the action of the Continuing Directors
electing to exchange any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights
will terminate and thereafter the only right of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly thereafter give notice of such exchange to the
Rights Agent and the holders of the Rights to be exchanged in the manner
set forth in Section 26; provided that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to Section 7(d)) held by each
holder of Rights
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute common stock equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the initial
rate of one common stock equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of common stock equivalents pursuant to the terms thereof, so
that each common stock equivalent delivered in lieu of each share of Common
Stock shall have essentially the same dividend, liquidation and voting rights
as one share of Common Stock.
Section 25. Notice of Proposed Actions. (a) In case the
Company shall propose, at any time after the Distribution Date, (i) 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 quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of its 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 (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving only the
subdivision or combination of outstanding shares of Preferred Stock) or
(iv) to effect any consolidation or merger with any other Person, or to
effect and/or to permit one or more of its Subsidiaries to effect any sale
or other transfer, in one transaction or a series of related transactions,
of assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries, taken as a whole, to any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give
to each holder of a Right, to the extent feasible and in accordance with
Section 26, a notice of such proposed action, which shall specify the
record date for the purposes of any such dividend, distribution or offering
of rights or warrants, or the date on which any 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
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 (i) or (ii) above at
least 20 days prior to the record date for determining holders of the
Preferred Stock entitled to participate in such dividend, distribution or
offering, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of
participation therein by the holders of Preferred Stock, whichever shall be
the earlier. The failure to give notice required by this Section or any
defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a public filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the
holders of securities of the Company, including the Rights, for purposes of
this Agreement and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case,
(1) the Company shall as soon as practicable thereafter give to each holder of
a Right, in accordance with Section 26, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or 13, as the case may be, and (2)
all references in Section 25(a) to Preferred Stock shall be deemed thereafter
to refer to Common Stock or other capital stock, as the case may be.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right to or on the Company shall be sufficiently given or made if sent by
first-class mail (postage prepaid) to the address of the Company indicated on
the signature page hereof or such other address as the Company shall specify
in writing to the Rights Agent. 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 to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail (postage prepaid) to the
address of the Rights Agent indicated on the signature page hereof or such
other address as the Rights Agent shall specify in writing to the Company.
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 (or, prior
to the Distribution Date, to the holder of any certificate representing shares
of Common Stock) shall be sufficiently given or made if sent by first-class
mail (postage prepaid) to the address of such holder shown on the registry
books of the Company.
Section 27. Supplements and Amendments. Prior to the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock.
From and after the Distribution Date, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (a) to cure any
ambiguity, (b) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein or (c) to
change or supplement the provisions hereof in any manner which the Company may
deem necessary or desirable and which shall not adversely affect the interests
of the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Notwithstanding the foregoing, after any
Person has become an Acquiring Person, any supplement or amendment shall be
effective only if there are Continuing Directors then in office, and such
supplement or amendment shall have been approved by a majority of such
Continuing 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, the Rights Agent shall
execute such supplement or amendment. 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 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of
Directors, etc.. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) under the
Exchange Act as in effect on the date of this Agreement. The Board of
Directors of the Company (or, where specifically provided for herein, a
majority of 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 to the Company, or as may be necessary or
advisable in the administration of this Agreement, including 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 exchange or not to redeem or
exchange the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board (or, after any Person has become an Acquiring Person, by
a majority of the Continuing Directors) in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors of the
Company or the Continuing Directors to any liability to the holders of the
Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the certificates representing the shares of 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 (and, prior
to the Distribution Date, the certificates representing the shares of Common
Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided 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 (or, after any Person has become an Acquiring Person, a majority
of the Continuing Directors) 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 or Continuing Directors, as the case may be.
Section 32. Governing Law. This Agreement, each Right and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware 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, except that the rights and
obligations of the Rights Agent shall be governed by the law of the State of
New York.
Section 33. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute one and the same instrument.
Section 34. Descriptive Headings. The captions herein are
included for convenience of reference only, do not constitute a part of this
Agreement and shall be ignored in the construction and interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
MASCOTECH, INC.
By:
-----------------------------------
Name:
Title:
βββββ βββ ββββ ββββ
ββββββ, ββββββββ βββββ
Attention: Secretary
THE BANK OF NEW YORK
By:
-----------------------------------
Name:
Title:
βββ βββββββ ββββββ
βββ ββββ, βββ ββββ βββββ
Attention: Stock Transfer
Administration
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
MASCOTECH, INC.
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
We, βββββ β. βββββββββ, Chief Executive Officer, and βββββββ
βββββββ, Senior Vice President and Assistant Secretary, of MascoTech, Inc.,
a corporation organized and existing under the General Corporation Law of the
State of Delaware ("Delaware Law"), in accordance with the provisions thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Company, the Board of
Directors on February 17, 1998, adopted the following resolution creating a
series of Preferred Stock in the amount and having the designation, voting
powers, preferences and relative, participating, optional and other special
rights and qualifications, limitations and restrictions thereof as follows:
Section 1. Designation and Number of Shares. The shares of
such series shall be designated as "Series A Participating Cumulative Preferred
Stock" (the "Series A Preferred Stock"), and the number of shares constituting
such series shall be 250,000. Such number of shares of the Series A Preferred
Stock may be increased or decreased by resolution of the Board of Directors;
provided that no decrease shall reduce the number of shares of Series A
Preferred Stock to a number less than the number of shares then outstanding
plus the number of shares issuable upon exercise or conversion of outstanding
rights, options or other securities issued by the Company.
Section 2. Dividends and Distributions.
(A) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable on
February 15, May 15, August 15 and November 15 of 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 any share
or fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00 and (b) subject
to the provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends or other cash distributions
and 1,000 times the aggregate per share amount of all non-cash dividends or
other non-cash distributions (other than (i) a dividend payable in shares of
Common Stock, par value $1.00 per share, of the Company (the "Common Stock") or
(ii) 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 Preferred Stock. If the Company shall at
any time after February 17, 1998 (the "Rights Declaration Date") pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior
to such event.
(B) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than as
described in clauses (i) and (ii) of the first sentence of paragraph (A));
provided that if 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 (or, with respect to the
first Quarterly Dividend Payment Date, the period between the first issuance
of any share or fraction of a share of Series A Preferred Stock and such first
Quarterly Dividend Payment Date), a dividend of $1.00 per share on the Series
A 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 Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is on or before the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue and be cumulative from the date
of issue of such shares, or unless the date of issue is a date after the
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and on or before such Quarterly
Dividend Payment Date, in which case dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall not be more than 60
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other voting
rights required by law, the holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of stockholders of the
Company. If the Company shall at any time after the Rights Declaration Date
pay any dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as a single class on all matters submitted to a vote of
stockholders of the Company.
(C) (i) If at any time dividends on any Series A
Preferred Stock shall be in arrears in an amount equal to six
quarterly dividends thereon, the occurrence of such contingency
shall ββββ the beginning of a period (herein called a "default
period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all
shares of Series A Preferred Stock then outstanding shall have
been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock and any other
series of Preferred Stock then entitled as a class to elect
directors, voting together as a single class, irrespective of
series, shall have the right to elect two Directors.
(ii) During any default period, such voting right of the
holders of Series A Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and
thereafter at annual meetings of stockholders, provided that
neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of Directors shall be exercised
unless the holders of 10% in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence
of a quorum of holders of Common Stock shall not affect the
exercise by holders of Preferred Stock of such voting right. At
any meeting at which holders of Preferred Stock shall exercise
such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors
to fill such vacancies, if any, in the Board of Directors as may
then exist up to two Directors or, if such right is exercised at
an annual meeting, to elect two Directors. If the number which
may be so elected at any special meeting does not amount to the
required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall
be necessary to permit the election by them of the required
number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period and
during the continuance of such period, the number of Directors
shall not be increased or decreased except by vote of the holders
of Preferred Stock as herein provided or pursuant to the rights of
any equity securities ranking senior to or pari passu with the
Series A Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may
order, or any stockholder or stockholders owning in the
aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series, may
request, the calling of special meeting of holders of Preferred
Stock, which meeting shall thereupon be called by the
President, a Vice President or the Secretary of the Company.
Notice of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote pursuant to
this paragraph (C)(iii) shall be given to each holder of record
of Preferred Stock by mailing a copy of such notice to him at
his last address as the same appears on the books of the
Company. Such meeting shall be called for a time not earlier
than 20 days and not later than 60 days after such order or
request or in default of the calling of such meeting within 60
days after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in the
aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series.
Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the period within
60 days immediately preceding the date fixed for the next
annual meeting of stockholders.
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Company if applicable, shall
continue to be entitled to elect the whole number of Directors
until the holders of Preferred Stock shall have exercised their
right to elect two Directors voting as a class, after the
exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the
Board of Directors may (except as provided in paragraph (C)(ii)
of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall
have become vacant. References in this paragraph (C) to
Directors elected by the holders of a particular class of stock
shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to
elect Directors shall cease, (y) the term of any Directors
elected by the holders of Preferred Stock as a class shall
terminate, and (z) the number of Directors shall be such number
as may be provided for in the certificate of incorporation or
bylaws irrespective of any increase made pursuant to the
provisions of paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner
provided by law or in the certificate of incorporation or
bylaws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence
may be filled by a majority of the remaining Directors.
(D) The Certificate of Incorporation of the Company shall not
be amended in any manner (whether by merger or otherwise) so as to adversely
affect the powers, preferences or special rights of the Series A Preferred
Stock without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Preferred Stock, voting separately as a class.
(E) Except as otherwise provided herein, holders of Series A
Preferred Stock shall have no special voting rights, and their consent shall
not be required for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding shares of Series A
Preferred Stock shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such other parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem, purchase or otherwise acquire for value any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock; provided that the Company may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange
for shares of stock of the Company ranking junior (as to dividends
and upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any
shares of Series A Preferred Stock, or any shares of stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of Series A Preferred Stock and all such other parity
stock upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for value any shares of stock of the Company
unless the Company could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock redeemed, purchased or otherwise acquired by the Company in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock without designation as to
series and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors as permitted by
the Certificate of Incorporation or as otherwise permitted under the General
Corporation Law of the State of Delaware.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall be
made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment; provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
Common Stock, or (2) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all such other parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. If the Company shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. If the Company shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash or any other property, as the case may be, into which or for
which each share of Common Stock is changed or exchanged. If the Company
shall at any time after the Rights Declaration Date pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision or combination
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. No Redemption. The Series A Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank
junior (as to dividends and upon liquidation, dissolution and winding up) to
all other series of the Company's preferred stock except any series that
specifically provides that such series shall rank junior to or pari passu with
the Series A Preferred Stock.
Section 10. Fractional Shares. Series A 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 Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate this 23rd day of February, 1998.
MASCOTECH, INC.
-----------------------
βββββ β. βββββββββ
Chief Executive Officer
Attest:
------------------------
βββββββ βββββββ
Senior Vice President
and Assistant Secretary
Exhibit B
[Form of Right Certificate]
Rights
No. R- -----------
NOT EXERCISABLE AFTER THE EARLIER OF FEBRUARY 17, 2008 AND THE DATE ON WHICH
THE RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET
FORTH IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BE NULL AND VOID. [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). THIS RIGHT CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(d) OF THE RIGHTS AGREEMENT.](1)
RIGHT CERTIFICATE
MASCOTECH, INC.
This Right Certificate certifies that ______________________, or
registered assigns, is the registered holder of the number of Rights set forth
above, each of which entitles the holder (upon the terms and subject to the
conditions set forth in the Rights Agreement dated as of February 20, 1998
(the "Rights Agreement") between MascoTech, Inc., a Delaware corporation (the
"Company"), and The Bank of New York (the "Rights Agent")) to purchase from
the Company, at any time after the Distribution Date and prior to the
Expiration Date, one one-thousandth of a fully paid, nonassessable share of
Series A Participating Cumulative Preferred Stock (the "Preferred Stock") of
the Company at a purchase price of $60.00 per one one-thousandth of a share
(the "Purchase Price"), payable in lawful money of the United States of
America, upon surrender of this Right Certificate, with the form of election to
purchase and related certificate duly executed, and payment of the Purchase
Price at an office of the Rights Agent designated for such purpose.
Terms used herein and not otherwise defined herein have the
meanings assigned to them in the Rights Agreement.
(1) If applicable, insert this portion of the legend and delete the preceding
sentence.
The number of Rights evidenced by this Right Certificate (and
the number and kind of shares issuable upon exercise of each Right) and the
Purchase Price set forth above are as of February 27, 1998, and may have been
or in the future be adjusted as a result of the occurrence of certain events,
as more fully provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Right Certificate are beneficially owned by (a) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (b) a transferee of
an Acquiring Person (or any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (c) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such, such Rights shall
become null and void, and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii) Event.
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, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights
Agent designated for such purpose and subject to the terms and conditions set
forth in the Rights Agreement, any Rights Certificate or Certificates may be
transferred or exchanged for another Rights Certificate or Certificates
evidencing a like number of Rights as the Rights Certificate or Certificates
surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors (or, with respect to paragraph (b) below, a majority of the
Continuing Directors) of the Company may, at its option,
(a) at any time prior to the earlier of (i) the close of
business on the tenth day after the Stock Acquisition Date (or
such later date as a majority of the Continuing Directors may
designate prior to such time as the Rights are no longer
redeemable) and (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of
$.01 per Right; or
(b) at any time after any Person becomes an Acquiring Person
(but before such Person becomes the Beneficial Owner of 50% or more
of the shares of Common Stock then outstanding), exchange all or
part of the then outstanding Rights (other than Rights held by the
Acquiring Person and certain related Persons) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right.
If the Rights shall be exchanged in part, the holder of this Right
Certificate shall be entitled to receive upon surrender hereof
another Right Certificate or Certificates for the number of whole
Rights not exchanged.
No fractional shares of Preferred Stock are required to be
issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are multiples of one one-thousandth 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. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Certificates for the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
capital stock which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of
the Rights Agent.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal by its authorized officers.
Dated as of _________ __, 199_
MASCOTECH, INC.
By______________________
Title:
[SEAL]
Attest:
______________________
Secretary
Countersigned:
THE BANK OF NEW YORK
as Rights Agent
By____________________
Authorized Signature
Date of Countersignature:
__________________________
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED____________________________________________________________
hereby sells, assigns and transfers unto______________________________________
______________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ________________, ______
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are
___are not being assigned 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 in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it ___did ___did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________, ____ ________________________
Signature
_____________
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
_____________
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights represented by the Right Certificate.)
To: MascoTech, Inc.
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to purchase
shares of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person which may be
issuable upon the exercise of the Rights) and requests that certificates
for such securities be issued in the name of and delivered to:
Please insert social security
or other identifying number
---------------------------------------------------------------------------
(Please print name and address)
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If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
---------------------------------------------------------------------------
(Please print name and address)
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Dated: ________________, ____
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate ___are
___are not being 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 in 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
____________
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
____________
Exhibit C
MASCOTECH, INC.
STOCKHOLDER RIGHTS PLAN
Summary of Terms
Form of Security: The Board of Directors has declared a dividend
of one preferred stock purchase right for each
outstanding share of the Company's Common Stock,
payable to holders of record as of the close of
business on February 27, 1998 (each a "Right"
and collectively, the "Rights")
Transfer: Prior to the Distribution Date(1), the Rights
will be evidenced by the certificates for and
will be transferred with the Common Stock, and
the registered holders of the Common Stock will
be deemed to be the registered holders of the
Rights.
After the Distribution Date, the Rights Agent
will mail separate certificates evidencing the
Rights to each record holder of the Common Stock
as of the close of business on the Distribution
Date, and thereafter the Rights will be
transferable separately from the Common Stock.
[FN]
-----------------------
1 Distribution Date means the earlier of:
(1) the 10th day after public announcement that any person or group has
become the beneficial owner of 15% or more of the Company's Common
Stock and
(2) the 10th business day after the date of the commencement of a tender
or exchange offer by any person which would, if consummated, result
in such person becoming the beneficial owner of 15% or more of the
Company's Common Stock, in each case, subject to extension by a
majority of the Continuing Directors.
Exercise: Prior to the Distribution Date, the Rights will
not be exercisable.
After the Distribution Date, each Right will be
exercisable to purchase, for $60.00 (the
"Purchase Price"), one one-thousandth of a share
of Series A Participating Cumulative Preferred
Stock, par value $1.00 per share, of the Company.
Flip-In: If any person or group (an "Acquiring Person")
becomes the beneficial owner of 15% or more of
the Company's Common Stock, then each Right
(other than Rights beneficially owned by the
Acquiring Person and certain affiliated persons)
will entitle the holder to purchase, for the
Purchase Price, a number of shares of the
Company's Common Stock having a market value of
twice the Purchase Price.
Flip-Over: If, after any person has become an Acquiring
Person, (1) the Company is involved in a merger
or other business combination in which the
Company is not the surviving corporation or its
Common Stock is exchanged for other securities
or assets or (2) the Company and/or one or more
of its subsidiaries sell or otherwise transfer
assets or earning power aggregating more than
50% of the assets or earning power of the
Company and its subsidiaries, taken as a whole,
then each Right will entitle the holder to
purchase, for the Purchase Price, a number of
shares of common stock of the other party to
such business combination or sale (or in certain
circumstances, an affiliate) having a market
value of twice the Purchase Price.
Exchange: At any time after any person has become an
Acquiring Person (but before any person becomes
the beneficial owner of 50% or more of the
Company's Common Stock), a majority of the
Continuing Directors(2) may exchange all or part
of the Rights (other than the Rights
beneficially owned by the Acquiring Person and
certain affiliated persons) for shares of Common
Stock at an exchange ratio of one share of
Common Stock per Right.
[FN]
----------------------------
2 "Continuing Director" means any member of the Board of Directors who
was a member of the Board prior to the time an Acquiring Person
becomes such or any person who is subsequently elected to the Board if
such person is recommended or approved by a majority of the Continuing
Directors. Continuing Directors do not include an Acquiring Person,
an affiliate or associate of an Acquiring Person or any representative
or nominee of the foregoing.
Redemption: The Board of Directors may redeem all of the
Rights at a price of $.01 per Right at any time
prior to the close of business on the 10th day
after public announcement that any person has
become an Acquiring Person (subject to extension
by a majority of the Continuing Directors).
After any person has become an Acquiring Person,
the Rights may be redeemed only with the
approval of a majority of the Continuing
Directors.
Expiration: The Rights will expire on February 17, 2008,
unless earlier exchanged or redeemed.
Amendments: Prior to the Distribution Date, the Rights
Agreement may be amended in any respect.
After the Distribution Date, the Rights
Agreement may be amended in any respect that
does not adversely affect the Rights holders
(other than any Acquiring Person and certain
affiliated persons).
After any person has become an Acquiring Person,
the Rights Agreement may be amended only with
the approval of a majority of the Continuing
Directors.
Voting Rights: Rights holders have no rights as a stockholder of
the Company, including the right to vote and to
receive dividends.
Antidilution The Rights Agreement includes
Provisions: antidilution provisions designed to prevent
efforts to diminish the efficacy of the Rights.
Taxes: Distribution of the Rights is designed to be
tax-free to the Company and its stockholders,
although income may be recognized by the holders
of the Rights upon the occurrence of certain
subsequent events.
_______________
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. A copy of
the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement.