EXHIBIT 4.1
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BHA GROUP, INC.
and
BOATMEN'S TRUST COMPANY
Rights Agent
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Rights Agreement
Dated as of December 13, 1995
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Table of Contents
Section Page
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1. Certain Definitions .......................................... 1
2. Appointment of Rights Agent .................................. 6
3. Issue of Rights Certificates ................................. 7
4. Form of Rights Certificates .................................. 10
5. Countersignature and Registration ............................ 12
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates ......................................... 13
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights ...................................................... 15
8. Cancellation and Destruction of Rights Certificates .......... 19
9. Reservation and Availability of Capital Stock ................ 20
10. Company Common Stock Record Date ............................ 23
11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights ........................................ 24
12. Certificate of Adjusted Purchase Price
or Number of Shares ........................................ 45
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power .............................................. 46
14. Fractional Rights and Fractional Shares ..................... 53
15. Rights of Action ............................................ 54
16. Agreement of Rights Holders ................................. 55
17. Rights Certificate Holder Not Deemed a Shareholder .......... 57
18. Concerning the Rights Agent ................................. 57
19. Merger or Consolidation or Change of Name of Rights
Agent ...................................................... 58
20. Duties of Rights Agent ...................................... 60
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21. Change of Rights Agent ...................................... 64
22. Issuance of New Rights Certificates ......................... 66
23. Redemption and Termination .................................. 67
24. Notice of Certain Events .................................... 68
25. Notices ..................................................... 70
26. Supplements and Amendments .................................. 71
27. Successors .................................................. 73
28. Determinations and Actions by the Board of Directors,
etc ........................................................ 73
29. Benefits of this Agreement .................................. 74
30. Severability ................................................ 74
31. Governing Law ............................................... 75
32. Counterparts ................................................ 75
33. Descriptive Headings ........................................ 76
ii
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 13, 1995 (the
"Agreement"), between BHA GROUP, INC., a Delaware corporation (the "Company"),
and BOATMEN'S TRUST COMPANY, a Missouri corporation (the "Rights Agent").
WHEREAS, effective December 13, 1995 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company authorized and
declared a distribution of one Right for each share of Class A Common Stock, par
value $0.01 per share, of the Company (the "Company Common Stock") outstanding
at the Close of Business on December 26, 1995 (the "Record Date") and has
authorized the issuance of one Right (as such number may hereinafter be adjusted
pursuant hereto) for each share of Company Common Stock issued between the
Record Date (whether originally issued or delivered from the Company's treasury)
and, except as otherwise provided in Section 22, the Distribution Date, each
Right initially representing the right to purchase upon the terms and subject to
the conditions hereinafter set forth one Unit (as hereinafter defined) of
Company Common Stock (the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
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(a) "Acquiring Person" shall mean any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity) which
shall be the Beneficial Owner of 20% or more of the shares of Company
Common Stock then outstanding.
(b) "Adjusted Purchase Price" has the meaning set
forth in Section 11(a)(ii).
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof.
(d) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own", any
securities:
(i) of which such Person or any of such Person's
Affiliates or Associates is considered to be a "beneficial
owner" under Rule 13d-3 of the General Rules and Regulations
under the Exchange Act (the "Exchange Act Regulations") as in
effect on the date hereof; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", any securities under this subparagraph (i)
as a result of an agreement, arrangement or understanding to
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vote such securities if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy given
in response to a proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the
Exchange Act and the Exchange Act Regulations, and (B) is not
reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report);
(ii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
of such other Person) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to subparagraph
(i) of this paragraph (c)) or disposing of such securities; or
(iii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the
satisfaction of conditions) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise;
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provided, however, that under this paragraph (c) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", (A)
securities tendered pursuant to a tender or exchange offer made in
accordance with Exchange Act Regulations by such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (B) securities that may be issued
upon exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities that may be issued upon exercise of
Rights from and after the occurrence of a Triggering Event, which
Rights were acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to Section
3(c) or Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made with respect
to any Original Rights.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in New York City are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York City time,
on the next succeeding Business Day.
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(g) "Common Stock" of any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power,
or, if such Person shall have no capital stock, the equity securities
or other equity interest having power to control or direct the
management of such Person.
(h) "Company Common Stock" has the meaning set forth
in the Whereas Clause.
(i) "Distribution Date" has the meaning set forth in
Section 3(a).
(j) "Expiration Date" has the meaning set forth in
Section 7(a).
(k) "Final Expiration Date" has the meaning set forth
in Section 7(a).
(l) "Person" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other
entity, as well as any syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act.
(m) "Purchase Price" has the meaning set forth in
Section 7(b).
(n) "Record Date" has the meaning set forth in the
Whereas Clause.
(o) "Right" has the meaning set forth in the Whereas
Clause.
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(p) "Rights Certificate" has the meaning set forth in
Section 3(a).
(q) "Rights Dividend Declaration Date" has the meaning
set forth in the Whereas Clause.
(r) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii)(A), (B) or (C) hereof.
(s) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(t) "Stock Acquisition Date" shall mean the first date of
public announcement (including, without limitation, the filing of any
report pursuant to Section 13(d) of the Exchange Act) by the Company or
an Acquiring Person that an Acquiring Person has become such.
(u) "Subsidiary" shall mean, with reference to any Person, any
other Person of which an amount of voting securities or equity
interests sufficient to elect at least a majority of the directors or
equivalent governing body of such other Person is beneficially owned,
directly or indirectly, by such Person, or otherwise controlled by such
first-mentioned Person.
(v) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
(w) "Unit" has the meaning set forth in Section 7(b).
SECTION 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
in accordance with the terms and conditions hereof, and the
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Rights Agent hereby accepts such appointment. With the consent of the Rights
Agent, the Company may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable.
SECTION 3. Issue of Rights Certificates. (a) Until the earlier
of (i) the Close of Business on the tenth Business Day (or such later date as
may be determined by action of the Board of Directors and of which the Company
will give the Rights Agent prompt written notice) after the Stock Acquisition
Date (provided that the Acquiring Person shall remain the Beneficial Owner of
20% or more of the shares of Company Common Stock outstanding on such date), and
(ii) the Close of Business on the tenth Business Day (or such later date as may
be determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person and of which the Company will give the Rights
Agent prompt written notice) after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries or any trustee
or fiduciary with respect to such plan acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the Exchange
Act Regulations or any successor rule, if upon consummation thereof such Person
would be the Beneficial Owner of 20% or more of the shares of Company Common
Stock then outstanding (the earlier of (i) and (ii) above being the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by
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the certificates for shares of Company Common Stock registered in the names of
the holders of shares of Company Common Stock as of and subsequent to the Record
Date (which certificates for shares of Company Common Stock shall be deemed also
to be certificates for Rights) and not by separate certificates, and (y) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Company Common Stock (including a transfer to the Company).
As soon as practicable after the Distribution Date, the Rights Agent will send
by first-class, insured, postage prepaid mail, to each record holder of shares
of Company 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
rights certificates, in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Company Common Stock so
held, subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Company Common Stock has been made pursuant
to Section 11(p) hereof, at the time of distribution of the Rights Certificates,
the Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
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(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Common Stock, in a
form which may be appended to certificates that represent shares of Company
Common Stock, in substantially the form attached hereto as Exhibit B (the
"Summary of Rights"), by first-class, postage prepaid mail, to each record
holder of shares of Company 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.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock which are issued (including any shares of
Company Common Stock held in treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates,
representing such shares of Company Common Stock, issued after the Record Date
shall bear the following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement between
BHA GROUP, INC. (the "Company") and BOATMEN'S TRUST COMPANY (the
"Rights Agent") dated as of December 13, 1995 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal office of the stock transfer
administration office of the Rights Agent. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and
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will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any 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 become null and void."
With respect to certificates representing shares of Company
Common Stock (whether or not such certificates include the foregoing legend or
have appended to them the Summary of Rights), until the earlier of the
Distribution Date and the Expiration Date, the Rights associated with the shares
of Company Common Stock represented by such certificates shall be evidenced by
such certificates alone and registered holders of the shares of Company Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the shares of Company Common Stock represented by such
certificates.
SECTION 4. Form of Rights Certificates. (a) The
Rights Certificates (and the forms of election to purchase,
assignment and certificate to be printed on the reverse thereof)
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shall each be substantially in the form set forth in Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or any rule or regulation thereunder or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of Units of Company Common Stock as shall be set forth
therein at the price set forth therein, but the amount and type of securities,
cash or other assets that may be acquired upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that
represents Rights beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) which becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or
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any such Associate or Affiliate) to holders of equity interests in such
Acquiring Person (or such Associate or Affiliate) or to any Person with whom
such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred Rights,
shares of Company Common Stock or the Company or (B) a transfer which a majority
of the Company's Board of Directors has determined to be part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof shall, upon the written direction of a majority
of the Company's Board of Directors, contain (to the extent feasible) the
following legend:
The Rights represented by this Rights 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). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
SECTION 5. Countersignature and Registration. (a) Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its Chief Executive Officer, its
President or its Executive Vice President, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Rights Certificates may be manual or
facsimile. Rights Certificates bearing the manual or facsimile signatures of the
individuals who were at any time the proper officers of the Company shall bind
the Company,
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notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the countersignature of such Rights Certificates or did not
hold such offices at the date of such Rights Certificates. No Rights Certificate
shall be entitled to any benefit under this Agreement or be valid for any
purpose unless there appears on such Rights Certificate a countersignature duly
executed by the Rights Agent by manual signature of an authorized officer, and
such countersignature upon any Rights Certificate shall be conclusive evidence,
and the only evidence, that such Rights Certificate has been duly countersigned
as required hereunder.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for surrender of Rights
Certificates upon exercise or transfer, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the name and
address of each holder of the Rights Certificates, the number of Rights
evidenced on its face by each Rights Certificate and the date of each Rights
Certificate.
SECTION 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or Certificates
may be transferred, split up, combined or exchanged
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for another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of Units of Company Common Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be) as
the Rights Certificate or Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged
at the office 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 Rights Certificate until
the registered holder shall have completed and executed the certificate set
forth in the form of assignment on the reverse side of such Rights Certificate
and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) of the Rights represented by such
Rights Certificate or Affiliates or Associates thereof as the Company shall
reasonably request; whereupon the Rights Agent shall, subject to the provisions
of Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any
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transfer, split up, combination or exchange of Rights
Certificates.
(b) If a Rights Certificate shall be mutilated, lost, stolen
or destroyed, upon request by the registered holder of the Rights represented
thereby and upon payment to the Company and the Rights Agent of all reasonable
expenses incident thereto, there shall be issued, in exchange for and upon
cancellation of the mutilated Rights Certificate, or in substitution for the
lost, stolen or destroyed Rights Certificate, a new Rights Certificate, in
substantially the form of the prior Rights Certificate, of like tenor and
representing the equivalent number of Rights, but, in the case of loss, theft or
destruction, only upon receipt of evidence satisfactory to the Company and the
Rights Agent of such loss, theft or destruction of such Rights Certificate and,
if requested by the Company or the Rights Agent, indemnity also satisfactory to
it.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) Prior to the earlier of (i) the Close of Business on the tenth
anniversary hereof (the "Final Expiration Date"), and (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier of (i) and
(ii) being the "Expiration Date"), the registered holder of any Rights
Certificate may, subject to the provisions of Sections 7(e) and 9(c) hereof,
exercise the Rights evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of
election to
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purchase and the certificate on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price (as hereinafter defined)
for the number of Units of Company Common Stock (or, following a Triggering
Event, other securities, cash or other assets, as the case may be) for which
such surrendered Rights are then exercisable.
(b) The purchase price for each one tenth of a share (each
such one tenth of a share being a "Unit") of Company Common Stock upon exercise
of Rights shall be $[__.__](1), subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof (such purchase price, as so adjusted,
being the "Purchase Price"), and shall be payable in accordance with paragraph
(c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with the Rights Agent, certificates
representing the shares of Company Common Stock that may be acquired upon
exercise of the Rights and shall cause the Rights Agent to enter into an
agreement pursuant to which the Rights Agent shall issue the shares of Company
Common Stock so deposited. Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised,
--------
(1) The initial Purchase Price should be a price which the Company can
support as representing the potential long-term value of one tenth of a
share of the Company Common Stock.
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of the Purchase Price for the Units of Company Common Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be) to
be purchased thereby as set forth below and an amount equal to any applicable
transfer tax or evidence satisfactory to the Company of payment of such tax, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
requisition from the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14 hereof, (ii) cause the shares of
Company Common Stock to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iii) after receipt thereof, deliver such cash,
if any, to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate. The payment of the Purchase Price
(as such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be
made in cash or by certified or bank check or money order payable to the order
of the Company.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing the Rights remaining
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unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the provisions of
Section 14 hereof.
(e) 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) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which 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 any such Associate or Affiliate) or to
any Person with whom the Acquiring Person (or such Associate or Affiliate) has
any continuing agreement, arrangement or understanding regarding the transferred
Rights, shares of Company Common Stock or the Company or (B) a transfer which a
majority of the Company's Board of Directors has determined to be part of a
plan, arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall be null and void without any further
action,
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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 ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights or any other Person as a result of its failure
to make any determination under this Section 7(e) or such Section 4(b) with
respect to an Acquiring Person or its Affiliates, Associates or transferees.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed the certificate
following the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
SECTION 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
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form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights 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 retirement, and the Rights Agent shall so cancel and retire,
any Rights Certificates acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all cancelled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy such cancelled
Rights 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 shall at all times prior to the Expiration Date cause to be reserved
and kept available, out of its authorized and unissued shares of Company Common
Stock, the number of shares of Company Common Stock that, as provided in this
Agreement, will be sufficient to permit the exercise in full of all outstanding
Rights. Upon the occurrence of any events resulting in an increase in the
aggregate number of shares of Company Common Stock (or other equity securities
of the Company) issuable upon exercise of all outstanding Rights above the
number then reserved, the Company shall make appropriate increases in the number
of shares so reserved.
(b) If the shares of Company Common Stock to be issued and
delivered upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall during the
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period from the Distribution Date through the Expiration Date use its best
efforts to cause all securities reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) hereof of the
consideration to be delivered by the Company upon exercise of the Rights or, if
so required by law, as soon as practicable following the Distribution Date (such
date being the "Registration Date"), to file a registration statement on an
appropriate form under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities that may be acquired upon exercise of the
Rights (the "Registration Statement"), (ii) to cause the Registration Statement
to become effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date, and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws.
21
(d) The Company shall take such action as may be necessary to
ensure that all shares of Company Common Stock (and, following the occurrence of
a Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer
tax imposed in connection with the issuance or delivery of the Rights
Certificates or upon the exercise of Rights; provided, however, the Company
shall not be required to pay any such tax imposed in connection with the
issuance or delivery of shares of Company Common Stock, or any certificates for
such shares of Company Common Stock (or, following the occurrence of a
Triggering Event, any other securities, cash or assets, as the case may be) to
any person other than the registered holder of the Rights Certificates
evidencing the Rights surrendered for exercise. The Company shall not be
required to issue or deliver any certificates for shares of Company Common Stock
(or, following the occurrence of a Triggering Event, any other securities, cash
or assets, as the case may be) to, or in a name other than that of, the
registered holder upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
22
SECTION 10. Company Common Stock Record Date. Each Person in
whose name any certificate for shares of Company Common Stock (or, following the
occurrence of a Triggering Event, other securities) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the shares of Company Common Stock (or, following the occurrence of a
Triggering Event, other securities) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Company Common Stock (or,
following the occurrence of a Triggering Event, other securities) transfer books
of the Company are closed, such Person shall be deemed to have become the record
holder of such securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Company Common Stock (or, following the
occurrence of a Triggering Event, other securities) transfer books of the
Company are open and, further provided, however, that if delivery of shares of
Company Common Stock is delayed pursuant to Section 9(c) hereof, such Persons
shall be deemed to have become the record holders of such shares of Company
Common Stock only when such shares first become deliverable. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to securities for which
23
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Company Common
Stock payable in shares of Company Common Stock, (B) subdivide the
outstanding Company Common Stock, (C) combine the outstanding Company
Common Stock into a smaller number of shares, or (D) issue any shares
of its capital stock in a reclassification of the Company Common Stock
(including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Company Common
Stock or capital stock, as the case may be, issuable on such date upon
exercise of the Rights, shall be
24
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares
of Company Common Stock or capital stock, as the case may be, which, if
such Right had been exercised immediately prior to such date, such
holder would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Agreement, directly or indirectly, (1) shall merge
into the Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of
such merger or combination and Company Common Stock shall
remain outstanding and unchanged, (2) shall, in one
transaction or a series of transactions, transfer any assets
to the Company or to any of its Subsidiaries in exchange (in
whole or in part) for shares of Company Common Stock, for
other
25
equity securities of the Company or any such Subsidiary, or
for securities exercisable for or convertible into shares of
equity securities of the Company or any of its Subsidiaries
(whether Company Common Stock or otherwise) or otherwise
obtain from the Company or any of its Subsidiaries, with or
without consideration, any additional shares of such equity
securities or securities exercisable for or convertible into
such equity securities (other than pursuant to a pro rata
distribution to all holders of Company Common Stock), (3)
shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with (as
the case may be) the Company or any of its Subsidiaries or any
employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such
plan acting in such capacity, assets (including securities) on
terms and conditions less favorable to the Company or such
Subsidiary or plan than those that could have been obtained in
arm's length negotiations with an unaffiliated third party,
other than pursuant to a transaction set forth in Section
13(a) hereof, (4) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of,
in one transaction or a series of transactions, to, from
26
or with the Company or any of the Company's Subsidiaries or
any employee benefit plan maintained by the Company or any of
its Subsidiaries or any trustee or fiduciary with respect to
such plan acting in such capacity (other than transactions, if
any, consistent with those engaged in, as of the date hereof,
by the Company and such Acquiring Person or such Associate or
Affiliate), assets (including securities) having an aggregate
fair market value of more than $10,000,000, other than
pursuant to a transaction set forth in Section 13(a) hereof,
(5) shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the
Company or any of its Subsidiaries or any employee benefit
plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in
such capacity, any material trademark or material service
▇▇▇▇, other than pursuant to a transaction set forth in
Section 13(a) hereof, (6) shall receive, or any designee,
agent or representative of such Acquiring Person or any
Affiliate or Associate of such Acquiring Person shall receive,
any compensation from the Company or any of its Subsidiaries
other than compensation for full-time employment as a regular
employee at rates in accordance
27
with the Company's (or its Subsidiaries') past practices, (7)
shall receive the benefit, directly or indirectly (except
proportionately as a holder of Company Common Stock or as
required by law or governmental regulation), of any loans,
advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantage provided by the Company
or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such
capacity; or
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan
maintained by the Company or any of its Subsidiaries or any
trustee or fiduciary with respect to such plan acting in such
capacity) shall become the Beneficial Owner of 20% or more of
the shares of Company Common Stock then outstanding, other
than pursuant to any transaction set forth in Section 13(a)
hereof, and shall remain the Beneficial Owner of 20% or more
of the shares of Company Common Stock outstanding as of the
Distribution Date; or
(C) during such time as there is an
Acquiring Person, there shall be any reclassification of
securities (including any reverse stock split), or
recapitalization of the Company, or any merger or
28
consolidation of the Company with any of its Subsidiaries or
any other transaction or series of transactions involving the
Company or any of its Subsidiaries, other than a transaction
or transactions to which the provisions of Section 13(a) apply
(whether or not with or into or otherwise involving an
Acquiring Person), which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity
securities of the Company or any of its Subsidiaries which is
directly or indirectly beneficially owned by any Acquiring
Person or any Associate or Affiliate of any Acquiring Person;
then, immediately upon the date of the occurrence of an event described
in Section 11(a)(ii)(A)-(C) hereof, proper provision shall be made so
that each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof and for a purchase price equal to ten times the then current
Purchase Price (the "Adjusted Purchase Price"), in lieu of the number
of Units of Company Common Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event,
such number of Units of Company Common Stock as shall have a current
market price (determined pursuant to Section 11(d) hereof) on the date
of such occurrence equal to two times the Adjusted
29
Purchase Price (such Units of Company Common Stock being the
"Adjustment Shares").
(iii) in the event that the number of shares of Company Common
Stock which are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company, by the vote of a
majority of the Company's Board of Directors, shall either (x) take all
action necessary, including calling a meeting of shareholders seeking
approval, to cause sufficient additional Company Common Stock or
Company Common Stock Equivalents (as such term is defined below) to be
authorized, or (y) (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess being the "Spread"),
and (B) with respect to each Right, make adequate provision to
substitute for such Adjustment Shares, upon payment of the applicable
Purchase Price in the sole discretion of a majority of the Company's
Board of Directors, either (1) cash, (2) a reduction in the Purchase
Price, (3) other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock having
comparable economic value and voting rights as the Company Common Stock
(such other shares
30
being "Company Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such
aggregate value has been determined by a majority of the Company's
Board of Directors, after receiving advice from a nationally recognized
investment banking firm; provided, however, that if the Company shall
not have made adequate provision to deliver value pursuant to clause
(B) above within thirty days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the
later of (x) and (y) being referred to herein as the "Section
11(a)(iii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Company Common Stock
(to the extent available) and then, if necessary, cash, which shares of
Company Common Stock and/or cash shall have an aggregate value equal to
the Spread. To the extent that the Company determines that some action
needs to be taken pursuant to the first sentence of this Section
11(a)(iii), the Company shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a Unit of Company
Common Stock shall be the current market price (as
31
determined pursuant to Section 11(d) hereof) per Unit of Company Common
Stock on the Section 11(a)(iii) Trigger Date and the value of any
Company Common Stock Equivalents shall be deemed to have the same value
as the Company Common Stock
on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Company
Common Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five calendar days after such record date) shares
of Company Common Stock or shares of Company Common Stock Equivalents
or securities convertible into Company Common Stock or Company Common
Stock Equivalents at a price per share of Company Common Stock or per
share of Company Common Stock Equivalents (or having a conversion price
per share, if a security convertible into Company Common Stock or
Company Common Stock Equivalents) less than the current market price
(as determined pursuant to Section 11(d) hereof) per share of Company
Common Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the sum of the number of shares of
Company Common Stock outstanding on such record date plus the number of
shares of Company Common Stock which the aggregate offering price of
the total number of shares of Company
32
Common Stock and/or Company Common Stock Equivalents so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of shares of
Company Common Stock outstanding on such record date plus the number of
additional shares of Company Common Stock and/or Company Common Stock
Equivalents to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash,
the value of such consideration shall be as determined in good faith by
a majority of the Company's Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall
be binding on the Rights Agent and the holders of the Rights. Shares of
Company Common Stock owned by or held for the account of the Company or
any Subsidiary shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date
had not been fixed.
33
(c) In case the Company shall fix a record date for a
distribution to all holders of shares of Company Common Stock
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in shares of Company
Common Stock, but including any dividend payable in stock other than
Company Common Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Company
Common Stock on such record date less the fair market value (as
determined in good faith by a majority of the Company's Board of
Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the
holder of the Rights) of the cash, assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants
distributable in respect of a share of Company Common Stock and the
denominator of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) per
34
share of Company Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" per share of Company Common Stock or Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such shares for the ten consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, if prior to the expiration of such requisite
ten Trading Day period the issuer announces either (A) a dividend or
distribution on such shares payable in such shares or securities
convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such shares, then,
following the ex-dividend date for such dividend or the record date for
such subdivision, as the case may be, the "current market price" shall
be properly adjusted to take into account such event. The closing price
for each day shall be, if the shares are listed and admitted to trading
on a national securities exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on
35
which such shares are listed or admitted to trading or, if such shares
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system then in use,
or, if on any such date such shares are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such shares
selected by a majority of the Company's Board of Directors. If on any
such date no market maker is making a market in such shares, the fair
value of such shares on such date as determined in good faith by a
majority of the Company's Board of Directors shall be used. If such
shares are not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share as
determined in good faith by a majority of the Company's Board of
Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. The
term "Trading Day" shall mean, if such shares are listed or admitted to
trading on any national securities exchange, a day on which the
principal national securities exchange on which such shares are listed
or admitted to trading is open for the
36
transaction of business or, if such shares are not so listed
or admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per Unit of Company Common Stock shall be
conclusively deemed to be an amount equal to the current market price
per share of Company Common Stock divided by ten (as such amount may be
appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to Company Common Stock occurring
after the date of this Agreement).
(iii) For the purpose of any computation hereunder, the
"current market price" per share of Company Common Stock Equivalent
shall be conclusively deemed to be an amount equal to the current
market price per share of Company Common Stock (as such amount may be
appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to Company Common Stock occurring
after the date of this Agreement).
(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 l% in the
Purchase Price; provided, however, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or
37
to the nearest ten-thousandth of a share of Company Common Stock or
Common Stock or other share or one-millionth of a share of Company
Common Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment and (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Company Common 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 Company Common Stock contained in Sections 11(a), (b),
(c), (d), (e), (g), (h), (i), (j), (k), (l) and (m) and the provisions
of Sections 7, 9, 10, 13 and 14 hereof with respect to the Company
Common Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase at the adjusted Purchase Price, the number of Units
of Company Common Stock (or other securities or amount of cash or
38
combination thereof) that may be acquired from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Units of Company Common Stock
(calculated to the nearest one one-thousandth of a Unit) obtained by
(i) multiplying (x) the number of Units of Company Common Stock covered
by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of Units of Company Common Stock
that may be acquired upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of Units of Company Common Stock for which a
Right was exercisable immediately prior to such adjustment.
39
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 Rights Certificates have been issued,
shall be at least ten days later than the date of such public
announcement. If Rights 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 Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights
40
to which such holders shall be entitled after such adjustment. Rights
Certificates to be so 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 Rights 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 Units of Company Common Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per Unit
and the number of Units of Company Common Stock which was expressed in
the Initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of
Units of Company Common Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and
legally issue such fully paid and non-assessable number of Units of
Company Common 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
41
elect to defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date of that number of
Units of Company Common Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the number of Units of Company Common Stock and shares of other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities 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 in their good
faith judgment a majority of the Company's Board of Directors shall
determine to be advisable in order that any (i) consolidation or
subdivision of the Company Common Stock, (ii) issuance wholly for cash
of any shares of Company Common Stock at less than the current market
price, (iii) issuance wholly for cash of shares of Company Common Stock
or securities which by their terms are convertible into or exchangeable
for shares of
42
Company Common Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by
the Company to holders of its Company Common Stock, shall not be
taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of
the Company in a transaction which is not prohibited by Section 11(o)
hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which is not prohibited by
Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which is
not prohibited by Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation,
merger or sale, the Person which constitutes,
43
or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have distributed or otherwise transferred to its
shareholders or other persons holding an equity interest in such Person
Rights previously owned by such Person or any of its Affiliates and
Associates; provided, however, this Section 11(n) shall not affect the
ability of any Subsidiary of the Company to consolidate with, merge
with or into, or sell or transfer assets or earning power to, any other
Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except
as permitted by Section 23 or Section 26 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary notwithstanding
in the event that the Company shall at any time after the Rights
Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Company Common Stock
payable in shares of Company Common Stock, (ii) subdivide the
outstanding shares of Company Common Stock, (iii) combine the
outstanding shares of Company Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a
reclassification of Company Common Stock
44
(including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each share of
Company Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter associated with each
share of Company Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with
each share of Company Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of
Company Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of
shares of Company Common Stock outstanding immediately following the
occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, 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 the transfer agent
for the Company Common Stock, a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or if prior to the
Distribution Date, to each holder of a certificate representing shares of
Company Common Stock) in
45
accordance with Section 25 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event that, following the Stock Acquisition
Date, directly or indirectly, either (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a Subsidiary of the Company in
a transaction which is not prohibited by Section 11(o) hereof), and the Company
shall not be the continuing or surviving corporation of such consolidation or
merger (y) any Person (other than a Subsidiary of the Company in a transaction
which is not prohibited by Section 11(o) hereof) shall consolidate with, or
merge with or into, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection with
such consolidation or merger, all or part of the outstanding shares of Company
Common Stock shall be converted into or exchanged for stock or other securities
of any other Person or cash or any other property, or (z) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) to any Person or Persons (other than the Company or any of
its Subsidiaries in one or more transactions each of which is not prohibited by
Section 11(o) hereof), in one or more transactions, assets or earning power
46
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) (any such event being a "Section 13 Event"),
then, and in each such case, proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof and for the Adjusted
Purchase Price, such number of validly authorized and issued, fully paid and
non-assessable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), which shares shall not be subject to any liens,
encumbrances, rights of first refusal, transfer restrictions or other adverse
claims, as shall have a current market price (determined pursuant to Section
11(d) hereof) on the date of consummation of such Section 13 Event equal to two
times the Adjusted Purchase Price; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply only
to such Principal Party following the first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as may be necessary to
ensure that the provisions of this Agreement shall thereafter be applicable to
its shares of
47
Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no further effect following
the first occurrence of any Section 13 Event. The provisions of this Section 13
shall not apply to any Section 13 Event that was approved by the Board of
Directors prior to the consummation of such Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), (A)
the Person that is the issuer of any securities into which
shares of Company Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the
issuer of Common Stock that has the highest aggregate current
market price (determined pursuant to Section 11(d) hereof) and
(B) if no securities are so issued, the Person that is the
other party to such merger or consolidation, or, if there is
more than one such Person, the Person the Common Stock of
which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the largest portion of the assets
or earning power transferred pursuant to such transaction or
transactions, or, if each Person
48
that is a party to such transaction or transactions receives
the same portion of the assets or earning power transferred
pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power
cannot be determined, whichever Person the Common Stock of
which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof);
provided, however, that in any such case, (1) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve-month period registered under Section 12 of the
Exchange Act ("Registered Common Stock"), or such Person is not a
corporation, and such Person is a direct or indirect Subsidiary of
another Person that has Registered Common Stock outstanding, "Principal
Party" shall refer to such other Person; (2) if the Common Stock of
such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is a direct or indirect Subsidiary of
another Person but is not a direct or indirect Subsidiary of another
Person which has Registered Common Stock outstanding, "Principal Party"
shall refer to the ultimate parent entity of such first-mentioned
Person; (3) if the Common Stock of such Person is not Registered Common
Stock or such Person is not a corporation, and such Person is directly
or indirectly controlled by more than one Person, and one or more of
such
49
other Persons has Registered Common Stock outstanding, "Principal
Party" shall refer to whichever of such other Persons is the issuer of
the Registered Common Stock having the highest aggregate current market
price (determined pursuant to Section 11(d) hereof); and (4) if the
Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such other Persons have
Registered Common Stock outstanding, "Principal Party" shall refer to
whichever ultimate parent entity is the corporation having the greatest
shareholders equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is the
entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have
not been issued or reserved for issuance to permit the exercise in full
of the Rights in accordance with this Section 13, and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for
the terms set forth in paragraphs (a) and (b) of this Section 13 and
further providing that the Principal Party will:
50
(i) (A) file on an appropriate form, as soon as is
practicable following the execution of such agreement, a
registration statement under the Securities Act with respect
to the Common Stock that may be acquired upon exercise of the
Rights, (B) cause such registration statement to remain
effective (and to include a prospectus complying with the
requirements of the Securities Act) until the Expiration Date,
and (C) as soon as practicable following the execution of such
agreement, take such action as may be required to ensure that
any acquisition of such Common Stock upon the exercise of the
Rights complies with any applicable state security or "blue
sky" laws; 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. (d) In
case the Principal Party which is to be a party
to a transaction referred to in this Section 13 has a provision in any
of its authorized securities or in its Certificate of Incorporation or
By-laws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to
issue, in connection with, or as a consequence of, the consummation of
a transaction referred to in this Section 13, shares of
51
Common Stock of such Principal Party at less than the then current
market price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such
Principal Party at less than such then current market price (other than
to holders of Rights pursuant to this Section 13) or (ii) providing for
any special payment, tax or similar provisions in connection with the
issuance of the Common Stock of such Principal Party pursuant to the
provisions of this Section 13; then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, waived or
amended, or that the authorized securities shall be redeemed, so that
the applicable provision will have no effect in connection with, or as
a consequence of, the consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In
the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not,
theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
52
SECTION 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Rights Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by a majority of the
Company's Board of Directors. If on any such date no such market maker is making
a market in the Rights, the fair value of the Rights on
53
such date as determined in good faith by a majority of the Company's Board of
Directors shall be used and such determination shall be described in a statement
filed with the Rights Agent and the holders of the Rights.
(b) The Company shall not be required to issue fractions of
shares of Company Common Stock upon exercise of the Rights or to distribute
certificates which evidence such fractional shares of Company Common Stock. In
lieu of such fractional shares of Company Common Stock, the Company may pay to
the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
then current market price of a share of Company Common Stock on the day of
exercise, determined in accordance with Section 11(d) hereof.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
SECTION 15. Rights of Action. All rights of action in respect
of this Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18 hereof, are vested in the respective registered holders
of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of certificates representing shares of Company Common Stock); and any
registered holder of a Rights Certificate (or, prior to the Distribution Date,
of a certificate representing shares of Company Common Stock), without the
consent of the
54
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of a certificate representing shares of Company 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 or any
other Person to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such
Rights 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 shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
SECTION 16. Agreement of Rights 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 Company
Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent
55
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates duly
executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Company
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Company Common Stock certificate
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be 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 any other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company
56
must use its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as promptly as practicable.
SECTION 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Company Common Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, except as provided in Section 24
hereof, to receive notice of meetings or other actions affecting shareholders,
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights 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 reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses, including reasonable fees and disbursements of its
counsel, incurred in connection with the execution and administration of this
Agreement and the exercise and performance of its duties
57
hereunder. The Company shall indemnify the Rights Agent for, and hold it
harmless against, any loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability hereunder.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Company Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to have
been signed, executed and, where necessary, verified or acknowledged by the
proper Person or Persons.
SECTION 19. Merger or Consolidation or Change of Name of
Rights Agent. (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 shareholder services businesses of the Rights Agent or
any successor Rights Agent, shall be the successor to
58
the Rights Agent under this Agreement without the execution or filing of any
document or any further act on the part of any of the parties hereto; provided,
however, that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights 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 Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights 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 Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
59
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
Rights 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 or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be specified herein) may be deemed to
be conclusively proved and established by a certificate signed by any executive
officer of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
60
reason of any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same (except as to
its countersignature on such Rights Certificates), 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 have any responsibility for the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or for the validity or execution of any
Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure by the
Company to satisfy conditions contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt by the Rights Agent of the
certificate describing any such adjustment contemplated by Section 12); 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 Company Common Stock or
any other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Company Common Stock or any other
securities will, when so
61
issued, be validly authorized and issued, fully paid and non-
assessable.
(f) The Company shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further acts, instruments and assurances as may reasonably be required by the
Rights Agent for the performance by the Rights Agent of its duties under this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any executive officer of the Company, and to apply to any executive officer of
the Company for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer. Any application by
the Rights Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Rights Agreement and the date on and/or
after which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by or omission of, the
Rights Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall not be less
than five Business Days after the date any such officer of the Company actually
receives such application, unless any, such officer
62
shall have consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents.
(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 or in the exercise of its rights
hereunder if the Rights Agent shall have 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 Rights Certificate
63
surrendered to, the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed, not signed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without first
consulting with the Company. If such certificate has been completed and signed
and shows a negative response to clauses 1 and 2 of such certificate, unless
previously instructed otherwise in writing by the Company (which instructions
may impose on the Rights Agent additional ministerial responsibilities, but no
discretionary responsibilities), the Rights Agent may assume without further
inquiry that the Rights Certificate is not owned by a,person described in
Section 4(b) or Section 7(e) hereof and shall not be charged with any knowledge
to the contrary.
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 thirty days' prior notice in writing mailed to the Company, and
to the transfer agent of the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty
days' prior notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to the transfer agent of the Company Common
Stock, by registered or
64
certified mail, and to the holders of the Rights 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 thirty
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 Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then any
registered holder of any Rights 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
any state of the United States in good standing, shall be authorized to do
business as a banking institution in the State of New York, shall be authorized
under such laws to exercise corporate trust or stock transfer powers, shall be
subject to supervision or examination by federal or state authorities and shall
have at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (b) an Affiliate of a corporation described
in clause (a). 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
65
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 the transfer agent of
the Company Common Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent.
SECTION 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by a majority of the Company's
Board of Directors to reflect any adjustment or change made in accordance with
the provisions of this Agreement in the Purchase Price or the number or kind or
class of shares or other securities or property that may be acquired under the
Rights Certificates. In addition, in connection with the issuance or sale of
shares of Company Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (a) shall, with respect to shares of Company Common
Stock so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the
66
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by a
majority of the Company's Board of Directors, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the person to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. Redemption and Termination. (a) Subject to Section
30 hereof, the Company may, at its option, by action of a majority of the
Company's Board of Directors, at any time prior to the earlier of (i) the
Distribution Date, or (ii) the Final Expiration Date, redeem all but not less
than all of 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 the "Redemption Price"), and the Company may, at its option, by
action of a majority of the Company's Board of Directors, pay the Redemption
Price either in shares of Company Common Stock (based on the "current market
67
price", as defined in Section 11(d) hereof, of the shares of Company Common
Stock at the time of redemption) or cash.
(b) Immediately upon the action of a majority of the Company's
Board of Directors ordering the redemption of the Rights, evidence of which
shall be filed with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of a majority of the Company's
Board of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for
Company Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made.
SECTION 24. Notice of Certain Events. (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 Company Common Stock or to make
any other distribution to the holders of Company Common Stock (other than a
regular quarterly cash dividend out of earnings or retained earnings of
68
the Company), (ii) to offer to the holders of Company Common Stock rights or
warrants to subscribe for or to purchase any additional shares of Company Common
Stock or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Company Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Company Common Stock), (iv) to effect any consolidation or merger into or with
any other Person (other than a Subsidiary of the Company in a transaction which
is not prohibited by Section 11(o) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which is not prohibited by Section 11(o)
hereof),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
Rights Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of
69
Company Common Stock, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at least
twenty (20) days prior to the record date for determining holders of the shares
of Company Common Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Company Common Stock whichever shall be the earlier; provided,
however, no such notice shall be required pursuant to this Section 24, if any
Subsidiary of the Company effects a consolidation or merger with or into, or
effects a sale or other transfer of assets or earnings power to, any other
Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, 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) hereof.
SECTION 25. Notices. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in writing
(including by telex, telegram or cable) and mailed or sent or delivered, if to
the Company, at its address at:
70
BHA Group, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
and if to the Rights Agent, at its address at:
Boatmen's Trust Company
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Stock Transfer Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
SECTION 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, 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 Company Common Stock. From and after the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen
71
any time period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, however, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) subject to
Section 30 hereof, a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company or, so
long as any Person is an Acquiring Person hereunder, from the majority of the
Company's Board of Directors which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price, the Purchase Price, the Expiration Date or
the number of Units of Company Common Stock for which a Right is exercisable
without the approval of a majority of the Company's Board of Directors. Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Company Common Stock.
72
SECTION 27. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Company Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Company 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)
of the Exchange Act Regulations as in effect on the date hereof. Except as
otherwise specifically provided herein, the Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power (i) to interpret
the provisions of this Agreement, and (ii) to make all determinations deemed
necessary or advisable for the administration of this 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 by a majority of the Company's Board of
Directors in good faith shall (x) be final, conclusive and binding on the
Company, the
73
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board or any member thereof to any liability to the holders of the
Rights.
SECTION 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of shares of Company 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 Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock).
SECTION 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Company's Board of 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 and the Rights shall not then
74
be redeemable, 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
Business Day following the date of such determination by a majority of the
Company's Board of Directors.
SECTION 31. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be governed by, and construed in
accordance with, the laws of the State of Delaware applicable to contracts
executed in and to be performed entirely in such State.
SECTION 32. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same instrument.
75
SECTION 33. Descriptive Headings. The headings
contained in this Agreement are for descriptive purposes only and
shall not affect in any way the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the date first above written.
ATTEST: BHA GROUP, INC.
By _______________________ By ______________________
Name: Name:
Title: Title:
ATTEST: BOATMEN'S TRUST COMPANY
By _______________________ By ______________________
Name: Name:
Title: Title:
76
EXHIBIT A
EXHIBIT 4.1
[Form of Rights Certificate]
Certificate No. ____________ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS
AGREEMENT REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS 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 REFERRED TO
BELOW). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.]*
Rights Certificate
BHA GROUP, INC.
This certifies that ________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of December 13, 1995 (the "Rights Agreement";
terms defined therein are used herein with the same meaning unless otherwise
defined herein) between BHA Group, Inc. a Delaware corporation (the "Company"),
and Boatmen's Trust Company, a Missouri corporation, as Rights Agent (which term
shall include any successor Rights
--------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
2
Agent under the Rights Agreement), to purchase from the Company at any time
after the Distribution Date and prior to the Expiration Date at the office of
the Rights Agent, one tenth of a fully paid and non-assessable share of Class A
Common Stock, par value $.01 per share (the "Common Stock"), of the Company at
the Purchase Price initially of [$__ see Rights Agreement Section 7(b)] per one
tenth share (each such one tenth of a share being a "Unit") of Common Stock,
upon presentation and surrender of this Rights Certificate with the Election to
Purchase and related certificate duly executed. The number of Rights evidenced
by this Rights Certificate (and the number of Units which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per Unit set forth
above shall be subject to adjustment in certain events as provided in the Rights
Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the
Rights evidenced by this Rights Certificate are beneficially owned by an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person or,
under certain circumstances described in the Rights Agreement, a transferee of
any such Acquiring Person, Associate or Affiliate, 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.
In certain circumstances described in the Rights Agreement,
the rights evidenced hereby may entitle the registered
3
holder thereof to purchase capital stock of an entity other than the Company or
receive preferred stock, cash or other assets, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms and
conditions or the Rights Agreement, which terms 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 Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available from the Company upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered. If this Rights Certificate shall be exercised
in part, the registered holder shall be entitled to receive, upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the
4
Company under certain circumstances at its option at a redemption price of $.01
per Right, payable at the Company's option in cash or in Common Stock of the
Company, subject to adjustment in certain events as provided in the Rights
Agreement.
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Common Stock or of any other securities which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
5
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ________ ___, 199_.
ATTEST: BHA GROUP, INC.
By __________________________ By ___________________________
Name: Name:
Title: Title:
Countersigned:
BOATMEN'S TRUST COMPANY, as
Rights Agent
By __________________________
Name:
Title:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED ____________________________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ________________, 199_
-----------------------------------
Signature
Signature Guaranteed:
2
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _________________, 199_ ------------------------------
Signature
Signature Guaranteed:
-------------------------------------------------------------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
In the event the certification set forth above is not
completed, the Company will deem the beneficial owner of the Rights evidenced by
this Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an Assignment,
will affix a legend to that effect on any Rights Certificates issued in exchange
for this Rights Certificate.
3
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: BHA GROUP, INC.
The undersigned hereby irrevocably elects to exercise
________________________ Rights represented by this Rights Certificate to
purchase the Units of Common Stock issuable upon the exercise of the Rights (or
such other securities of the Company or of any other person or other property
which may be issuable upon the exercise of the Rights) and requests that
certificates for such Units be issued in the name of and delivered to:
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
Please insert social security
or other identifying
number: ______________________________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
Please insert social security
or other identifying
number: ______________________________________________________________________
Dated: _____________, 199_
-----------------------------------
Signature
Signature Guaranteed:
EXHIBIT B
EXHIBIT 4.1
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On December 13, 1995, the Board of Directors of BHA Group,
Inc. (the "Company") declared a distribution of one Right for each outstanding
share of Class A Common Stock, par value $.01 per share (the "Company Common
Stock"), to stockholders of record at the close of business on December 26, 1995
and for each share of Company Common Stock issued (including shares distributed
from the treasury) by the Company thereafter and prior to the Distribution Date.
Each Right entitles the registered holder, subject to the terms of the Rights
Agreement (as defined below), to purchase from the Company one tenth of a share
(a "Unit") of Company Common Stock, at a Purchase Price of $7.00 per Unit,
subject to adjustment. The Purchase Price is payable in cash or by certified or
bank check or money order payable to the order of the Company. The description
and terms of the Rights are set forth in a Rights Agreement between the Company
and Boatmen's Trust Company, as Rights Agent (the "Rights Agreement").
A Copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an exhibit to a Registration Statement on
Form 8-A dated December 21, 1995 (the "Form 8-A"). Copies of the Rights
Agreement are 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 all the provisions of the Rights Agreement,
including the definitions therein of certain terms, which Rights Agreement is
incorporated herein by reference.
The Rights Agreement
Initially, the Rights will attach to all certificates
representing shares of outstanding Company Common Stock, and no separate Rights
Certificates will be distributed. The Rights will separate from the Company
Common Stock and the Distribution Date will occur upon the earlier of (i) 10
business days (or such later date as may be determined by action of the Board of
Directors) following a public announcement (the date of such announcement being
the "Stock Acquisition Date") that a person or group of affiliated or associated
persons (other than the Company, any Subsidiary of the Company or any employee
benefit plan of the Company or such Subsidiary) (an "Acquiring Person") has
acquired, obtained the right to acquire, or otherwise obtained beneficial
ownership of 20% or more of the then outstanding shares of Company Common Stock
(provided that such person or group remains the beneficial owner of 20% or more
of the outstanding shares of Company Common Stock on such date), and (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any person
becomes an Acquiring Person) following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially owning 20% or
more of the then outstanding shares of Company Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by Company Common Stock
certificates and will be transferred with and only with such Company Common
Stock certificates, (ii) new Company Common Stock certificates issued after
December 26, 1995 (also including shares distributed from the treasury) will
contain a notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates representing outstanding Company
Common Stock will also constitute the transfer of the Rights associated with the
Company Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on the tenth anniversary of the Rights
Agreement unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company Common Stock as of
the close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation
in a merger with an Acquiring Person and shares of Company Common Stock shall
remain outstanding, (ii) a Person becomes the beneficial owner of 20% or more of
the then outstanding shares of Company Common Stock and remains the beneficial
owner of 20% or more of the outstanding shares of Company Common Stock as of the
Distribution Date, (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement, or (iv) during
such time as there is an Acquiring Person, an event occurs which results in such
Acquiring Person's ownership interest being increased by more than 1% (e.g., by
means of a reverse stock split or recapitalization), then, in each such case,
each holder of a Right will thereafter have the right to receive, upon exercise
and for the "adjusted exercise price" (as defined below), Units of Company
Common Stock (or preferred stock, cash, property or other securities of the
Company) having a value equal to two times the adjusted exercise price of the
Right. The adjusted exercise price is an amount equal to ten times the then
current Purchase Price (as it may have been adjusted from time to time in
accordance with the Rights Agreement). Notwithstanding any of the foregoing,
following the occurrence of any of the events set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void.
2
In the event that, at any time following the Stock Acquisition
Date and without the prior approval of the Board of Directors, (i) the Company
is acquired in a merger or other business combination transaction and the
Company is not the surviving corporation (other than a merger described in the
preceding paragraph), (ii) any Person consolidates or merges with the Company
and all or part of the Company Common Stock is converted or exchanged for
securities, cash or property of any other Person or (iii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as described above) shall
thereafter have the right to receive, upon exercise and for the adjusted
exercise price, common stock of the Acquiring Person having a value equal to two
times the adjusted exercise price of the Right.
The Purchase Price payable, and the number of Units of Company
Common Stock issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Company Common Stock,
(ii) if holders of the Company Common Stock are granted certain rights or
warrants to subscribe for Company Common Stock or convertible securities at less
than the current market price of the Company Common Stock, or (iii) upon the
distribution to the holders of the Company Common Stock of evidences or
indebtedness, cash or assets (excluding regular quarterly cash dividends) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue fractional shares of
Company Common Stock. In lieu thereof, an adjustment in cash may be made based
on the market price of the Company Common Stock prior to the date of exercise.
At any time until the Distribution Date, a majority of the
Board of Directors may redeem the Rights in whole, but not in part, at a price
of $.01 per Right (subject to adjustment in certain events) (the "Redemption
Price"), payable, at the election of such majority of the Board of Directors, in
cash or shares of Company Common Stock. Immediately upon the action of a
majority of the Board of Directors ordering the redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
3
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Units of Company Common Stock (or other
consideration).
Any of the provisions of the Rights Agreement may be amended
without the approval of the holders of Company Common Stock at any time prior to
the Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
4